While bird flu is a rising global concern, two measures to prevent another devastating outbreak in South Africa are on hold, awaiting government decisions.
While bird flu is a rising global concern, two measures to prevent another devastating outbreak in South Africa are on hold, awaiting government decisions.
Many countries pay compensation for chickens culled during bird flu outbreaks. The payments not only help poultry farmers rebuild their businesses, but compensation is seen as a disease control measure because it encourages farmers to report outbreaks.
Delays enable the continued spread of the virus.
South Africa, so far, is different. Since the first outbreak in 2017, the government has refused to pay compensation for the birds it orders to be culled, contending that sick birds have no value.
This refusal has been successfully challenged, with a High Court ruling in June ordering the government to reconsider a farmer’s claim based on the fair value of the culled birds. The Department of Agriculture has yet to decide whether to accept or appeal against this decision.
Vaccination is increasingly being seen as an alternative to prevent the mass cullings of poultry flocks. However, the South African poultry industry says the requirements laid down by the government need to be changed, because they are too onerous and too expensive.
No vaccinations have yet taken place in a country which experienced its worst outbreak of bird flu in 2023 and fears that the virus might make a devastating return.
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South Africa has expanded access to China for South African agricultural products, and there is more good news to come later this year, according to agriculture minister John Steenhuisen.
South Africa has expanded access to China for South African agricultural products, and there is more good news to come later this year, according to agriculture minister John Steenhuisen.
Steenhuisen was part of the South African delegation that attended the recent Forum on China-Africa Cooperation in Beijing. A number of agreements were signed by the two countries, including on agriculture.
These included access to the Chinese market for South African dairy products and wool, and acceptance by China of the provincial compartmentalisation of South Africa for the export of beef products following an outbreak of foot-and-mouth disease, Food for Mzansi reported.
“In the past, an outbreak of foot-and-mouth anywhere in the country would have led to a shutdown of the entire beef export market. Under the new memorandum of understanding (MOU) it will only be restricted from the affected province,” Steenhuisen said.
“This is just the beginning of opening up the Chinese market for South African products with more exciting announcements to be made later in the year.”
Steenhuisen said China is the world’s second-largest economy and access to the Chinese market for South African agricultural products opens up opportunity for growth and expansion of local agriculture.
China’s President Xi Jinping told African leaders at the conference that China would invest $50 billion in the continent over the next three years, AFP reports. The news agency said African leaders secured “a plethora of deals” for greater cooperation in infrastructure, agriculture, mining, trade and energy. News24 reports that China last year overtook the European Union as South Africa’s largest trading partner, with two-way flows totalling $55.2 billion and the balance in Pretoria’s favour.
Image: The South African delegation at the Great Hall of the People in Beijing, during the recent state visit to China. Photo: GCIS. CC BY-ND 2.0
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South Africa’s trade regulator, the International Trade Administration Commission (ITAC), has defended itself against criticism that its tariff investigations take far too long.
South Africa’s trade regulator, the International Trade Administration Commission (ITAC), has defended itself against criticism that its tariff investigations take far too long.
Criticisms raised by trade consultancy XA Global Trade Advisors were widely reported, including in the previous issue of this bulletin.
XA’s latest investigation concluded that 93% of import tariff codes applied in 2023 last had their duty levels reviewed more than 20 years ago. Some R81 billion was paid in import duties over 12 months on these tariff codes, out of a total of R87 billion in total import duties paid for the period.
“Perhaps some of these duties should remain, but it’s not clear how this can be known without a formal review, where comments are requested, and the proper cost-benefit analysis is done,” said XA CEO Donald MacKay.
According to a report in Business Day, ITAC countered that no trade authority had the resources to effectively review all tariff codes.
“No trade authority in the world, even those that have more resources than ITAC, could conduct the number of investigations needed to make a meaningful dent in the 3,537 tariff codes that attract duties in South Africa,” Itac said.
Tariff investigations, which should be completed in six months, average 27 months, which XA Global said compounded the problem. Itac explained these investigations were comprehensive and require substantial time and effort.
While the target time frame is six months, various factors — within and outside the control of ITAC and applicants — can cause delays. These extensions were not a sign of inefficiency, but rather a result of the complex and resource-intensive nature of the investigations, it said.
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South Africa’s agriculture minister John Steenhuisen has promised to address the shortage of veterinarians in the country and the challenging conditions under which they work.
South Africa’s agriculture minister John Steenhuisen has promised to address the shortage of veterinarians in the country and the challenging conditions under which they work.
The shortage of vets poses serious risks to animal health, biosecurity, and food security, Food for Mzansi reported.
The country’s veterinarians have long faced numerous challenges, including insufficient resources and medicines, inadequate remuneration, and growing concerns about their mental health. Steenhuisen emphasised the vital role that veterinarians play in protecting and advancing the country’s agricultural sector.
“Veterinarians are a cornerstone of South Africa’s agricultural success, and without addressing the systemic issues they face, we risk jeopardising not only their well-being but the nation’s food security,” the minister stated.
He stressed the importance of making South Africa a place where animal health practitioners can thrive and feel valued for their indispensable contributions to the industry.
At least 100 veterinarians leave the country each year, seeking better opportunities abroad.
Steenhuisen announced that he will convene a meeting with the nine provincial agriculture ministers, senior officials from the department of agriculture, the South African Veterinary Association, and key industry experts.
The objective would be to address the critical challenges facing veterinarians and ensure the sustainability of the nation’s agricultural sector, the report said.
South Africa’s worst food safety lapse – the 2017 listeriosis outbreak which killed more than 200 people and sickened more than 1 000 – may finally be approaching closure.
South Africa’s worst food safety lapse – the 2017 listeriosis outbreak which killed more than 200 people and sickened more than 1 000 – may finally be approaching closure.
The source of the outbreak was determined in early 2018, when the National Institute of Communicable Diseases (NICD) identified it as the Enterprise Foods factory in Polokwane owned by Tiger Brands.
Six years later Tiger Brands has not admitted liability, although it is facing a class action lawsuit brought against it on behalf of the victims, who are claiming both compensatory and punitive damages.
The case has yet to come to trial, but attorney Richard Spoor has published the results of a scientific investigation which he hopes will speed up the case and possibly result in an early settlement.
“This case is watertight, perhaps the strongest case I have ever worked on,” Spoor told Business Day, which said the case involved “the world’s worst recorded listeriosis outbreak”.
The newspaper quoted a Tiger Brands spokesperson as saying the company was committed to ensuring resolution was reached in the shortest time possible. Legal teams for Tiger and its insurers were preparing for trial, and liability would be determined by the court, she said.
In the course of the NICD’s investigation, RCL Foods and its then subsidiary Rainbow Chicken, had wrongly come under suspicion and were ordered to recall food products, costing the company millions.
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In our series of insights into the poultry industry, Gary Arnold from Astral Foods, South Africa’s largest poultry producer, explains how the company dealt with the huge setbacks from last year’s bird flu outbreak, and how its actions can show the way for others.
In our series of insights into the poultry industry, Gary Arnold from Astral Foods, South Africa’s largest poultry producer, explains how the company dealt with the huge setbacks from last year’s bird flu outbreak, and how its actions can show the way for others.
After the disasters of load shedding and avian influenza (bird flu) which hammered the South African poultry industry in 2023, Astral has implemented a cost-focused “back to basics” approach.
Astral is South Africa’s largest poultry producer, and part of an industry facing significant risks and challenges. Two threats stand out: the pervasive danger of bird flu, and the weakening financial strength of the South African consumer.
Bird flu has caused a global crisis within the poultry industry and is regarded as the foremost risk to Astral’s operations.
South African poultry producers first encountered the devastating effects of bird flu in 2017, emphasising the importance of enforcing biosecurity programmes such as strict personnel access control to the chicken houses (while wearing the necessary personal protective equipment), coupled with rigorous sanitation and disinfection processes (like footbaths for personnel entering the poultry house, or wheel washes for vehicles entering the farm), can go a long way from insulating the flock from the spread of these pathogens.
Yet despite the strictest approach to biosecurity – from controlling access and movement of people, equipment and livestock, to careful environmental management, ongoing employee training and awareness, and good poultry stockmanship – the 2023 outbreak revealed the limitations of even the most stringent biosecurity protocols, especially with new strains of the virus that spread through densely populated poultry areas.
The situation is further exacerbated in South Africa due to several critical factors. The unavailability of insurance cover for this disease, the absence of government compensation for mandated disease control measures such as culling, and the lack of regulatory approval for vaccination against bird flu have created a precarious environment. With biosecurity as the only viable defence, the potential for significant financial impacts looms large.
Astral’s approach to this threat has been comprehensive and proactive. The company has invested significantly in enhancing biosecurity measures across its operations, recognising that prevention is the only practical strategy in the absence of vaccination or compensation options. By focusing on rigorous biosecurity protocols and continuous monitoring, Astral is working to minimise the risk of outbreaks and safeguard its operations from the potentially catastrophic impact of a new bird flu outbreak.
Equally concerning is the financial strain faced by South African consumers. Record-high unemployment rates, dependency on social grants and rising costs of living, compounded by high interest rates, have severely weakened consumer purchasing power. This presents poultry producers with a dual challenge: maintaining affordability for consumers while managing the escalating input costs driven by infrastructure failures, localised water and electricity supply interruptions, and deteriorating road networks.
The poultry industry operates on thin margins, and any supply-demand imbalance places significant pressure on producer prices. This means a relentless focus on cost management and operational efficiency to remain competitive while ensuring that its products remain accessible to consumers.
In this context, Astral’s ambition to become the “Best cost integrated poultry producer” is more than a strategic goal; it is a necessity. To achieve this, Astral must excel in areas within its control, such as optimising poultry farming processes and performance. Given that poultry feed constitutes up to 70% of the cost of producing a broiler chicken, the efficient conversion of feed into live weight gain is critical. This efficiency, combined with prudent procurement of raw materials, forms the foundation of a best-cost integrated model.
Beyond feed, every aspect of Astral’s operations must embody a low-cost culture. From employee costs and energy consumption to distribution and processing plant efficiencies, Astral is committed to meticulous cost management. By continuously reviewing workplace improvement targets, the company strives to optimise operations and reduce costs.
The successful implementation of this strategy will have far-reaching implications for the average South African. By achieving its goal, Astral can provide affordable, high-quality protein to the market, supporting the nutritional needs of the population while also contributing to job creation and economic growth. In a country where many consumers are struggling, the ability to offer cost-effective poultry products is vital.
Astral’s recent journey of “Re-set, Re-focus, and Re-start” offers valuable lessons for both large and small producers. After a challenging year marked by external shocks like load shedding and bird flu, Astral recognised the need to return to the basics. This back-to-basics approach was essential to refocus the company’s energy on the fundamental drivers of the business, which had been overshadowed by crisis management.
By assembling teams of specialists and directing their focus towards key areas of the business, Astral was able to turn around its performance and rebuild its balance sheet. The emphasis on self-sufficiency, improving farm performances, optimising processing plant uptime, and managing costs rigorously, exemplifies the practical steps that can lead to a successful recovery.
For smaller producers, the takeaway is clear: in times of crisis, returning to the core principles of efficient management and cost control is crucial. Poultry farming demands the highest standards across all inputs, and inefficiencies can quickly erode profitability. By adhering to a disciplined, back-to-basics approach, producers can navigate challenges and position themselves for long-term success.
Astral’s “best cost” strategy supports local production, job creation, and affordability of chicken, a key protein source for South Africans. The company continues to invest in expanding capacity and improving efficiencies. It benchmarks itself globally, competing well on technical efficiency but struggling with cost competition against the U.S. and Brazil due to infrastructure challenges and subsidies.
Astral remains committed to supporting food security and economic growth in South Africa; its journey underscores the importance of resilience, strategic focus, and operational excellence in the face of significant industry challenges.
Whether dealing with the threat of bird flu or the economic pressures on consumers, Astral’s proactive and disciplined approach serves as a model for others in the industry. By continuing to innovate and refine their operations, poultry producers will safeguard their own future while contributing to the well-being of South African consumers and the broader economy.
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