SA govt decision not to pay bird flu compensation set aside

The Cape Town High Court has ruled against the government’s refusal to compensate poultry farmers for chickens culled during bird flu outbreaks.

Unless it is taken on appeal, the decision has huge implications for the poultry industry and could potentially result in billions of rands being claimed by chicken farmers for poultry culled in bird flu outbreaks since 2017.

The Department of Agriculture, Land Reform and Rural Development (DALRRD) has maintained that chickens infected with bird flu, or in contact with infected birds, have no value, and thus no compensation is payable.

This interpretation of the law was challenged by a poultry farmer from George, who was ordered to destroy chickens, eggs, manure and feed in a 2021 bird flu outbreak. The farmer’s claim for R31.9 million in compensation was rejected on the basis of “no value”.

The high court ruling rejected this “nil compensation” interpretation, but did not uphold the farmer’s claim, ruling instead that the matter must be considered anew by the department.

The judge ordered that DALRRD must take into consideration that the “animals or things” for which compensation is claimed shall be valued on the basis that they were in a “healthy” state.

If this decision stands as a precedent, it could open the department to claims totalling billions of rand from farmers ordered to destroy their flocks to curb bird flu outbreaks in 2017, 2021 and 2023. The SA Poultry Association (SAPA) has estimated that last year’s outbreaks, the worst in the country’s history, cost the industry more than R9 billion.

While South Africa has applied the “nil compensation” policy, other countries have paid farmers for poultry and goods that have had to be destroyed in bird flu outbreaks. Compensation has two objectives – it prevents poultry farmers going bankrupt because their flocks have been wiped out, and it serves as an incentive to farmers to report bird flu outbreaks on their premises.

When no compensation is paid, farmers may delay reporting an outbreak, or not report it at all, in the hope that enough birds will survive to enable the business to continue. This, in turn, enables the spread of the disease on farms or elsewhere, if the birds are moved or sold.

In South Africa, the “nil compensation” policy has pitched profitable businesses into loss, and many small-scale farmers have closed their doors after bird flu culls because they cannot afford to restock their farms.