The poor performance of South Africa’s poultry industry contributed substantially to the 9.6% contraction in the gross value added by the country’s agricultural sector in the third quarter of 2023.
Poultry producers suffered huge losses last year because of power cuts, other infrastructure failings and a damaging outbreak of bird flu which necessitated the culling of millions of chickens.
Agricultural economist Wandile Sihlobo said the industry’s headwinds were largely responsible for the agricultural sector contraction, after second-quarter growth of 2.8%. The livestock and poultry industries dragged the sector down, despite good performances by grain, sugar and fruit farmers.
While Sihlobo notes that quarterly statistics can be volatile, he also observes increasing concern about South Africa’s agricultural future, after years of optimism because of good production and export performance. He now thinks the sector could show a “mild contraction” for 2023 as a whole.
“Ultimately, the base effects and headwinds in the livestock and poultry industry weighed on the sector,” he wrote.
“The livestock and poultry industry, which accounts for nearly half the sector’s value, has been hit by animal diseases such as foot-and-mouth, avian influenza and African swine fever. There are weaknesses in the country’s biosecurity system, including the measures in place to reduce the risk of infectious diseases being transmitted to crops, livestock, and poultry.”
Sihlobo also noted “a growing downbeat mood” which could undermine investment and long-term growth prospects.
“The causes of pessimism in the sector are primary challenges such as rising geopolitical tensions, deteriorating infrastructure, poor port performance, weakening municipalities, crime, and energy supply, which all influence farm profitability and growth prospects.
“The South African government, collectively with the private sector, should address these issues to support the sector in the long term,” Sihlobo said.
