Poultry sector could hatch 30 000 jobs

But SA farmers struggle to compete with subsidised imports

MORE than 30 000 much-needed jobs could be created if the government blocked chicken imports.

That is according to the SA Poultry Association (Sapa), which believes the scrapping of imports would end the crisis in the local chicken industry.

The impact of imports on the industry was best illustrated in 2017, when RCL, the company that owns Rainbow Chicken, sold 15 of its 25 farms in Hammarsdale, Kwazulunatal, and retrenched 1 350 workers.

Other heavyweights in the industry, Country Bird and Mike’s Chickens, dismissed 1 500 and 1 000 workers respectively.

Izaak Breitenbach, general manager of Sapa’s broiler organisation, said statistics showed chicken imports reached a record high last year.

“Chicken imports totalled 538 434 tons, up from the previous high of 528 108 tons imported in 2016,” he said.

“Every ton of imports represents South African jobs lost or not created. We have worked out that we could create 30 000 jobs by replacing imports, which were worth R6 billion last year.”

Breitenbach said Sapa could not understand why the government had allowed the wholesale “dumping” of imported chicken in the country, when South Africa ranked among the top producers of chicken in terms of cost and quality.

He referred to the Bureau for Food and Agricultural Policy report, which was released last week. The report “reflected the competitiveness of the South African broiler industry”.

“The report showed that we were the fifth most competitive producer of poultry in the world. The chicken industry in countries that ranked higher than us, like the US and Brazil, were subsidised by their respective governments.

“They receive subsidies for maize and soya feed in those countries; after all, feed represents 70% of the input cost to raise chicken. South Africa is a semi-desert country. Therefore, it is more expensive to produce maize and soya, which affects production costs.”

Breitenbach said equipment used in the chicken industry in Brazil was also subsidised.

That Brazil was the largest exporter of chicken to South Africa was another concern for Breitenbach, because one of Brazil’s biggest food producers, BFR SA, recently recalled almost 500 tons of chicken due to possible salmonella contamination.

The EU has banned imports from 20 Brazilian chicken producers because of salmonella fears, and Saudi Arabia blocked five of that country’s producers earlier this year.

Breitenbach said every day 55 containers of poultry arrived in South Africa, and that the poultry was sold at “dirt cheap prices”.

He said 60.5% of imports were from Brazil, and last year 348 155 tons of chicken were received from that country.

“We are unable to physically test all of the containers of chicken. My concern is that exporters are capitalisng on this and offering us meat that is possibly contaminated, at very low prices.

“Therefore, we’ve asked the Department of Agriculture to ban all Brazilian imports.”

Marthinus Stander, chairperson of Country Bird, one of the top three chicken producers in the country, said the proliferation of imports was a “crying shame and a missed opportunity”.

“We’re not scared if whole chicken carcasses come into the country; we could compete. We cannot compete with the prices that leg quarters are being dumped in South Africa for,” said Stander.

Chicken thighs and drumsticks are referred to as “brown meat” in the industry and are not the preferred cuts of consumers, especially in Europe.

They prefer “white meat” (breast portions), which results in unwanted brown meat being dumped in third world countries.

“It’s a no brainer, stop the imports and the economy will grow. At present only the middle men (importers) are benefiting and the industry is dying,” said Stander.

Jake Mokwena, a chicken farmer in the North West, said it was time the government intervened and helped farmers.

“We can’t compete against overseas people who are subsidised. And government also needs to help emerging farmers like me, otherwise we will just be observers in this industry,” Mokwena said.

Paul Apostolides, the head of Riversmead Poultry Farm, a family-run business near Port Shepstone on the South Coast of Kwazulu-natal that has been in existence since 1940, said he was “seriously considering laying off some of my staff”.

“We are a labour-intensive business and presently employ 400 workers but we are struggling to compete with the big boys in the industry, who are now dipping into our market.”

Apostolides said Riversmead specialised in supplying freshly cut meat, but that market was being infiltrated by some of the larger local companies that were not able to compete with foreign exporters of frozen meat.

“Frozen whole birds were coming into the country as low as R7 per kilogram, whereas a local producer’s cost was around R23,” said Apostolides.

Breitenbach added: “Government needs to step in and protect the local industry and the thousands of jobs at stake.”

The Department of Agriculture, Forestry and Fisheries and the Department of Trade and Industry had not responded to queries at the time of publication.