This document analyzes the forces in Nigeria's fish farming industry that determine the level of competition using Porter's five forces model. It discusses factors like new entrants being able to benefit from low startup costs but facing challenges from unreliable power and expensive storage. It also examines suppliers having bargaining power over farmers due to high feed import dependence. Rising competition is causing larger farms to consider vertical integration to cut costs. Overall, the document evaluates the competitive environment in Nigeria's fish farming industry.
1. Identification and Analysis of the Forces in
Fish Farming Industry in Nigeria that
Determines the Degree of Rivalry and
Competitive Balance
Lecturer: Dr. S. E. Ifere
3. Fish farming became a prominent aspect of the
Nigerian agricultural sector in the 1980s. Fish
remains a major source of protein to
Nigerians as it contributes 55 % of the
country’s protein intake (Ultrazone, 3, 2013).
Fish can be acquacultured and they come in
different types, shapes and sizes, and are
demanded according to consumers’
preferences. Fish species commonly cultured
are tilapia, catfish, shrimp, pawn, and lobster.
4. Fish contain high percentage of protein and
some other nutrients like amino acid and
calcium. It is a source of Omega 3, which is
beneficial to the heart.
This presentation will narrow the scope of fish
farming to catfish culturization, which is
predominant in Nigeria.
Also, Porter’s five forces will be used to
analyze fish farming internal and external
micro environments to enable us understand
its operations in the Nigerian economy.
5. New entrants can benefit from the low cost of
starting up in a small scale as well as the high
rate of return on investment. They can also
take advantage of the available market by
practicing economies of scale.
Mrs. Alabi, a botanist and researcher with the
Nigerian Institute of Oceanographic and
Marine Research (NIOMR) stated that” Nigeria
spends about 50 billion on fish importation
annually to meet yearly fish demand of 1.5
million tones of fish can only boost of
6. producing 500, 000 tones of fish in the
country annually”
However, new entrants could be discouraged
by the epileptic power supply, lack of
experience in obtaining the right fingerlings
(the shooters), which grow at a faster rate;
costly storage and preservation techniques,
etc.
7. Non-availability of catfish could make buyers
switch to other protein rich substitutes like
croaker, tilapia, crab, meat, etc. The
limitation of the consumer’s income could
also make him/her switch to other protein
substitutes, owing to the fact that catfish is
costly when compared to other fishes.
8. The perishable nature of catfish makes it
pertinent for fish farmers to dispose of their
products at maturity. Since, there is perfect
competition, consumers tend to get the
products at reduced price. The bargaining
power of buyers is also heightened by poor
marketing strategy of fish farmers who have
no well planned marketing strategy in place
for selling their products.
9. Rising competition among firms within the
industry has made some large firms to
consider backward vertical integration. This
entails acquiring suppliers or going into feed
production so as to cut down cost of
production in order to have the highest
market share and still make huge profit due
to economies of scale.
10. Suppliers in this industry include supplier of
feeds, fingerlings and skilled labour, fishing
equipment, etc. The best feeds for catfish is
imported; though locally made feeds are also
used. Dr. Adesina Akinwunmi, the Minister of
Agriculture and Rural Development said that
“Nigeria spends at least N117.7 billion
annually on the importation of fish feeds”
with few investors (such as Grand Cereals,
Durante, Wonder feeds and Multifeeds)
showing interest in feeds production in
11. Nigeria (Nwiro, 3 July 2012). Feed producers
bank on this laxity to inflate the prices of the
feed.
As more farmers join the business, demand of
catfish fingerlings also sky rocket. Suppliers
bank on this rising trend to inflate their
prices. Some suppliers also take advantage of
ignorant fish farmers to sell the low quality
fingerlings to fish farmers, who, according to
Nkiru Uchendu, a fish farmer, loses as much
as 10% of them within few weeks of purchase.
12. Opportunities abound in fish farming. It is a
very lucrative business if the fish farmer
understands the antecedent of fish farming
as well as the Nigerian business environment
in order to strategically produce and market
the products, mindful of the threats that
prevails in the industry.
13. 1. Nwiro, E. (3 July 2012). Fish farming a
lucrative business. ThisDay Newspaper
2. Ultrazone (February 03, 2013). Why
Nigerian fish farmers fail in fishfarming.
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