Industry players say one of the key requirements of the master plan is for the South African poultry industry to grow the export of local products, but while there is enormous opportunity to do so there has been very little progress in this regard. Image, EPA.
The Poultry Master Plan signed by industry players in 2019 to level the playing field and chart a growth path seems to have have stalled, with little progress, as local producers and importers cluck at each other.
Research group ChickenFacts said that, overall, progress of the master plan had been uneven, largely ascribed to the pandemic, its accompanying lockdown, economic uncertainty, climate change which has manifested in floods and drought, and periodic outbreaks of avian influenza.
“But there has also been criticism that many structural problems in the industry are not addressed by the master plan, and that certain signatories have made no progress at all,” it said.
ChickenFacts examined the progress of the master plan, roughly 1 000 days since it was signed at President Cyril Ramaphosa’s 2019 investment conference, with an overall deadline of 2023.
It identified several missed targets, in particular export opportunities, which had been missed due to no progress in opening new export markets, which was made worse by outbreaks of avian flu.
South Africa still does not have satisfactory health standards for exporting to countries such as the EU.
They also pointed out that the African Farmers Association of South Africa (Afasa) had withdrawn from the Poultry Master Plan, claiming that there had been no progress on empowerment or ownership and that it was drawn up without consulting emerging farmers. They said it did not address ownership or empowerment in any meaningful way.
Afasa had compiled its own master plan and was currently engaging with the Department of Agriculture, Land Reform and Rural Development to amend certain aspects of the master plan before they agree to participate, ChickenFacts said.
It pointed out to the master plan as a cudgel for suppressing imports, which it said decreased from 20 percent of the market to 9 percent of the industry, due to punitive import tariffs.
The International Trade Advisory Commission (Itac) launched an investigation into dumping and the results were expected in June 2022.
Itac spokesperson Thalukanyo Nangammbi said: “The investigation regarding this matter is still on-going and when a final determination has been made, all interested parties will be advised through a notice that will be published in the Government Gazette.”
Meanwhile, the latest poultry industry squabble hinges on export opportunities and the trajectory of the price of chicken.
The Poultry Master Plan identified five main challenges in the poultry sector: the cost of feed, the scale of production, the segmentation of production (balancing the carcass), South Africa’s limited capacity for export and transformation in the industry.
To deal with these problems, the plan set out five broad objectives: to expand domestic maize and soya production; to increase production across all aspects of the value chain by 10 percent; to grow industrial-scale food processing; to increase exports to between 3-5 percent of local production, and to increase black ownership and participation across the entire value chain.
The Association of Meat Importers and Exporters (Amie) has drawn the ire of local producers after it announced a dedicated export task team to flesh out possibilities in the export market and would facilitate access to export markets as well as provide processing capacity for cooked poultry product, which is especially desirable in the European Union.
Amie CEO Paul Matthew said the team had a checklist of items, which the country and its poultry sector needed to urgently tackle. This, he said, included gaining access to countries with whom South Africa had preferential trade agreements, meeting the international health and safety standards and requirements of countries to which South Africa would export; and for local producers to reorientate their operations to extract value from certain poultry cuts in markets that would pay a premium for them.
“In 2019, all parties, including the local industry, importers and Government, signed and agreed to a Poultry Master Plan. One of the key requirements of the plan was for the South African poultry industry to grow the export of local products. While there is enormous opportunity to do so, there is very little progress in this regard,” he said, as Amie decided to go it alone.
However, South African Poultry Association (Sapa) aligned research group FairPlay scoffs at the Amie's initiative, pointing out that one of the biggest obstacles to South Africa becoming a significant poultry exporter is the lack of state veterinary laboratories and infrastructure, which is likely to cost at least R330 million, and probably a lot more.
"We ask, will Amie support the export drive and put its money where its mouth is? FairPlay hopes that is within the ambit of the master plan, and not outside it, because Amie has said it was reconsidering its master plan involvement,“ said FairPlay founder Francois Baird.
The South African poultry industry planned to be “export ready” by the end of this year, with a significant increase in poultry exports in 2023. Most of that was likely to be cooked meat, for which there are markets in Europe, the Middle East and elsewhere.
According to Donald MacKay, founder and CEO of XA International Trade Advisors, he said South Africa continued to miss huge export opportunities because it’s simply not ready to export.
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