VAT FREE Chicken

Zero-rating poultry could benefit both consumer and producer

Making South African poultry products exempt from value-added tax (VAT) would assist both the consumer and producer, according to FairPlay, CEO, Francois Baird.

Speaking at a recent Poultry Forum event hosted by Proudly South African in Sandton, Baird said it was important that chicken remained an affordable source of protein for poor consumers and smaller farmers who were struggling to survive.

South Africans consumed approximately one billion chickens every year.

However, despite this high consumption, the poultry industry in South Africa found itself in a crisis due to cheap imports from the US, Brazil and the EU, aswell as the devastation wreaked by the recent wide spread avian influenza outbreak, according to a statement by Proudly South African.

Poultry Disease Management Agency (PDMA) director at the South African Poultry Association, Ziyanda Majokweni, said the sector would like toseeimports be reduced by as much as 50%.

“Reducing imports [would] allow local production to be revitalised. There will be reinvestment in the sector once there is certainty that there is sustainability in the sector.”

“To stabilise the industry, we need to create a framework that makes exporters produce products for South Africa, not simply dispose of stored ‘waste’. The products need to be World Trade Organization (WTO) and treaty-compliant,” she said.

According to Tracy Davids, manager of the market commodity division at the Bureau for Food and Agricultural Policy (BFAP), 86% of all poultry consumed in South Africa between 2000 and 2010 was produced locally, while the remaining 14% was imported.

However, between 2010 and 2016, this figure changed dramatically, with only 23% produced locally and 77% being imported.

If the level of imports was reduced, the sector could become self-sufficient and be able to meet demand, but producers needed to be willing to expand and invest in their businesses.

Smallholder poultry farmer Karabo Mofokeng, of KRE Agri Holdings, who attended the event, said that zero-rating poultry products would allow smallholders to grow their businesses to aviable scale.

Smallholders predominantly supplied the informal market, which had a large market share in the country, he said.- Siyanda Sishuba