By Francois Baird
When South Africans buy chicken this month to feed their families or celebrate with friends, their purchases should remind them of the value and resilience of the poultry industry.
Chicken will be available and affordable this festive season, thanks to the extraordinary efforts of poultry producers to overcome the worst year in their history.
High input costs, the additional billions that they are spending to counter electricity shortages, infrastructure failures and the ravages of bird flu, which caused the deaths of 9 million chickens, have wiped out profits and turned chicken farming into a loss-making business.
Despite massive setbacks, poultry producers have ensured that the shelves will be stocked this Christmas, and they believe a recovery will be possible in 2024.
For more than 100 years, the poultry industry has supplied South African consumers with their most plentiful and affordable meat protein, and they intend to continue doing so.
It is notable that the efforts the industry made in 2023 to look after South African consumers have been taken with little or no government support, and in the face of government actions and failings that have made chicken farmers’ lives more difficult and more expensive.
At their own expense, chicken producers rearranged production schedules to help make more chicken available. At their own expense, they imported millions and millions of hatching eggs to avert a shortage of chicken over the festive season.
At their own expense, they are disinfecting and restocking poultry houses after bird flu outbreaks, because the government – unlike governments elsewhere – refuses to compensate them for the cullings that it orders to help prevent the spread of bird flu.
This is in addition to the billions that have had to be spent on diesel generators, and the fuel to run them, because of persistent and damaging power cuts. Not to mention the effect of the collapse of transport and municipal infrastructure. Many small-scale poultry farmers have gone out of business, but a promised government rescue package has yet to materialise.
Amid the worst disaster the industry has faced, the government threatened to impose a damaging and unnecessary import tariff rebate to encourage additional chicken imports that would have added to producers’ woes.
Fortunately, Trade and Industry Minister Ebrahim Patel has made no further announcement on his rebate idea, and it may be that he has realised it is undesirable and unworkable. The chicken shortage it is meant to counter is not happening.
In addition, port inefficiencies have resulted in congestion that will take weeks and possibly months to clear, so encouraging a new flood of chicken imports would be an exercise in futility.
The rebates, even if temporary, would have undone the one action Minister Patel took this year to support the poultry industry. In August, after a year’s delay, he approved anti-dumping duties on chicken imports from Brazil and four EU countries.
Port congestion didn’t stop chicken importers championing the rebate proposal which would have increased their profits – if the harbours were working.
The importers are hoping for tariff rebates. They wanted them to apply not just for this Christmas, but for the next year, nullifying import tariff increases that were imposed in 2020.
It is notable that chicken importers have been vocal about notional future imports but have not said a word in public about the harbour congestion that must be delaying their import consignments. Blocked harbours are an existential threat to imports. Imports, at the moment, are a hugely vulnerable sector of the economy.
Where are the importers’ public pleas to the government to act urgently to clear the imports backlog? Where is their offer of assistance to provide financial and personnel resources to help resolve an issue that threatens their viability? One wonders whether they stockpiled a mountain of chicken during the year that anti-dumping duties were delayed.
No, importers are fixated on rebates and threaten that, without them, chicken prices will rocket this month and into the new year. We will see. There is always a seasonal price increase because demand peaks over the festive season, and a price drop in January when demand drops off. The best way to make chicken more affordable is by making South African chicken VAT Free.
Despite an emphasis on rebates and prices, not once did importers undertake to pass on to consumers the price benefit of an imports rebate. Instead, they stand to make even greater profits because imported chicken sells at market-tracking prices.
The fact that there is chicken in the shops this December shows that, while imports can complement local supply, it is South African producers that continue to feed the nation – some 66% of all meat consumed in the country is chicken.
A thriving domestic poultry industry is our best defence against failing ports and transport systems and is crucial to fighting hunger by supplying essential meat protein to low-income households.
That is what is behind the chicken that shoppers will put in their baskets this Christmas.
Francois Baird is founder of the FairPlay movement.
BUSINESS REPORT