A recent opinion from the Competition Council (CC), dated September 26 and published on December 6, on the state of competition in the compound foods market in Morocco, allowed this institution to highlight the situation in an important sector, that of livestock feed, closely linked to livestock breeding.
According to this opinion, which comes at the right time, the CC was able to note excessive concentration, exercised by 8 companies out of a total of 48. These 8 companies hold 75% of the market. And the hard core is occupied by two large groups which hold almost 50% of the market. This is a de facto monopoly situation which threatens the rules of fair competition, like other sectors blacklisted by the CC, such as insurance or the distribution of hydrocarbons. This situation reduces the margin of small breeders in their options and forces them to accept prices set unilaterally and arbitrarily. According to the CC, this situation is not entirely new. It dates from the 1940s, during which a process of concentration began for the benefit of large companies benefiting from economies of scale, without passing on the gains from this advantage on prices.
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The quasi-monopoly currently held by two large groups (50%) weakens the possibility of choice, diversification and innovation. And it is the breeder-consumers who assume the negative consequences of this situation, in terms of an increase in the prices of compound feed which recorded an increase of more than 45% between 2018 and 2023, due in particular to the sharp increase in prices. raw materials (+ 50%) used in the manufacture of said compound foods and often imported. These are mainly cereals and oilseed plants. Price fluctuations have been exacerbated by climate change and geopolitical tensions. In fact, climatic and geopolitical factors are above all aggravating factors which add to the structural causes inherent to concentration strategies and agreements resulting from quasi-monopoly situations exercised in fact. Added to this is the weak organic link between the local agricultural sector, as a supplier of raw materials, and the industrial sector for manufacturing livestock feed.
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Faced with this situation, the CC issued recommendations including: improving the supply of oilcake and cereals; encouraging the agricultural aggregation model in the livestock sector; the strengthening and control of ONSSA and the development of self-control; the diversification of compound feed production towards new segments, for better use of production capacities; strengthening the use of compound feed for ruminants; encouraging the export of compound feed and structuring the poultry sector to promote the export of poultry meat and processed products; the establishment of risk hedging mechanisms; encouraging research and development to empower the supply of raw materials.
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