Chicken Industry

Chicken importers should concentrate on the facts

Chicken importers like to argue that the local poultry industry is over-concentrated, dominated by five major producers, and clearly in need of the competition that imports bring.

A formal rebuttal has come from the authoritative Bureau for Agricultural Policy, which has just published its Baseline Agricultural Outlook for the next decade.

Three of the experts behind that publication, including the BFAP managing director Prof Ferdi Meyer, took an in-depth look at the levels of concentration in various sectors of the South African economy.

They compared the income of the 20 largest firms in an industry to the income of all companies in the industry value chain. They found that agriculture and the agri-processing sector are not the most concentrated sectors of the South African economy. The list is headed by state-owned enterprises and other resource-based industries such as mining, forestry and fisheries.

Furthermore, the agro-processing industry was no more concentrated than chemicals, glass, metals and the retail sector.

“It might come as a surprise that farming had the lowest concentration level among all sectors, with only 12% of income produced by the 20 largest firms, which include the corporate sugar, poultry, meat and egg producers,” they said.

Let’s hope that chicken importers drop an argument clearly not supported by the facts.