Chicken Industry

SA poultry body will ask Brazil to explain claims of slavery in chicken industry

The South African Poultry Association (Sapa) will ask the government to seek comment from Brazil about allegations of slavery in that country’s poultry industry.

Sapa said on Wednesday it was extremely concerned about a report by the Washington-based Institute for Agriculture and Trade Policy (IATP) identifying horrific working conditions, amounting to slave labour, at certain Brazilian poultry producers.

Brazil is the world’s largest chicken producer and exporter. It is the main source of chicken imports to SA, according to Sapa.

In Brazil, teams known as chicken catchers worked up to 20 hours a day to catch more than 50,000 chickens a day, the report said.

Reuters reported that chicken catchers “suffer egregious working conditions”. The IATP report was corroborated by the Berlin-based Heinrich Boll Foundation and Brazilian rights group FASE. More than 160,000 people are believed to be trapped in modern slavery in Brazil, Reuters reported.

Brazil’s biggest poultry producers have denied the allegations. No government statement has been issued yet.

Total poultry imports in SA amounted to about 46,000 tonnes a month, listed poultry producer Astral’s CEO Chris Schutte told investors in November. At the time, Astral reported that its headline earnings had almost doubled to R735m, or 1,899c per share. Its poultry segment’s margins increased by up to 6.4%.

Poultry imports in SA included mechanically deboned meat, of which Brazil had long been SA’s main supplier, and, increasingly, frozen chicken portions after imports from the EU were restricted due to bird flu, said Sapa.

SA consumes about 1.74-million tonnes of poultry a year. The Bureau for Food and Agricultural Policy estimates this will increase 38% over the next decade, by about another 700,000 tonnes by 2024.

Margins in the domestic industry have been under duress, however, chiefly because of distortions in the global agriculture market, according to the Department of Trade and Industry. These distortions include subsidies and subsidies upstream in the value chain, such as subsidies of feedstocks.

The domestic industry has also experienced sharp increases in agricultural input costs, affecting feedstocks, such as maize and soya, as well as statutory labour regulation. Power outages and an insecure water supply also threaten the poultry producers.

The department said in a presentation in March that the poultry-market dynamics made matters worse. Developed markets mostly consumed white poultry meat and exported brown meat portions. The resulting increase in imports of mainly brown meat constituted an unfair trade practice, the department said. It said also that some countries limited access to domestic poultry exporters by inappropriately using sanitary and phytosanitary measures as barriers to trade. SA did not always secure equivalence with similar measures, it said.

These issues cost thousands of jobs, said Sapa. In January, it asked the government to insist on inspections and approval of all foreign facilities producing chicken exported to SA. It was of several recommendations made to the departmental task team conducting an urgent investigation of the crisis in the domestic poultry industry. The task team has yet to issue a report, said Sapa.

It said an inspection requirement should be implemented as a matter of urgency, particularly referring to Brazil.

Sapa’s acting CEO, Charlotte Nkuna, said her association hoped the government would announce assistance for the establishment of local production facilities for mechanically deboned meat. This would create South African jobs and save the country huge amounts of foreign exchange, which went to countries such as Brazil, she said.


First Published in Business Day on 06 December 2017