When government ministers assemble in Parliament ahead of this year’s Budget speech, they will be met by a call to remove value added tax (VAT) from chicken, and a petition signed by thousands of people urging it to support small-scale poultry farmers by removing VAT from their chicken feed.
“We are taking this call direct to the ministers responsible – the Minister of Finance and the Minister of Agriculture,” said Francois Baird, founder of the FairPlay movement. “We will also deliver a copy to the Commissioner of the SA Revenue Service (Sars).
“They must act before it’s too late,” he said.
“The poultry industry is in crisis because of rising costs, poor infrastructure and poor delivery of services such as water and electricity. Small-scale farmers have been particularly hard hit, businesses are closing and jobs are being lost.
“Our hard-pressed consumers are going to be hit by further rises in food prices, including chicken, and household budgets will be stretched to breaking point.
“The one thing that can help everybody – farmers and consumers – is to remove VAT from chicken, dropping chicken prices by 15%. It is easily done, it’s affordable, and it’s urgent.
“We will provide the ministers with a detailed proposal on which chicken portions should be exempt from VAT – specifically those portions which are an essential part of the diet of low-income households.
“We will also present the finance minister with the petition started by a small-scale farmer calling on government to help other small-scale farmers by removing VAT from poultry feed. That petition currently has close to 5 000 signatures and we hope it will be more than that by the time budget day comes around,” Baird stated.
Rapidly rising agricultural costs, including unreliable and increasingly expensive electricity, and the likelihood of chicken price increases as a result, make the removal of South Africa’s 15% value added tax (VAT) from chicken portions ever more necessary.
FairPlay has spearheaded the “VAT-free chicken” campaign since 2018. “We have renewed the call with vigour after the Ukraine war forced up chicken prices globally by increasing the cost of fertiliser, fuel and the feed which makes up 70% of a poultry farmer’s input costs,” said FairPlay founder Francois Baird.
He has pointed out that the chicken industry supplies 66% of South Africa’s meat, and that chicken is popular and affordable throughout the country. This, he said, made 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.”
Yet the chicken industry faces what he calls “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.
Consumers, in turn, face rising prices as producers seek 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.
Baird says the crisis facing the chicken industry requires an emergency meeting of government and industry leaders.
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,” he said in an interview with the Sunday Times.
- FairPlay
