Poultry industry ROASTED | Fin24
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Poultry industry ROASTED

Jan 15 2017 06:00
Paddy Harper

Johannesburg - Government departments and South Africa’s poultry producers will meet in the next few weeks in a last-ditch bid to save the country’s chicken industry.

The sector is on the verge of collapse as it battles with a flood of cheap chicken quarters that are allegedly being dumped by EU countries and the US.

The move comes as several of the country’s biggest chicken producers, including KwaZulu-Natal’s iconic Rainbow Chickens, push ahead with mass retrenchments and farm sell-offs, which will see Rainbow alone cutting more than 1 350 jobs at the end of this month.

Kevin Lovell, chairperson of the SA Poultry Association, told City Press on Friday that government, led by the department of trade and industry (the dti), had committed to a summit aimed at keeping the industry alive.

“Government – not just the dti – has understood that urgent and comprehensive action is required.

We are meeting in the near future to look at finding a solution for the current crisis and to stabilise the industry in its short- and medium-term future,” Lovell said.

“Government understands that we are at a South African textile industry moment, where shrinkage caused by cheap imports became permanent, that we are about to fail rather than contemplating failure,” he said.Lovell said that last year around R7 billion worth of imported chicken-leg quarters – which are dumped by European companies because consumers there only eat breasts and wings – came through Durban harbour at a cost of R10/kg – half the industry standard price.

“This is such a waste. This R7 billion could have stayed in South Africa and supported the local industry,” he said.

Lovell said poultry producers would ask government to introduce regulations that would in effect halve the amount of chicken entering South Africa as this was the minimum requirement for the local industry to survive.

“The outcome of the meeting will have to cut imports dramatically, by 50% or more. We are flexible about how we achieve this, and are hopeful that government will be equally flexible,” Lovell said.

“There is no such thing as cheap food if you don’t have a job. If the industry is stabilised and the imports are stopped, we can not only save existing jobs, but also create 50 000 direct and indirect jobs, which is 5% of government’s target, with the right support and intervention,” said Lovell.

“None of this can happen if so many participants in the industry are in give-up mode. The jobs that are being lost are gone forever. The farms that are being sold will never be used for farming again,” Lovell said.

The potential collapse of the poultry industry also holds serious implications for soya bean farmers – 90% of whose produce is consumed by chicken producers – and for maize growers, as poultry is South Africa’s second-largest maize consumer after the human market.

Spokesperson for the dti Sidwell Medupe said that a committee comprising the dti, the agriculture ministry and other players would meet to look at how to address the problems the industry was facing.

Medupe said this committee would “consider all the challenges experienced by the domestic poultry industry and develop a comprehensive strategy to address these challenges in a holistic and sustainable manner”.

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