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The poultry industry is still reeling from its 2023 annus horribilis where load shedding, water challenges, high raw material cost and the avian influenza outbreak materially impacted the industry.
South Africa also had outbreaks of bird flu in 2017 and 2021.
The South African Poultry Association (Sapa) says the industry cannot afford to lose R9.5 billion again because of the disease. It is simply not sustainable.
“We cannot expect the industry to go through another disastrous year like 2023,” says Sapa CEO Izaak Breitenbach.
“Avian influenza is a recurring disease. We have not been able to eradicate the disease globally.”
Breitenbach was speaking during an agriculture roundtable discussion. He says there must be alignment between the government and the industry on vaccination or compensation.
“There must be an agreement that if the government is not compensating farmers for the loss of their flocks, then there must be vaccinations. If vaccination is not allowed, then compensation should be paid.”
Some light at the end of the tunnel
The first phase of the poultry master plan has made inroads to address some challenges facing the industry.
There has been increased investment, and production capacity is up 10%.
Around 20 contract farmers have been established and there has been progress with the administrative process to export to the European Union (EU) and Saudi Arabia. The industry also received relief through the imposition of anti-dumping duties against nine countries.
However, there are still significant challenges restraining the industry – which currently generates R65 billion in turnover per annum and employs more than 165,000 people.
The two biggest challenges are dealing with avian influenza and expanding export markets.
Disease control
“The disease is acting more and more like an endemic disease that we are failing to control properly, not only in SA but also in Europe and the US. We need to vaccinate,” says Breitenbach.
Sapa has been in discussions with the Department of Agriculture for two years. The department was invited to participate in the roundtable discussion organised by the FairPlay trade movement but failed to pitch.
SA has developed a bio-security protocol that will support vaccination. Vaccination is not a silver bullet, but it is one of the means to enhance biosecurity, says Breitenbach.
SA also has a monitoring protocol to prevent foreign viruses from entering local flocks. Unfortunately, these protocols are onerous, and it is difficult to comply with the high standards required.
Sapa is in favour of high standards, yet it is important to propose implementable methods. A major concern is the shortage of around 400 government veterinarians. This will make the administration of a vaccination rollout difficult.
No vaccinations and no compensation
Farmers find themselves stuck between a rock and a hard place. They are not able to vaccinate, even though vaccines are available, and they are not compensated for the loss of their flocks.
Avian influenza decimated small farmers because they simply did not have money to replace the flocks they lost.
The department’s view on compensation is that a bird that is diseased or has been in contact with a diseased bird has no value.
A flourishing poultry business, Moerasrivier Boerdery, took the department’s decision not to compensate it – despite an order from the former minister to do so – on review. The court found in its favour.
The business suffered losses totalling almost R32 million when it had to destroy more than five million eggs, 300,000 chickens, feed and manure in May and June 2021.
The high court ordered the department to consider the value of the “destroyed animals or things” on the basis that they were in a “healthy” state.
The department is most probably going to take the matter on appeal, says Breitenbach. The industry remains hamstrung by the lack of finality on compensation. SA is still regarded as highly pathogenic avian influenza positive, and this prevents exports, says Breitenbach.
Ability to export
Although a lot has happened in the background, SA has not been able to enter any of the markets it has targeted. This includes the EU, the UK, and Saudi Arabia.
“We need to increase the value of the carcass by selling cooked breast meat to new markets to be able to subsidise other cuts on the carcass,” emphasis Breitenbach.
The country is awaiting an audit by the UK authorities to be able to start exporting. Sapa has approached the department to facilitate a meeting with the authorities in Saudi Arabia to unblock administrative barriers.
Notwithstanding these persisting challenges, the country remains globally competitive. “We produce chicken cheaper than the EU and marginally more expensive than Brazil and the US.”
The three main pillars for future growth remain a remedy for avian influenza, getting chicken products zero-rated for value-added tax and exports to identified markets, says Breitenbach.
This story first appeared in Moneyweb.co.za
