THE DEPARTMENT of Agriculture, Land Reform and Rural Development (DALRRD) has confirmed it will not compensate farmers for close to R1.5 billion of losses incurred in the culling of birds possibly contaminated by avian influenza early this year.
In a brief communiqué, the Director of Animal Health at DALRRD, Mpho Maja, said “Animal Health will not offer incentive agreements in the foreseeable future for the destruction of healthy but at-risk commercial chickens.”
This is contrary to the World Organisation for Animal Health, which has recommended that governments compensate farmers, because they are “a key incentive to support early detection” of bird flu.
Analysts said the move may result in farmers not declaring outbreaks of poultry disease at their farms and instead elect to re-package poultry for the meat market to mitigate against the extraordinary losses incurred when birds are culled at the directive of the department.
Bird flu outbreaks result in the compulsory culling of millions of chickens, many of them healthy birds that have been near or in contact with infected ones. This is a necessary measure to contain the disease and prevent it spreading, but it can result in financial disaster for farmers when some or all of their flocks have to be destroyed.
An earlier communiqué by the department was that with the outbreak of the Highly Pathogenic Avian Influenza (HPAI), monetary incentives were offered by the Directorate of Animal Health for the destruction of healthy but at-risk commercial chickens as described in the “Final Draft: Compensation and Incentive Guidelines for Chickens with regard to Highly Pathogenic Avian Influenza”.
In the 2017 outbreak in South Africa, more than 2 million chickens were culled, and the total so far this year is nearly 2.7 million birds in the broiler and egg industries. This is less than 2 percent of the national flock, but it is a sizeable number for many individual farmers, including new entrants to the poultry business.
“Around the world, various compensation schemes are in effect, both to support farmers who have suffered a financial blow and to encourage reporting of outbreaks so that speedy control measures can be put in place. Even though reporting is required by law, if there is no compensation, a farmer may hesitate before making the call that will result in ruin for himself and his family,” said a highly placed official at the South African Poultry Association (Sapa).
The managing director of the egg division at Sapa, Abongile Balarane, would not be drawn to comment, because he said negotiations with the government were at a sensitive stage.
Sapa was currently engaged with the government over the establishment of a fund to cover incidents of poultry disease outbreaks as is standard international practice, but confirmed no agreements were currently in place.
In 2018, Sapa told Parliament that the bird flu losses to farmers were R307 million for the value of the birds and R954m in foregone income, leading to a total loss R1.26bn.
Negotiations were continuing, and the dispute might end up in court.
Official figures indicate that at least 2.7 million birds have had to be culled in the current outbreak, leading to lost stock and opportunity costs of up to R1.5bn.
“After the 2017 outbreak in South Africa, very little compensation was paid. This year, with multiple demands on government finances, the attitude is that compensation will only be paid for sick birds that are culled, not the millions of healthy ones culled on official instruction,” a Sapa official said.
He said the current outbreak was still raging, and it wouldn’t be the last. Containing them was in everyone’s interests – the government, poultry farmers and consumers. Adequate compensation was a key element in the battle against bird flu, and an essential lifeline for affected farmers.
He said South Africa has acted swiftly and efficiently to control and eliminate avian influenza outbreaks, but the country appears to be out of line with international best practice on the issue of compensation for birds culled.
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