Morocco’s Animal Feed Sector Under Scrutiny: Competition Council Reveals Deep Imbalances
Morocco’s Livestock Sector Grapples with Feed Monopoly
Morocco’s livestock industry is facing a critical challenge: a near-monopoly on animal feed production. A recent report by the Moroccan Competition Council reveals a deeply concerning market imbalance, where a handful of powerful companies control the supply of compound feed, leaving smaller livestock farmers struggling to survive.
The Council’s findings paint a stark picture. Despite 48 companies operating in the sector, a mere eight control a staggering 75% of the market share. Even more alarming, just two major groups dominate half of the market. This extreme concentration stifles competition and weakens the bargaining power of small and medium-sized farmers, leaving them vulnerable to market fluctuations and price hikes. This situation echoes similar concerns about market consolidation in other agricultural sectors globally, where a few large players can exert undue influence on prices and access to essential inputs (source needed – research on global agricultural monopolies).
This imbalance isn’t a recent development. The report traces the roots of this issue back to market restructuring in the 1940s, which saw many smaller feed producers squeezed out by larger corporations seeking economies of scale. While consolidation can lead to efficiencies, in this case, it has severely limited diversification and innovation within the Moroccan feed market. This mirrors trends seen in other industries, where a focus on short-term profits can hinder long-term resilience and adaptability (source needed – research on the impact of market consolidation on innovation).
The consequences of this market dominance are hitting farmers hard. Between 2018 and 2023, compound feed prices soared by approximately 45%, driven by a more than 50% increase in raw material costs. The report attributes these price fluctuations to global climate change and geopolitical tensions, which have added further pressure on manufacturers’ profit margins. However, the lack of competition likely exacerbates the impact of these external factors, as farmers have limited alternative suppliers to turn to. This is reminiscent of the global fertilizer crisis in 2022, where supply chain disruptions and market concentration led to dramatic price increases for farmers worldwide (source needed – link to information on the 2022 fertilizer crisis).
This precarious situation leaves livestock farmers with few options. Forced to pay inflated prices for essential feed, their profitability and livelihoods are threatened. While the dominant companies benefit from economies of scale, this advantage comes at the expense of fair competition and the ability of new players to enter the market. This ultimately harms the entire livestock sector, hindering its growth and potential.
The Competition Council warns that continuing down this path could lead to further economic strain on Morocco’s agricultural sector. They urge immediate action to promote competition, foster innovation, and encourage diversification in the compound feed market. Potential solutions could include supporting smaller feed producers, promoting the development of alternative feed sources, and enforcing stricter regulations on mergers and acquisitions within the sector.
This complex challenge requires a carefully considered intervention to balance the interests of large corporations with those of small-scale farmers, the backbone of Morocco’s livestock production. Creating a fair and competitive environment that protects smaller producers and encourages innovation is crucial for the sustainable growth and future of the industry. This aligns with broader global efforts to promote sustainable agriculture and ensure food security by supporting smallholder farmers and diversifying agricultural production (source needed – link to information on sustainable agriculture and food security initiatives).
