Non-profit organisation the FairPlay Movement, which is funded by the local chicken industry, has again called for chicken bone-in pieces and chicken feet to be sold without VAT — a call it first made five years ago.
This time FairPlay argues that a VAT exemption is essential as food is becoming unaffordable. At the same time it is calling for a national summit to address the issue of rising prices.
FairPlay founder Francois Baird said: “We need a food security emergency summit to bring together everyone involved in the value chain.”
Food inflation was 14% in March, according to Stats SA.
Baird said rising prices and household food insecurity are a threat to social stability, echoing sentiments by Pick n Pay chair Gareth Ackerman, who pointed out that blackouts add to the risk of produce shortages.
Ackerman, speaking at Pick n Pay’s annual financial results presentation last week, said: “I feel compelled to caution that the entire food industry is under existential threat. The probability of social unrest relating to food shortages and possible store closures if blackouts get too high is now heightened.”
Speaking at the FairPlay press conference, the CEO of the SA Poultry Association, Izaak Breitenbach, called for a VAT exemption on some chicken items and for food manufacturers and chicken producers to be exempt from stage 10 load-shedding should it occur in winter.
He said food producers are expecting worsening power cuts in winter, which would affect production and threaten food security.
In December, many chickens could not be slaughtered due to load-shedding and then grew too big for the abattoir equipment. That led to culling and chicken shortages in the fast food industry.
Eskom has said it is difficult to reduce load-shedding for food producers or farmers because they fall into large areas that cannot be excluded either because the area is too big or because the technical and staffing aspects of managing so many different load-shedding areas is unfeasible.
Chicken producers are not only struggling with power cuts but feed costs, which make up 70% of the cost of chicken. Feed costs rose in 2022 due to globally elevated maize and soya prices, dropping slightly this year.
Speaking at the FairPlay event, Mervyn Abrahams from the Pietermaritzburg Economic Justice & Dignity Group said the poor could no longer afford chicken and were switching to polony and soya instead.
Since 2018, the group has been tracking the cost of a basic basket of food for a family of four, including essentials such as maize, oil, margarine, eggs and chicken. Abrahams said that for the first time the basket price has risen to more than R5,000 a month.
Abrahams says poor households’ first expenditure each month is on transport and then debt, before putting money aside for food — and they are cutting back on meals.
But he said removing VAT from chicken did not guarantee it would be affordable.
He said the lack of food in some households is a long-term economic issue for SA as stunted children did not develop properly.
“Already 27% of our children cannot benefit from the education budget because they are stunted and therefore cognitively affected. We can conclude that when these 27% of children enter the workforce, they will earn the lowest possible wages and that will reinforce intergenerational poverty.
“We build our future economy on the food that we feed our children.”
Foods exempt from VAT includes brown bread, lentils, maize meal, samp, dried beans and canned pilchards.
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