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Thursday, November 30, 2023

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Department of Agriculture says there is no new funds for poultry

Paul Makube, senior agricultural economist at FNB Commercial, said the current bird flu outbreak was indeed the worst since 2017. File image.

Paul Makube, senior agricultural economist at FNB Commercial, said the current bird flu outbreak was indeed the worst since 2017. File image.

Published Oct 30, 2023

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The Department of Agriculture, Land Reform and Rural Development (Dalrrd) says that there is no new money targeted for the poultry industry even as it faces untold devastation due to the bird flu outbreak.

The department said the sector could join the broader agricultural sector, and apply for funding open to the broader industry by the department, together with the Land Bank and the Industrial Development Corporation (IDC).

Paul Makube, senior agricultural economist at FNB Commercial, said the current bird flu outbreak was indeed the worst since 2017 and threatened the survival of many producers as it was uninsurable and there was no compensation available for losses as a result of culling of birds in affected operations.

The banking unit said the poultry sector was the largest sector of South African agriculture at R71.2 billion, which was 17.1% of total gross producer value (GPV) of all agricultural production of R419.77bn last year.

It accounted for 40.3% of total GPV of all animal products valued at R177.51bn.

“In terms of consumption, poultry meat and eggs dwarf that of most of the animal protein types with a combined per capita of 46kg in 2022. Only Milk follows closely with a per capita consumption of 37kg,” he said.

Makube said that further, the poultry sector was a highly capital-intensive industry and losses associated with the avian flu could set producers back by several years and some would even cease to exist.

He said that if the government had provided relief to the sector, it was at a time when the industry had adopted and was busy implementing its sector master plan aimed at increasing capacity, achieving transformation, as well as growth in jobs.

“A relief will afford the industry some space to concentrate on fully implementing the ambitious master plan,” he said.

FNB Commercial said the government should realise the magnitude of the problem and its potential impact on the overall economy and jobs.

“Food security is under consideration given the shortages experienced in the country and the potential impact on food inflation which has been in deceleration after peaking at 14.4% in 2023.”

Anthony Clark, an independent trader at Small Talk Daily, said pressure had been brought to bear for the government to follow international protocols and guidelines when an act of God in the natural world caused significant diseases, which have a detrimental impact to the food supply chain.

“As such government provides compensation for said companies to aid in the cull, biosecurity clean-up and repopulation, and the vaccines. It can only be a good move. To date the costs to the poultry sector have been in the billions regarding input cost, diesel costs, infrastructure costs, etc,” Clark said.

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