The South African poultry industry is unique in the world for a structure in which five huge commercial producers dominate the industry, influencing legislation in order to preserve their own interests.

Unpacking the Poultry Masterplan

This became very clear when ChickenFacts began unpacking the progress in the Poultry Master Plan.  Certain aspects of the Master Plan were relatively simple and clear-cut, such as the provision of grain for chicken-feed, gathering statistics and regulating labelling.

However, where-ever the Master Plan ventured into the territory of transforming the industry, creating favourable conditions for small and emerging farmers and expanding black ownership,  it became clear that the five large producers that together produce around 70% of all local poultry consumed in South Africa, were blocking the process.

Three areas that are particularly problematic in the PMP are the:

• anti-dumping tariffs
• black participation
• industry investment

South African Poultry Association

All three of these aspects in the PMP have been placed entirely under the control and jurisdiction of the South African Poultry Association, an organisation made up of Astral Foods (supplies 26% of the South African market), Rainbow Chickens RCL (21%), Country Bird (15%), Sovereign Foods (10%) and Daybreak (9%) and 52 other producers that make up the remaining 19%.

A clue to the way that these five companies dominate the narrative begins even with the way that industry statistics are presented.  The statistics above show the make-up of the local poultry industry.  But when SAPA cites industry statistics, they always include imports as part of the volumes of supply (which according to different reports ranges from 19% to 26%.)

However, imports include Mechanically Deboned Meat (MDM) which has to be imported as it is not produced in South Africa and is the staple ingredient of items such as sausages, polony and other processed meats, as well as a mainstay of the fast food industry.  By including imports in local industry statistics, and by including MDM in those import statistics, SAPA is substantially skewing the picture. This is the first problematic aspect of the PMP.

SAPA and their mouthpiece FairPlay, speaking on behalf of the five large producers that together make up around three quarters of local production, have demonised imports to the extent that the Department of Trade and Industry has been pressured into adopting protectionist ‘anti-dumping tariffs’, despite the fact that actual proof of dumping does not exist.

Investigation by ITAC

An investigation by the International Trade Advisory Commission (ITAC) – launched after protests from countries that export chicken to South Africa – lasted for two years and was intended to settle the dumping debate.  The investigation was supposed to be completed on June 14, but to date no results have been released.  In the meantime, the five large poultry producers, through their mouthpieces SAPA and FairPlay, continue the yet-unproven narrative that imports are a predatory threat to the local industry and are shrill in their demands for protection, even while the largest poultry producer in South Africa, Astral, has recently posted profits of R1,4 billion.

The second problematic aspect of the PMP is the investment in developing the local industry.  SAPA claims that the industry invested large sums in the empowerment of emerging farmers.  The actual sum varies between R1,4 billion and R1,7 billion, depending on what gets included in that development sum.

However, our investigations confirmed that this funding was already allocated by Astral in their 2018 annual report towards strengthening their own internal capacity.   This funding was therefore not allocated towards developing small or emerging farmers, but rather to increase and consolidate Astral’s dominance of the industry.  

The job creation aspect claimed by SAPA in the PMP, additionally, is also the increased employment internally at Astral.  While job creation and expansion is a worthwhile corporate achievement, it should not be claimed as a victory for empowerment and ownership in the PMP.

Another troublesome aspect is the claim by SAPA that 50 ‘contract growers’ have been established.  According to AFASA, the entire concept of ‘contract growers’ is problematic, as it implies a closed system where the contract grower is entirely dependent on their single large customer.

Contract Growers

But it gets worse.  

• SAPA has published the names of 50 ‘contract growers’.

• However, we have been unable to ascertain that any of these ‘contract growers’ actually exist, as there is no record of any of these businesses in CIPRO or anywhere else online.

• When we asked SAPA for contact details, they refused to divulge them, claiming that ‘contract growers’ were audited by the Department of Agriculture.

• When we asked the Department of Agriculture to confirm this, they refused to do so.

Despite months of investigation, we have only been able to confirm one of the ‘contract growers’ – KwaMhlanga Poultry Project, which collapsed in 2019. When we sent questions to SAPA about KwaMhlanga, the reply was that the health or otherwise of KwaMhlanga was not their concern.  This is an odd response for an organisation that states in the PMP that the ‘contract grower’ project has been an unqualified success.

What Conclusions can be Drawn from This?

The PMP has many aspects which are welcomed and important.  And there has been progress on a number of fronts.  However, it has become clear that any aspect of the PMP that challenges the dominance of the five dominant companies is suppressed and only one version of events has been allowed.

We have been asking SAPA for clarity on a number of issues since April, with no success. By contrast, SAPA, through its mouthpiece FairPlay, has begun attacking ChickenFacts on social media with insults and aspersions.  It seems that we have hit a sore spot!

Funding Spent on Expanding Astral Foods

So here are our final conclusions on the PMP:

1.  The funding that was claimed to be dedicated to ‘empowering small and emerging farmers’ was actually spent on expanding Astral Foods.

2.  The job creation was actually an expansion of the operating capacity of the five large producers.

3.  There has been no progress towards increasing black ownership in the industry, which is why the African Farmers Association of South Africa (AFASA) has withdrawn.

4.  The only narrative around empowerment has been from SAPA, which cannot be independently verified as SAPA refuses to divulge any confirmation or detail.

5.  The only narrative around dumping has been an intensive campaign from SAPA (via their mouthpiece Fair Play) that conflates legal imports with dumping and predation.  They are the only voice that has been speaking to the government on this issue, and they do not allow any other perspectives or investigations to interfere with that narrative.

The fundamental underpinning of the PMP was supposed to be the expansion and growth of the industry by empowering emerging farmers.   However, the PMP, which was devised almost entirely by SAPA, which has progressed only in the areas that benefit SAPA, and information about which is entirely controlled by SAPA, cannot be regarded as a true reflection of the industry.