Chicken Industry

Poultry master plan must be implemented urgently

First published in the (“Business Day.

As the government seeks to combat the economic devastation resulting from Covid-19, it has in its hands a ready-made prescription for job creation and poverty alleviation. The poultry sector master plan is in many ways more relevant now than when it was signed at the end of 2019.

The plan aims to create thousands of jobs in a revitalised chicken industry. It is many months behind schedule, mainly because of the impact of the pandemic, so its detailed timetable will need revising and updating. That’s a task that needs to be addressed with urgency because of the prospect of steady job creation, particularly in poor rural areas, over the next three years.

The master plan has been on hold because the virus has created new problems and new priorities for all signatories, from poultry producers to the government departments involved. Ministers and officials at trade & industry, agriculture, health and the Treasury are beset with multiple virus-related issues, all of them urgent.

High on their list is the widespread poverty caused by a wave of retrenchments and small business closures that have affected both the formal and informal sectors. Another urgent task is finding jobs for the unemployed, jobs that will bring incomes to families and communities that were stressed before the pandemic made it so much worse.

This is where the poultry master plan can help. It is not an additional burden for ministers and their deputies but part of the solution to the problems of poverty and unemployment. The focus is on the revival and expansion of a strategic national industry that has been hammered by huge increases in dumped imports over the past decade. Stabilisation and job preservation will come through tariff protection, already under way. Hopefully, anti-dumping cases against transgressors of the past few years will also be brought, urgently.

Growth and job creation will come through expanding local and export markets and replacing imports with local production. It’s a process that could create nearly 5,000 jobs by 2023. A timetable has been drawn up, and responsibilities allocated. It will all be driven by a council tasked with finalising detail and overseeing implementation. It’s a multifaceted solution, ready and waiting to be implemented.

The poultry industry has committed to invest R1.5bn to expand production to meet the higher demand that will result from government interventions. Some of that investment has already been completed, and has been on hold because of lockdown restrictions.

New tariffs announced in March will help reduce the volume of dumped imports from non-EU countries, particularly Brazil, and further action is needed to stem dumping. Huge stockpiles have built up in big chicken-producing countries because of reduced demand during virus lockdowns.

The local industry will not grow and jobs will again be threatened if SA producers are subjected to a renewed assault when Europe and Brazil seek to empty their overflowing freezers. The government and the industry need to prepare now to ward off that assault.

The master plan sets out government-led initiatives to increase local demand and expand export markets for SA chicken. The government is considering requiring all departments and state-owned entities to buy locally produced chicken, as well as initiatives to increase the popularity and consumption of local chicken.

Export promotion initiatives, including a substantial upgrading of the department of agriculture’s veterinary services to enable the health certifications required for export, appear to be on hold.

There has also been little if any progress on new health and safety regulations to stop the thawing and refreezing of imported chicken, or to require imported chicken to carry the same detailed labels as local chicken. This would end the almost anonymous labelling on products, which makes it impossible to identify foreign producers in the event of product contamination.

Customs officials are to step up their efforts to identify and prevent under-declared or falsely declared import consignments. A review was due by March. An important job-creation focus is the planned investment in new black-owned farming operations. The master plan aims to create 1,000 jobs by 2023 through the establishment of 50 commercial-scale contract farmers. This will require an investment of R1.7bn, or R35m per farm.

The SA Poultry Association is to lead and co-ordinate this initiative, while the Land Bank will help finance the land and the Industrial Development Corporation will consider funding expansion. Association members will sign offtake agreements with the 50 new farmers.

Job creation is a higher urgent task than ever in SA because of the devastating impact of Covid-19 on the economy. The master plan is a job-creation framework just waiting to be put into action. Implementation should be expedited; thousands of jobs depend on it.