Deteriorating infrastructure, such as electricity and water failures and poor roads, pushes up costs for poultry producers and other agricultural suppliers. The effects were highlighted in a recent webinar hosted by FairPlay.
Deteriorating infrastructure, such as electricity and water failures and poor roads, pushes up costs for poultry producers and other agricultural suppliers. The effects were highlighted in a recent webinar hosted by FairPlay.
Speakers pointed out that industries such as poultry – the largest component of South Africa’s agricultural sector – needed reliable electricity and water supplies and well-maintained roads.
When those failed, production declined, jobs were lost and rural workers migrated to the cities.
“A broiler house turns feed, water, air and electricity into protein. If one input fails for a few hours, birds die. If it fails for a few days, a business fails. Municipal water, wastewater, roads and power are as real a production input as feed,” said Kibiti Ntshumaelo, Managing Director and Principal Civil Engineer of Lekwa Consulting Engineers, in a presentation submitted to the webinar. Ntshumaelo was prevented at the last minute from attending.
FairPlay founder Francois Baird, who moderated the session, recalled the closure of the Clover cheese factory in Lichtenburg, with the loss of more than 300 jobs, because of infrastructure failures. He also noted that a poultry producer had spent more than R100 million on a pipeline to supply water to its production plant, because the municipality could not.
Izaak Breitenbach of the SA Poultry Association (SAPA) said South Africa’s poultry industry was now the second-most competitive in the world, producing chickens more cheaply than every country except Brazil.
However, that competitiveness was threatened by declining municipal services such as water, roads and electricity that raised costs for producers. Despite hopes for improvement, municipal performance was not improving in poultry-producing areas.
Breitenbach also emphasised the importance of the poultry industry for the whole value chain, from grain farmers and feed producers to packaging and retail.
The discussion also looked at solutions, both immediate and longer term. Speakers highlighted the need for municipal maintenance, competence and accountability, and the potential for private sector participation.
Breitenbach mentioned three municipalities where local poultry producers were contributing to, or had taken over management of, the local water supply, to the benefit of all. The towns were Lekwa in Mpumalanga, Boshoff in the Free State and Hartebeesfontein in North West province.
Economist Thabile Nkunjana from the National Agricultural Marketing Council pointed to the success of co-operation between a mining company and the municipality in Midvaal. He also emphasised the impact of poor water services on local communities and small-scale farmers.
Baird highlighted five practical actions submitted by consulting engineer Ntshumaelo. His suggestions were: ringfenced operational and maintenance budgets; putting engineers back in charge of engineering; prioritising municipalities with large operations such as poultry; industry co-investment; and accountability for actions.
Chris Campbell of Consulting Engineers South Africa said the country had a shortage of engineers and should make the best use of those available by pooling resources. He said there were several thousand private sector engineers who could help relieve the municipal shortage.
Baird concluded with the hope that the government would understand the problems and implications of rural infrastructure failures, because municipalities were “the next frontier” for the development of rural areas, the stability of agriculture and the growth of South Africa’s world-beating poultry industry.
Watch the full webinar
Find out more about the speakers on the webinar page.
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South Africa’s two largest poultry producers are both reporting profits this year that are double those of 2025.
South Africa’s two largest poultry producers are both reporting profits this year that are double those of 2025.
Rainbow, the second-largest producer, reported in August that headline earnings per share were up 130%, and that operating profit had increased by 150%.
Now Astral, the country’s biggest poultry producer, is about to report results for the year to the end of September. The company said in a trading statement ahead of the results announcement that it expected headline earnings per share to be up by between 95% and 105%.
Both companies reported that this year’s results were boosted by lower feed costs. Grain prices were low this year due to good rains and record harvests. Feed amounts to 70% of the cost of producing a chicken, and when grain prices drop, profits go up.
The reverse is also true. Rainbow warned in August that the possibility of extreme weather is one of the risks it is watching.
Poultry is a cyclical business, with the good years having to cover the losses of the bad years, when high feed prices, avian flu and load-shedding pushed producers into substantial losses.
We will see in Astral’s results statement in November how it views prospects for 2027, when grain prices are expected to be pushed up by hotter, drier weather, and even drought, under the influence of the coming El Niño weather phenomenon.
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While South Africa bemoans the loss of benefits to multiple industries under America’s African Growth and Opportunity Act (AGOA), FairPlay pointed out that one South African industry had been penalised by the US trade arrangement and that the damage may continue.
While South Africa bemoans the loss of benefits to multiple industries under America’s African Growth and Opportunity Act (AGOA), FairPlay pointed out in a statement that one South African industry had been penalised by the US trade arrangement and that the damage may continue.
A provision tacked on by US negotiators in 2016 has faced South Africa’s poultry industry with a decade of dumped US chicken portions imported with official acquiescence.
“Since 2016, South African poultry producers have had to contend with a substantial annual quota of US chicken free of the anti-dumping duties that should apply,” said FairPlay founder Francois Baird.
The quota was forced on South Africa by the US, as a condition for renewing benefits to other South African industries.
“It was a licence to dump chicken portions in South Africa,” Baird said.
“Indications are that the damage will continue, despite the fact that the quota should have been cancelled a year ago under AGOA rules, after South Africa’s AGOA benefits were negated by new US worldwide tariffs. It should be cancelled anyway, now that AGOA has gone.”
However, South Africa’s trade negotiators are reported to have offered the US a 72 000-tonne annual quota of duty-free US chicken, not linked to AGOA, to help secure a new US trade deal. Details have not been published, and no trade deal has been finalised.
“AGOA gave the Americans the idea of a dumped chicken quota. Now they’re trying to make it permanent, without AGOA, at the expense of a viable South African poultry industry and the thousands of jobs it sustains in rural areas.
“It’s yet another sore point as South Africa is forced out of a beneficial trade relationship with the US,” Baird concluded.
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South Africa’s AGOA exclusion would hurt some industries but would not be a national catastrophe, argued agricultural economist Wandile Sihlobo.
South Africa’s AGOA exclusion would hurt some industries but would not be a national catastrophe, argued agricultural economist Wandile Sihlobo.
In his blog, Sihlobo said South Africa would face an additional Most Favoured Nation (MFN) tariff of around 3.4% on top of the existing tariffs the current US Administration applied to various countries.
“Currently, some South African products enter the US market at 12.5% tariffs (Liberation Day tariff). Without AGOA, these tariffs would rise to 15.9%, slightly reducing the competitiveness of some South African products in the US market.
“Still, one could argue that while this would be a challenging path, it would not necessarily be as catastrophic as we have faced in the past, when we faced much higher US tariffs and still managed to compete.”
In 2025, the South African farming sector faced tariffs of around 30%. Still, agricultural exports to the US were strong, dropping only 3% from the previous year.
“The US remains an important market for South African agriculture, accounting for about 4% of our agricultural exports. Main exports include citrus, berries, grapes, raisins, wine, fruit juices, apples, pears, apricots, and nuts.”
Exclusion from AGOA might not mean a catastrophe.
“This is not to understate the impact some industries may feel as the increase in tariffs slightly reduces their competitiveness. Still, we must manage the sentiment and narrative around this issue well.”
South Africa had to retain and grow existing markets including the US, the European Union and Africa, while diversifying exports to Asia and the Middle East, Sihlobo said.
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South Africa’s exclusion from United States trade benefits under the African Growth and Opportunity Act (AGOA) has been signalled for some time, but it is unpleasant and will have long-term consequences.
Statement by Francois Baird
South Africa’s exclusion from United States trade benefits under the African Growth and Opportunity Act (AGOA) has been signalled for some time, but it is unpleasant and will have long-term consequences.
It will hit a number of South African industries, particularly in the automotive and agricultural sectors. They have benefited since the programme’s inception in 2000, but now profits will decline and jobs will be lost.
A statement by the US government said President Donald Trump intended to “terminate” AGOA membership for South Africa and Rwanda from next year. It said the two countries “are engaging in practices that are inconsistent with AGOA’s eligibility criteria”.
“In South Africa, the Trump Administration is deeply concerned by barriers to U.S. trade and investment, corruption, and threats to U.S. national security and foreign policy interests,” the US statement said.
The exclusion takes effect on 1 January next year.
While the AGOA benefits have been widespread, providing duty-free access to US markets, one South African industry has been penalised. Since 2016, South African poultry producers have had to contend with a substantial annual quota of US chicken free of the anti-dumping duties that should apply.
That was forced on them by the US, as a condition for continuing benefits to other South African industries. It was a licence to dump chicken portions in South Africa.
Indications are that the damage will continue, despite the fact that the quota should have been cancelled a year ago under AGOA rules, after South Africa’s AGOA benefits were negated by new US worldwide tariffs. It should be cancelled anyway, now that AGOA has gone.
However, South Africa’s trade negotiators are reported to have offered the US a 72 000-tonne annual quota of duty-free US chicken to help secure a new US trade deal. Details have not been published, and no trade deal has been finalised.
AGOA gave the Americans the idea of a dumped chicken quota. Now they’re trying to make it permanent, without AGOA, at the expense of a viable South African poultry industry and the thousands of jobs it sustains in rural areas.
It’s yet another sore point as South Africa is forced out of a beneficial trade relationship with the US.
• Francois Baird is founder of the FairPlay movement
The importance of the poultry industry to other parts of South Africa’s agricultural sector was emphasised by Izaak Breitenbach of the SA Poultry Association (SAPA).
The importance of the poultry industry to other parts of South Africa’s agricultural sector was emphasised by Izaak Breitenbach of the SA Poultry Association (SAPA).
In a wide-ranging interview with The National (formerly Business Report), Breitenbach said poultry was one of the biggest sectors in agriculture because it supports the grain, animal-feed, maize and soya industries.
“We sit on top of the grain value chain, and if we can grow the poultry industry, we also grow the feed manufacturing industry. We grow the maize production industry. We grow the soya industry.”
Poultry consumes nearly half of South Africa’s maize crop, and most of its soya production.
Breitenbach also looked at the original poultry master plan, signed in 2019, and the updated version published this year.
He said the 2019 master plan focused on reviving a poultry industry that was in decline. Local production had dropped, imports had increased and producers struggled to make enough money to reinvest in the industry.
The plan focused on addressing anti-dumping duties and combating illegal imports.
“Normal imports weren’t a problem, but dumped imports or illegal imports were a problem,” Breitenbach said.
The poultry industry had grown by 10% since 2019.
The new master plan is expected to focus on reducing the threat posed by avian influenza, increasing per capita chicken consumption and expanding exports of cooked poultry products.
SAPA has also applied for frozen bone-in portions, and fresh and frozen chicken offal, to be zero-rated for value added tax (VAT). The proposal is aimed at improving access to animal protein for poorer households, and chicken is generally the most affordable animal protein, Breitenbach said.
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