Chicken crisis: Small players face tough hurdles amid power cuts, market challenges

African Poultry Producer Chief Executive Officer, Kobedi Pilane, predicts that about 20% of local chicken producers will close down as a result of the challenges they face with load shedding and anticompetition practices in the industry.

Pilane was speaking on the back of the Competition Commission’s announcement that it will be conducting a market inquiry into the chicken industry value chain as it has reason to believe there are features in the poultry market that may impede, distort or restrict competition.

The chicken industry in the country has been under intense strain since October last year, with the outbreak of the Avian Flu.

ALSO READ: Chicken prices set to finally drop

Challenges

It resulted in the culling of millions of birds in the country, resulting in a 30% reduction in the production of hatching eggs.

This, together with load shedding episodes, challenges such as the increasing costs of importing chicken feed as a result of the war in Ukraine and other reported restrictions has taken a toll on chicken producers countrywide.

To add to this, there has been reports that emerging farmers in the industry face a number of constraints that stop them from making inroads in the industry.

Now, Pilane says, many of them are running out of steam to keep the coop going.

Speaking to the SABC, he said that the commission is well-timed for this reason as the industry has been locked for quite some time by its “big players”.

Written submissions

The Competition Commission last week, called on the public and interested stakeholders to make written submissions on the proposed Terms of Reference (ToRs) for the Poultry Market Inquiry.

The commission said it would also examine the participation of small and medium enterprises and historically disadvantaged persons in the poultry industry value chain.

ALSO READ: Import rebates ‘will make chicken more affordable’

“Market outcomes in the poultry industry matter as chicken meat and eggs are a key source of protein for the majority of South Africans, and particularly low-income households,” said Chief Economist James Hodge.

“A poultry market inquiry into the concentrated and integrated structure of the industry can complement other initiatives to improve the competitiveness of the industry to the benefit of consumers and smaller participants.”