Poultry sector in a flap

2012-07-07 08:28

Industry warns about thousands of job losses and a flood of imports

Representatives from the poultry industry say the sector is on the brink of a crisis.

They are looking to the government to take steps that will make the difference between a viable and sustainable industry, and a situation where tens of thousands are jobless and the country is forced to rely on imports of one the most critical food sources.

Food security is a section 27 constitutional right in South Africa, yet representatives of the threatened poultry industry struggled for two years to get an audience with Tina Joemat-Pettersson, the minister of agriculture, forestry and fisheries.

Says Kevin Lovell, chief executive of the SA Poultry Association: “The poultry industry accounts for a quarter of the agricultural sector’s contribution to gross domestic product (GDP) and is the largest food category
by far.

“We have tried for 18 months to meet with the minister. We have sent several letters and requests,” said Lovell.

This week Lovell met Deputy President Kgalema Motlanthe to discuss the fate of the industry, which is being threatened by cheap Brazilian and European imports.

But a statement from the ministry of agriculture, forestry and fisheries said: “It is impossible for the minister to meet every single sector individually.”

Ministerial spokesperson Palesa Mokomele said: “The minister holds a service delivery forum where she meets and interacts with stakeholders from different sectors related to agriculture, forestry and fisheries.”

Mokomele said: “The last one was in June. This is an opportunity for the minister to listen to different sector issues as it is impossible for her to meet each one individually. Representatives of the poultry industry attended this forum and had an opportunity to speak to the minister.”

The poultry industry’s representatives argue that the matter is urgent. They point out that jobs are at stake.

The poultry industry employs more than 50 500 people directly and another 55 000 indirectly.

They assert that the industry uses about a third of the local maize crop and most of the soya beans, adding another 10 500 jobs.

“If dumping by foreign countries continues, we could go the route of Ghana, which completely lost its poultry industry. We South Africans must decide quickly whether we want an industry or not,” said Lovell.

The industry makes the point that poultry is one of South Africa’s most important foods.

It is the cheapest type of meat and accounts for more than 50% of the country’s source of protein.

They say many South Africans make a living growing and selling chickens on a small scale.

This supplements domestic incomes for people on state social grants and improves the nutritional content of the diets of children in poor homes.

Lovell says that in production terms, this country is technically on par with countries like Brazil, but because of higher input costs such as feed, as well as economies of scale, it is difficult to compete on price with the cheap chicken coming into the country.

Poultry imports have flooded the local market. “Last year we recorded a 40% year-on-year increase in imported chicken, and it continues to rise, where previously we imported between 10 000 and 25 000 units.

According to a research paper by the Development Bank of Southern Africa (DBSA), there is a dichotomy between the large food retailers and small informal traders – and nothing much between the two extremes.

The paper advocates policy intervention by government to bridge the gap, and secure both large industries and the viability of domestic households.

The DBSA paper says government and industry must work together to create “an enabling institutional policy framework”.

According to Stats SA, poor households spend most of their money buying food and are hugely affected by any increases in food prices.

Rural households spend more on food, but less per person than their urban counterparts.

About 80% of households could not buy a basic nutritional basket of food costing an average of R262 per person per month.

Of this 80%, one in every four additional households would achieve an acceptable level of nutrition with R200 more expenditure on nutritious food per month, the Human Sciences Research Council found.

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