The relationship between local poultry producers and poultry importers in South Africa has been fraught with tension, largely due to the exuberant duties imposed on poultry imports, particularly bone-in chicken cuts, which are the most consumed portions by South African consumers.

Local producers have long argued that imported chicken, particularly bone-in portions, is causing harm to their industry and undermines the competitiveness of South African poultry.

In 2020, the government raised the general Most-Favoured-Nation (MFN) duties on poultry imports to support local producers in expanding production and focusing on exports. The duty on bone-in poultry increased from 37% to 62%, while the duty on boneless poultry rose from 12% to 42%.

However, critics argue that these measures have led to higher consumer prices and limited access to affordable protein.

While increased duties have safeguarded local jobs and production, the artificial market tipped in favour of local producers raises questions about the balance between protecting domestic industries and ensuring fair competition.

 

Current State of Local Poultry Production

South Africa’s poultry industry is a significant contributor to the agricultural sector, accounting for 22% of the country’s agricultural income. Despite its importance, local production has struggled to keep pace with growing demand due to major factors such as high feed costs and disease outbreaks.

Additionally, small-scale, and emerging poultry farmers often lack access to modern facilities and technology, restricting their capacity to scale up production.

The Poultry Sector Master Plan, developed by the Department of Trade, Industry, and Competition (DTIC), aims to address these challenges by increasing local production, expanding exports, and improving consumer affordability.

Success has yet to be demonstrated. Progress made by the poultry industry in terms of transformation has been slow to emerge, and emerging farmers continue to lament their access to affordable feed and market access.

However, Highly Pathogenic Avian Influenza (HPAI) remains an ongoing concern, with market outbreaks causing substantial disruptions in production.

The poultry industry has urgently appealed to the government to consider easing biosecurity protocols for approved AI vaccines to alleviate the impact of bird flu outbreaks.

With no government compensation for culling chicken flocks, farmers consider vaccination the only realistic solution to bird flu outbreaks.

However, the vaccination rollout has encountered delays due to farmers’ inability to comply with the stringent biosecurity protocols set by the Department of Agriculture, Land Reform and Rural Development (DALRRD).

In response, DALRRD recently announced that it will hold discussions with poultry industry leaders to resolve the impasse hindering the commencement of a vaccination programme.

While the industry views bird flu vaccinations as its only feasible solution to potential outbreaks, the move comes with several challenges including export barriers and silent transmission of the virus in asymptomatic carriers.

 

Industry Growth

Despite the poultry industry’s loud laments around the bird flu crisis, it has demonstrated remarkable resilience and recovery, particularly following the 2023 AI outbreak.

Top poultry producers like Rainbow Chicken and Astral Foods reported substantial revenue growth of 7.9% and 6.4%, respectively, in 2024.

However, the industry’s limited focus on the domestic market and neighbouring countries restricts its growth potential.

It is worth noting that the poultry industry’s reluctance to expand its trade opportunities beyond Africa highlights the fundamental solution to the contentious relationship between local producers and poultry imports.

This hesitation also contributes to the resulting imbalance and lack of healthy competition in the market.

Expanding into global markets would not only level the playing field but also introduce greater potential for market expansion, sustainability, and the development of emerging poultry producers.

 

The Decline of Poultry Imports

Since the introduction of general MFN duties in 2020, there has been a significant decline in bone-in chicken imports, which were once a major source of competition for local producers.

Looking at the latest trade statistics, Imports of bone-in portions dropped by 83% from 224 198 tonnes in 2019 to 38 956 tonnes in 2024.

Source: SARS Trade Statistics

 

While this has provided relief to local producers, it has also created an artificial market dynamic where domestic suppliers face less competition.

This lack of competition has allowed local producers to dominate the market, potentially leading to higher prices and reduced consumer choice.

 

Why We Need Poultry Imports

Although local production is imperative, importing chicken provides several advantages that cannot be achieved through local production alone:

 

Market Competition

Imports help keep local prices in check, ensuring affordability for consumers.

Market competition is a significant driver of industry innovation and a catalyst for expanding South Africa’s export market beyond its neighbouring countries.

This expansion is essential not only for fostering trade relationships but also for diversifying the industry’s revenue streams.

 

Diversification

Importing chicken from multiple countries reduces reliance on a single source and mitigates risks associated with supply disruptions such as disease outbreaks.

 

Food Security

In times of short supply, imports fill the gap and prevent food shortages. This was evident during the 2023 avian influenza outbreaks when imported poultry helped stabilise the market.

Imported mechanically deboned meat (MDM), which is marginally produced locally, provides an essential and affordable protein option for lower-income households. MDM is a key ingredient used in the manufacture of processed meats such as viennas and polony.

Offal, including chicken heads, feet, livers, and other parts, constitutes a significant import that fulfils substantial local demand and affordability standards.

Industry lobbyists are now focused on targeting what remains of the poultry import market. Producers are purportedly concerned at the rising totals for offal and MDM.

Imposing restrictions on these products would not only adversely affect South Africa’s impoverished consumers who depend on affordable protein sources, but also raises concerns about the motives of local producers aiming to reduce fair competition.

 

Balancing Local Production and Imports

To achieve a sustainable balance between local production and imports, South Africa must address key challenges while leveraging the benefits of trade.

By expanding exports to international markets, South Africa can create new revenue streams, reduce dependency on local demand, and increase resilience against domestic market fluctuations.

Investing in infrastructure, such as modernising facilities and providing access to advanced technology, can enhance production efficiency and capacity.

Promoting biosecurity by strengthening measures and expediting vaccine approval processes is critical to preventing disease outbreaks.

Supporting small-scale farmers by providing financial and technical assistance can boost local production and create employment opportunities.

Optimising trade policies by implementing fair trade policies and reducing tariffs on essential imports can ensure a stable supply of affordable poultry.

 

Conclusion

Given the essential benefits of maintaining a balanced market, the primary concern is not whether producers are able to meet local demand. Instead, it is imperative to consider the implications that a monopolised market has on consumers, the overall market dynamics, and food security.

A balanced strategy that integrates local production with international trade is indisputably crucial for the long-term sustainability of South Africa’s poultry sector.