FairPlay founder Francois Baird has called on government to remove value-added tax (VAT) from the sale of chicken portions, citing rapidly rising agricultural costs including expensive electricity.
The campaign has been going on since 2018 and has now been intensified after the Ukraine war forced up chicken prices globally by increasing the cost of fertiliser, fuel and feed which makes up 70% of a poultry farmer’s input costs.
Baird said that the chicken industry supplies 66% of South Africa’s meat, and that chicken is popular and affordable throughout the country. This, he said, makes it a strategic national industry, worthy of government support.
“The chicken industry is the backbone of food security in South Africa,” he said.
South Africa’s poultry industry and its value chain should be declared a key pillar of food security and accorded national prioritisation to minimise disruptions to its ability to feed the nation, he said, yet the chicken industry faced what he called “a perfect storm”, threatened not only by predatory imports but by rising input costs, poor rural infrastructure and daily power cuts, with a substantial electricity price increase likely this year.
He said consumers, in turn, faced rising prices as producers sought to recover much higher input costs.
"Astral, the country’s largest poultry producer, has said that current production costs are R2 per chicken higher than selling prices. The SA Poultry Association (Sapa) estimates that load shedding alone adds R0.75/kg to the cost of producing a chicken," he said.
Baird said the crisis facing the chicken industry required an emergency meeting of government and industry leaders, and an emergency plan that should include the removal of VAT from the chicken portions on which lower-income households relied for their meat protein.
Astral CEO, Chris Schutte has strongly supported the call for vat-free chicken. “I think if the government is concerned about the majority of people and the food security of South Africa, it will as a matter of urgency, review the zero-rated basket and include chicken to relieve pressure on consumers.”