South Africa’s poultry master plan has been revised, and aims to continue the expansion of the local poultry industry that followed the adoption of the original plan in 2019.
Key takeaways:
- The poultry turnaround is real: since 2019, the master plan helped rescue a struggling industry.
- Master Plan Phase 2: plans include tougher action on dumped imports, an export push, and long-overdue support for VAT-free chicken.
- Weak delivery could risk it all: past export promises fell flat, and if government caves on tariffs or fails to act, gains could quickly unravel.
Details are being kept confidential at this stage, but enough has been said about the contents of Phase 2 of the plan for FairPlay to welcome the good and warn about the weaknesses.
The first phase, from 2019 to 2025, aimed at stabilising and revitalising a poultry industry that had been in crisis because of a flood of dumped chicken imports. It succeeded to the extent that the industry is prospering and profitable, and has risen to become the second most competitive poultry producer in the world.
The focus in Phase 2 is to build on that success, with a continued clampdown on dumped chicken imports, promotions to increase domestic consumption and an export-driven growth strategy.
There is also, at last, support for VAT-free chicken, a cause FairPlay has championed since 2018. This will commit master plan signatories, including two government departments, to the removal of South Africa’s 15% value added tax (VAT) from the chicken portions most consumed by low-income households. VAT-free chicken has so far been rejected by the Treasury.
FairPlay founder Francis Baird was particularly impressed with hostility to chicken imports expressed by deputy minister Zuko Godlimpi from the Department of Trade, Industry and Competition (DTIC).
“The long and short of it is that we do not want to import chicken from other countries anymore. We want local companies to grow more chickens,” Godlimpi said at the signing ceremony, in the presence of chicken importers who were also signatories to the revised master plan.
“We want big commercial South African farmers to produce and supply South Africa with chicken alongside small and rural farmers,” Godlimpi stated.
Curbing imports would require stronger efforts to detect and prevent offences, Baird said.
“FairPlay hopes this means there will be intensified crackdowns on unfairly priced and dumped chicken imports, more vigilance by SARS on mislabelling of import products to reduce tariff payments, and heightened inspections by health authorities at South African ports to ensure imported chicken portions meet our health standards”.
A clampdown would be assisted by the inclusion in the revised plan of additional import controls, such as revised tariff codes to prevent misrepresentation and a floor price that would set a minimum price for chicken imports, countering chicken dumping.
“Whether the government will also be able to resist pressure from the United States to remove import tariffs from US chicken remains to be seen,” Baird said.
While FairPlay welcomed the proposed export drive, as chicken exports are essential to the continued growth of the poultry industry, Baird warned against a repetition of the mistakes made in implementing the first phase of the master plan.
That too, had envisaged an exports bonanza, but it had not happened. Baird called for more ministerial oversight to ensure that master plan signatories, including government departments, delivered on their commitments.
“The full force of the departments of agriculture and of trade and industry will need to be applied in support of opening new export markets and expanding existing ones.”
Baird stressed the importance of the poultry industry to the country.
“The poultry industry is the largest component of South African agriculture. It feeds the nation, supplying more meat than the beef and pork industries combined. It is a strategic national industry, crucial to South Africa’s food security,” he said.
