Producer response to retail egg price in Ogun State Nigeria: implications for increased egg production

  • C.A. Afolami Department of Agricultural Economics and Farm Management, University of Agriculture, Abeokuta,Nigeria
  • O. Oladimeji Department of Agricultural Economics and Farm Management, University of Agriculture, Abeokuta,Nigeria

Abstract

Much has been said about farmers' responsiveness to price incentive with the inference that increasing producer price would be an effective incentive for increasing production. Against the backdrop that the nation's animal protein consumption is 5 grams / caput / day which is a far cry from the recommended level of 35 grams / caput / day of Food and Agriculture Organisation (FAO), this paper examined producer response to retail egg price which has been rising geometrically. This is to check whether there is price incentive for increased egg production to meet the nation's animal protein need through increased egg production. The study location is AdoOdo/ Ota LGA in Ogun State, an area with many commercial poultry farms. The exact study locations were Obasanjo, Oginni, Okegbenro, Kanmi and Evergreen farms, where the egg prices of five producers, five wholesalers and five retailers were collected weekly for a period of eight months and the average price for each category of marketers was used in the analysis. The analysis involved the regression of average producer egg price on location dummy variables and the average retail egg price. From the model, the producer average egg price elasticity with respect to the average retail egg price was estimated. Results showed that only 33 per cent of the increase in retail egg price is passed to producers. Producers are thus likely to run into financial difficulties in expanding their output particularly in the post SAP period when the costs of inputs for poultry production have increased tremendously. An attractive and adequate credit scheme with good moratorium period and concessionary interest rate than hither to available is suggested. In addition an overhaul of the egg marketing strategy to favour the producers is necessary, if the nation's animal protein problem is to be alleviated. Keywords: Producer egg price, retail egg price, elasticity, Ogun State.
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eISSN: 0331-2062