Billions at stake in bird flu claims

The long-running dispute between South African poultry producers and the government over the refusal to pay compensation for chickens culled during bird flu outbreaks will be decided in court.

The country’s largest poultry producer, Astral Foods, has lodged a R92 million claim in the High Court in Johannesburg. The claim relates to birds culled and eggs destroyed in the 2017 outbreak of bird flu. Astral wants a reversal of the decision by the Department of Agriculture, Land Reform and Rural Development (DALRRD) to pay no compensation for these losses.

This will be an interesting test case, because billions of rand could be at stake following the rejection of compensation claims after bird flu outbreaks in 2017/18 and again in 2021/22.

The SA Poultry Association (SAPA) told parliament in 2018 that the industry’s losses came to more R1.26 billion – R307 million for the chickens culled and 954 million for “income foregone”. That was after the culling of some 2 million birds.

In the current outbreak, a further 3.7 million birds have been culled, most of them in the egg industry, and the losses will be proportionately higher.

The South African government’s attitude, particularly relating to “at risk” but healthy birds culled on the instructions of a state veterinarian, differs from most producer countries and is contrary to international recommendations.

Compensation schemes are encouraged by the World Organisation for Animal Health, OIE, because they are a “key incentive to support early detection” of bird flu outbreaks. 

Conversely, as FairPlay has pointed out, the lack of compensation discourages reporting by farmers who know they will have to destroy their flocks if they do so.

It is not only poultry farmers who will be following the Astral case with interest. Farmers Weekly reported last year that red meat and pork producers have a similar problem with rejected claims for culling compensation.