The poultry sector has been in the news a lot lately. First there was the famous video of ” seller of unfit chickens“, then the rise in prices which lifted the veil on the anarchy which rages in the sector and the intermediaries who wreak havoc there. In this direction, MoroccoLatestNews UK spoke exclusively with Chaouki Jirari, Managing Director of the FInterprofessional Federation of the Poultry Sector (FISA), recognized by the Ministry of Agriculture as an agricultural inter-branch organization for the poultry sector in Morocco, who was kind enough to confide in all of these points and more.
MoroccoLatestNews Fr: A rise in poultry prices has been observed recently. What are the reasons behind this outbreak?
Chaouki Jirari: The price rise started almost a year ago. This is due to several factors. First, there were the aftermath of covid-19. During the pandemic, there were health restrictions, closure of hotels, souks, marketing channels for agricultural products in general, which resulted in an unprecedented price collapse.
During this period, the chicken was sold at 6 dh/Kg, the turkey was sold at 10 or 12 dh/Kg, the egg reached 40 cents per unit. So this has caused enormous financial losses for breeders, and there are many who have either gone bankrupt (total production stoppage) or reduced their production. And it’s been dragging on since 2020.
The number of farms that are operational today has dropped compared to the pre-Covid period. When we have farms that go out of business, this leads to less production and less supply. And if the supply drops, it creates an imbalance between supply and demand and this results in an increase in prices.
The prices of agricultural products in general are free and obey the law of supply and demand. And so, when there is a drop in supply relative to demand, well, prices go up. This is also valid in the other direction.
Now, there was the Covid, then the increase in the prices of raw materials, mainly soybeans and corn which represent 80% of the feed formula given to poultry. These two foods also represent 80 to 85% of the cost price. When there is an increase in the prices of these foods, this automatically translates into an increase in the cost price.
If before the covid we were on a cost price which varies between 11 and 11.50 Dh per unit, today, and taking into account the inflation which affected food, oil, the dollar exchange rate also (we were at 9 Dh we arrived at 11 Dh), we are on a cost price which is between 16 and 16.50 Dh.
This means that for about 8 months, farm prices have increased to 17 dh, 18 dh, see 20 dh in some regions, because prices vary by region. In Casablanca, for example, prices are generally cheaper, but as soon as you move away from the metropolis, prices increase.
Then there is the cost of transportation. Because most livestock feed is located around Casablanca. So when you are located in Oujda or Nador and you are delivered from Casablanca, you have a high transport cost to pay.
Today, the selling price of chicken on the farm varies between Casablanca and Nador within the limit of 1 Dh to 50 cents more. But in general, professionals follow Casablanca prices.
As for the farm gate price, which fell about a month and a half ago. We went from 16.50 Dh at the farm in Casablanca to almost 11-12 dh. This is why prices had dropped at the consumer’s to 13 or 14 dhs per kilo.
At 11 dh-12 dh leaving the farm, the breeders suffered a very significant loss. Since the cost price was 10.50 dh. They sold on average at 12 dh, a loss of 4 to 4.50 dh per kilo. That’s huge for a breeder.
These losses, which we recorded a month and a half ago, followed a drop in production, which explains this price increase today. It’s been almost a week since prices went up.
Now, there may actually be a shift in demand for red meat, the price of which has increased, towards poultry. There are many low-income consumers who have fallen back on poultry, which has led to an increase in demand, in the face of a reduced supply, which explains this increase in prices.
The poultry market has a large number of intermediaries who contribute, among other things, to the rise in prices. There is straightforward talk of “anarchy” in the sector. What are you doing at FISA to end these practices and regulate the industry?
Intermediaries exist everywhere. But we follow the wholesale market price. Between the price at the farm and the price at the wholesale market, there is generally 50 cents to 1 dh more. It’s not a lot, when you have to count the costs of the workers, the truck, the tax you pay at the wholesale market, the losses along the way, and so on.
So when we talk about 50 cents or 1 Dh more, it’s not much. Now there are a lot of retailers buying directly from the farm. They don’t even go through the wholesale market or the wholesalers. Except that, contrary to what they say, there are not many intermediaries. Now, when we compare the price at the farm gate and the retail price paid by the consumer, we have to raise the different contexts. If you go to a popular area, where there are a lot of poultry peelers, placed next to each other, there is even competition between these peelers, you will indeed find a price difference between the firm and the retail of 3 Dh approximately.
If you go to an upscale neighborhood where there is no peeler, and where there is only one chicken vendor, with no competition in the neighborhood, there he can charge whatever price he wants, given prices are not regulated.
So a peeler can display up to 30 dh the chicken. If he finds a buyer, he can sell at that price. The only constraint he has is that he is obliged to display the price. Now, it’s up to him to set the price he wants, it’s the law of the market.
At FISA level, we are actually trying to clean up the poultry marketing and distribution services. We are working on the installation of industrial poultry slaughterhouses, like what is done all over the world. Agricultural slaughterhouses that are approved and controlled by ONSSA.
Now there are the peelers of which there are many. We are working on upgrading these structures so that they improve the hygiene and sanitation conditions of their premises. Moreover, in 2019, we worked with the Ministry of Agriculture, and the Ministry of the Interior in this direction.
There was a circular to define specifications for upgrading the peelers. Today, we are working on the implementation of these specifications. And that’s what we actually did, initially, with the province of Nouaceur, which was open to upgrading the peelers. We have therefore provided training for the owners of these structures.
However, between peelers and industrial poultry slaughterhouses, work is underway on a project to install modern high-capacity slaughterhouses (slaughter of up to 500 chickens/hour and 250 turkeys/hour) and which are approved by ONSSA. And there is a whole program that has started since the last quarter of 2021.
The FISA therefore supports a certain number of project promoters to effectively install modern slaughterhouses. Then there are the large slaughterhouses which can slaughter up to 5,000 chickens/hour. The others slaughter between 1,500 and 2,500 chickens.
Here are the three projects we are currently working on, namely encouraging the construction of large-capacity slaughterhouses, encouraging low-capacity slaughterhouses, and upgrading peelers.
Recently, a video circulated showing individuals selling dead chickens for consumption in restaurants and snack bars. What are you doing within FISA to control the quality of products intended for consumption and eradicate this dangerous phenomenon?
As soon as the video circulated, we asked for the opening of an investigation around the gentleman who made the video. The latter was contacted by the competent security services. Subsequently, he confided via another video that he acted in order to raise consumer awareness of possible practices of this kind, and also to “joke”, and that what was broadcast is not TRUE.
But the first video did a lot of harm to consumers and also to professionals, even much more for the latter. A video like this translates into a drop in demand. And it is the breeder who pays the price.
Then there are people who, every time the price goes up, release a video like this, to break the operators, annoy the consumer, which results in lower prices.
So we asked that the gentleman in the video be prosecuted. The video did not only harm the poultry sector, but also the control and inspection bodies that control consumer products in general (red meat, fish, chicken, etc.), namely ONSSA, the Ministry of Health (a specialized service) and the Ministry of the Interior.
To say that snack bars and restaurants are stocked with unclean chickens means that these entities are sleeping, which is not true.
And then collective catering in general is obliged, by regulatory texts, to obtain supplies exclusively from slaughterhouses approved and controlled by these organizations.
Some breeders complain that they have not benefited from the advantages granted by credit organizations, within the framework of a partnership with the State, and accuse the FISA of favoring its members to the detriment of the others. How do you respond to that?
The Dawajine loan is granted within the framework of a program contract signed between the FISA and the government. And in this contract program, it is planned indeed, a partnership with the Agricultural Credit of Morocco, to allocate credits at rates subsidized by the State.
It is therefore a convention that is specific to the FISA. Now, go directly to Crédit Agricole and ask for a loan, we are not concerned. At the level of the process of granting credit subsidized by the State, in the agreement, the person is asked to go through the FISA, which gives him a letter of approval after studying his file.
The study of the file essentially concerns the technical side of the project as well as the budget plan planned for the project. On the basis of this information, we deliver an approval letter, which is an agreement in principle, which the person concerned must give to the agricultural credit.
But there is no guarantee that the person will get 100% credit. It must also meet the bank’s requirements, particularly in terms of guarantees and solvency. So Crédit Agricole also gives itself the means and guarantees to ensure that the person is solvent.
Sometimes, a person comes to us, and presents a project to us by multiplying the cost of the project by 10. So we, who know the cost of setting up different projects, analyze the information given to us, to see if the person has submitted a financially correct project, or they just want to take large loans to make something else.