Poultry GDP contribution could be cut by R1.24 billion – BFAP

The independent Bureau for Food and Agricultural Policy (BFAP) has analysed the impact of regular national power cuts on agriculture in the Western Cape province, an important producer of grain, fruit, vegetables and poultry.

The power cuts, known as load shedding, have plagued industry, agriculture and households nearly every day this year.

The BFAP study said 95% of agricultural producers were dependent on the national power utility, Eskom, as their primary or only source of electricity. Many were installing alternatives, either short term (diesel generation) or longer term (solar power).

It conducted four in-depth case studies – on water management schemes and the canola, poultry and apple value chains.

It found that the impact of load shedding on horticultural value chains was far more severe than on livestock and field crops. However intensive livestock operations, such as poultry, were at very high risk if back-up power systems failed.

“Poultry production is the largest agricultural subsector in South Africa and its controlled production environment requires consistent electricity supply. The sector is also the single biggest consumer of animal feed and is therefore highly influential on both the animal feed sector and the production of raw materials used in the manufacture of feeds.”

BFAP calculated the cost to the chicken industry of high (stage 6) levels of load shedding for three years from 2023 to 2025.

“At 90c per kg produced, the total additional cost to the broiler industry will be R1.55 billion per annum, of which only R311 million is recovered in price.

“This implies a loss of R1.24 billion per annum in GDP that the industry could have generated had it not been for the impact of load shedding. For the Western Cape, the cost equates to R286 million per annum, of which of R57 million is recovered in price,” BFAP said.