Poultry farmers in Mzansi are increasingly feeling like a chicken with a pip. Between a lack of implementation on anti-dumping duties for imports, VAT on locally produced products, and rising production costs, they’re having it tough.
The only way out, believe some key role players, is by addressing these industry challenges in the poultry sector master plan.
While there has been some notable successes in the implementation therefore, FairPlay founder François Baird reckons government has failed to implement important aspects that the plan seeks to address. As a result, farmers are not getting the right support they need.
“Part of this plan is to contain exports by ending dumping. Dumping is wrong. It is not illegal, but it’s wrong, and it is against the rules of the World Trade Organisation. Therefore, we do not have to argue with government when it comes to anti-dumping,” he says.
FairPlay also calls for the scrapping of VAT on South Africa-produced chicken products –a simple and effective way of providing immediate relief to farmers, says Baird.
“There is no point in having a plan if the participants of the plan do not implement it. In this regard, both the importers and exporters as well as government have failed miserably and this is what we need to focus on – not to have a new plan, but execute the plan that everyone has agreed on.”
Government participation
According to Baird, a lack of communication over the master plan in the past year from trade, industry and competition minister Ebrahim Patel, has caused great concern for industry players.
Patel has been the driving the master plan for the poultry sector – and other industries – and had previously had regular interactions with stakeholders, he adds.
“Government seems to have decided that consultation, communication, and negotiation are not necessary. Our impression as FairPlay is that government is willing to do promises to small-scale farmers if they do not have to deliver anything.
“What has to end, is this solo riding by government. We are all in the same boat, but as long as government agrees on a plan and start punching holes in the boat, we are all going to sink. The plan has to be executed.”
Despite several attempts, Food For Mzansi has not received response from National Treasury to questions sent on FairPlay’s request to scrap the 15% tax on locally produced chickens.
SAPA begs to differ
Meanwhile, Izaak Breitenbach of the South African Poultry Association says the master plan has delivered significant progress in the industry.
“This master plan has delivered. 2 600 new jobs were created in the two years that we have been busy with the master plan.
“We have also seen a 10% increase in the total amount of chickens being produced in the industry. We managed in the last two years to establish 18 new contract farmers at the value of R 35 million, these are big producers that have been established among black farmers through the master plan,” Breitenbach says.
He adds that by the end of 2023, the industry would have invested some R2.4 billion in upgrading and expanding poultry production. This will mostly be to accommodate new supplies from black contract growers. This is way in excess of the industry’s R1.5 billion commitment in the master plan.
However, Breitenbach believes anti-dumping duties against Brazil needed to be implemented as it was hampering industry growth. Exports also needs to be ramped up.
Failure to develop a significant and growing chicken export operation has been identified as one of the big unfulfilled objectives of the poultry master plan.
The export drive is an important focus of the master plan, which envisages chicken exports doubling in the three years to 2023, redoubling by 2028 and continuing to grow after that. The result would be a substantial portion of expanded local chicken production aimed at the export market.
Instead of growing, chicken exports have dropped every year since the master plan was signed in 2019, according to FairPlay.
Master plan roadshows
Meanwhile, a young poultry farmer from Warrenton in the Northern Cape, Nqobile Khumalo, says educational drives on the poultry master plan needed to be done. New entrants needed to know how to access opportunities created by the plan.
“It would be of great value if organisations such as the Poultry Association could do regional workshops or roadshows to inform and educate new entrants on the masterplan. We want to get involved, but we just do not know which doors to knock on.”
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