Value chain analysis of the aquaculture feed sector in Egypt

Abstract

This study was carried out to evaluate the value chain performance of the aquaculture feed sector in Egypt, in terms of value addition, employment and profitability. The strengths and weaknesses of each link of the value chain were assessed and appropriate upgrading, management and development strategies were suggested. Quantitative data were collected for each link in the value-chain through structured questionnaires that were drafted and distributed to the key players in the sector; 25 fish feed mills and 34 fish farms covering different geographical and production regions. The results indicated that the Egyptian aquafeed value-chain is relatively simple; including only four main stakeholder groups. These are feed input suppliers, aquafeed producers, aquafeed marketers and traders and fish farmers. Between 50 and 99% of feed ingredients used in aquafeed production in Egypt are imported. About 90% of Egyptian aquafeeds are produced by the private sector in the form of conventionally pressed, pelleted feeds (80-85%) and extruded feeds (15-20%). About 85% of those producers sell their feeds directly to farmers with payment either in cash or on credit, while the remaining 15% sell through intermediaries such as traders. State-owned mills produced only 10% of total commercial fish feed production in 2012, exclusively in the form of pressed, pelleted feeds. Employment generation in private sector feed mills was 29.2 full-time equivalent (FTE) jobs per mill, with an average of 3.9 jobs per 1000 tonnes of feed produced. Employment generation in state-owned mills was much higher; with an average of 90.3 FTE per mill. Males represented 90% of the full-time employment in the state-owned mills and 96.6% in the private sector. Feed costs represent 75-90% of the total operating costs of the fish farms. The major factors impacting on the performance of the value-chain relate to inputs, to feed production, to fish farmers and to marketing and financial services. The study recommends actions to mitigate these issues including the local production of more feed raw materials, strengthening quality control and inspection, providing training for feed mills, better organization of fish farmers and improving the legal and policy environment.