Proposed 5% petroleum tax threatens food security, may cripple poultry business — Farmers

Poultry farmers under the aegis of the Poultry Association of Nigeria (PAN) has raised concerns over the Federal Government’s proposed 5 per cent tax on petroleum products, warning that the policy is capable of crippling the poultry industry, worsen food inflation, and deepen the nation’s food insecurity.

Sunday Ezeobiora, President of the Poultry Association of Nigeria (PAN), while speaking on behalf of other poultry farmers, said that the sector depends heavily on petrol and diesel for key operations including transportation of feeds, eggs, and birds, powering hatcheries, cold storage, climate control in poultry houses, irrigation, and mechanised farming.

He explained that introducing an additional 5 per cent tax on these essential fuels would significantly inflate production costs, discourage investment, and potentially push many small and medium-scale farmers—who make up the majority of producers—out of business.

He said: “An additional 5 per cent tax on these essential fuels would not only directly inflate production costs but could make the difference between profit and loss for many small and medium-scale farmers.

“It is a direct financial burden that could discourage investment in an already fragile industry and cripple the industry’s ability to produce at a competitive price. For smallholder farmers, who make up the bulk of our producers, this could be the tipping point toward collapse.

“If this tax is implemented, the ripple effect will be felt across the entire food value chain, further compounding the problem of food inflation.

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“Higher fuel costs will lead to increased prices for feed, veterinary services, packaging, and distribution. Farming is a business, and when production costs rise, those cost of production are ultimately passed on to the consumers.

“Consumers will ultimately bear the brunt through elevated food prices—particularly poultry products, which are a primary source of affordable protein for millions of Nigerians.”

He emphasised that with existing inflationary pressures and food insecurity challenges, the policy risks exacerbating hunger and malnutrition.

While acknowledging government’s revenue needs, the association argued that taxing petroleum products would have long-term negative consequences for national food security.

Instead, he called for the adoption of alternative measures such as targeted subsidies for inputs like maize, soybeans, and veterinary products to lower production costs.

Ezeobiora also called for greater investment in infrastructure, particularly stable electricity and rural roads, which would reduce farmers’ heavy reliance on generators and cut transportation expenses.

In addition, he suggested exploring revenue opportunities in non-agricultural sectors such as mining, technology, and services.

“We urge the Federal Government to reconsider this proposal and engage in a meaningful dialogue with agricultural stakeholders. Our goal is to ensure Nigeria’s self-sufficiency in food production, and we stand ready to work with the government to achieve this,” he said.

Ezeobiora added that the Poultry Association of Nigeria remains committed to constructive engagement with policymakers to ensure that farmers’ voices are heard and respected while safeguarding livelihoods, promoting food security, and supporting national development.