CHAIRPERSON S REPORT 2014 Presented by Justice Zotwa
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1 CHAIRPERSON S REPORT 2014 Presented by Justice Zotwa
2 INTRODUCTION The DPFO aims to help smallholder poultry farmers from previously disadvantaged communities to move into the mainstream economy. The small farmer s voice can be heard by SAPA. A transformation committee has been formed.
3 VISION To facilitate the entry of developing/smallholder poultry farmers, and especially those from previously disadvantaged communities, into the mainstream agricultural economy.
4 MISSION To lobby and facilitate access to resources for developing/smallholder poultry farmers in order for them to be able to manage successful poultry farming enterprises.
5 OBJECTIVES To be an independently operating division of SAPA with equal rights to the other divisions of SAPA. To promote and advance transformation in the developing /smallholder sector of the poultry industry in South Africa, facilitating the entry of developing/smallholder farmers into the mainstream agricultural economy.
6 MEMBERSHIP AND COMMITTEE The DPFO has 89 members, but has approximately 300 farmers on the DPFO database. Justice Zotwa (Chairperson) Willie Bosoga (Vice- Chairperson) Achmat Brinkhuis Simon Mdau-Mzizi Jake Mokwene Peter Phaahla Cathy Phatsoane Aziz Allie Sulliman Ajallon Zondi
7 THE IMPORTANCE OF STATISTICS Silverpath Consulting and Leading Edge are independent consultants who collect and analyse the data and write reports. Many local and international organisations, banks, government departments, and researchers use our poultry statistics. They make strategic decisions about funding and research priorities based on the information we give them.
8 APPEAL TO DPFO MEMBERS Please continue to take part in the quarterly statistical surveys. It benefits all role players to have accurate information.
9 REPORTED CHALLENGES FACING RESPONDENTS Lack of knowledge-what has to done? Lack of funding No access to markets Poor farm infrastructure Disease outbreaks Price and quality of inputs
10 BROILER INDUSTRY The statistical survey comprises different types of producers from the broiler industry: broiler hatcheries independent broiler growers contract growers abattoirs. Distribution of broiler producers
11 SURVEY RESPONDENTS FOR 2014 A large number of broiler producers exited the market in the first quarter, possibly because of reduced demand for live birds at that time of year. SURVEY STATISTICS Period Q Q Q Q Number of respondents Completed questionnaires Number that stopped farming Number that resumed farming
12 COST OF FEED DPFO members buy small quantities in bags. Commercial farmers buy large quantities in bulk. R/kg price: DPFO members pay more on average. The table shows the percentage differences for the four quarters of 2014: In Q4 the DPFO members paid 12.2% more for their feed than large commercial producers. Q1 Q2 Q3 Q4 +1.0% +5.0% +11.5% +12.2%
13 BROILER FEED PRICE The average difference in feed price between DPFO and commercial farmers in 2014 was R0.35/kg.
14 PRODUCTION VOLUMES AND MARKET Small-scale farmers: Sell small volumes to end users, mostly live birds. Some processed by independent abattoirs. Get high prices. Large R/kg profit margin. Commercial producers: Sell large volumes to retail outlets. Pay substantial rebates (forced to give discounts). Small R/kg profit margin.
15 AVERAGE SELLING PRICES (dressed) DPFO R42.83/kg Commercial R17.10/kg
16 ESTIMATED MARGIN OVER FEED COST The average difference in margin over feed cost between DPFO and commercial farmers was R24.89/kg. DPFO broiler farmers enjoy a substantially larger margin despite the higher feed prices, because of their inflated selling price.
17 EGG INDUSTRY The statistical survey includes both pullet rearers and commercial egg farmers. Distribution of egg producers
18 SURVEY RESPONDENTS FOR farmers stopped producing eggs in the first quarter. SURVEY STATISTICS Period Q Q Q Q Number of respondents Completed questionnaires Number that stopped farming Number that resumed farming
19 COST OF FEED DPFO members paid more for their feed because they buy small quantities. There is also a bagging cost and a mark-up if purchasing from a depot or co-op. The table below shows the percentage differences for the four quarters of 2014: In Q4 the DPFO paid 30% more for feed than large commercial producers. Q1 Q2 Q3 Q % +34.1% +20.8% +30.0%
20 LAYER FEED PRICE The average difference in feed price between DPFO and commercial farmers in 2014 was R1.00/kg.
21 BIRD NUMBERS The laying farms are not stocked to capacity. The cost of purchasing layer replacements may be a factor. PULLET AND HEN NUMBERS Period Q Q Q Q Number of pullets being reared Number of laying hens Farm capacity %
22 EGG SELLING PRICE DPFO members sell their eggs at a much higher price than commercial producers. These price differences are shown in the table below: In Q4 the DPFO earned 40.4% more per dozen than large commercial producers. Q1 Q2 Q3 Q % +26.3% +23.8% +40.4%
23 ESTIMATED MARGIN OVER FEED COST DPFO members are in a better position than commercial farmers. The average difference in margin over feed cost was R1.37/doz.
24 SUMMARY: STATISTICS There is a real opportunity for both smallholder broiler and egg farmers to make profits and develop sustainable businesses. These results emphasise the importance of reliable statistics for the industry and the DPFO in particular. Some areas need to be improved upon and work will be done during the coming year to improve the accuracy of collected data.
25 TRAINING The first DAFF SAPA new-entrant farmer training initiative drew to a close in A total of 206 farmers benefitted. R1 million was spent over a two-year period. DAFF have signed a further agreement with SAPA amounting to R1.5 million over two years. 250 existing farmers will benefit PLEASE FILL THE FARRM PROFILE FORMS SENT TO YOU IN ORDER TO BENEFIT. The DPFO would like to thank DAFF for its continued support.
26 INDUSTRY TRANSFORMATION A transformation committee was established: To facilitate transformation activities within SAPA. To monitor progress and provide reports to key stakeholders. Smallholder farmers and new-entrant commercial producers must be integrated into the poultry value chain. They have a vital role to play in poverty alleviation, food security and job creation.
27 TRANSFORMATION (continued) The DPFO continues to express concern on behalf of its members about the lack of effective transformation in the South African poultry industry.
28 TECHNICAL SUPPORT FOR DPFO MEMBERS The PDMA and the DPFO continue to work together to plot the farm locations. This will allow the PDMA to respond to needs and provide support. The producers are being incorporated into the disease-monitoring and disease-management programmes that have been developed for the large producers.
29 FINANCE The termination of the statutory levy has reduce or eliminated the amount of money available for DPFOspecific projects and also general organising work. As a result most provinces did not have meetings because of lack of funds. Our membership numbers dropped from more than 300 to less than 100. More small farmers closed their farming enterprises
30 CHALLENGES The slow pace of transformation (industry). The non-support of the transformation committee by some large commercial farmers. A lack of funding for the DPFO following the termination of the statutory levy. Exclusion from value chains and marginalisation of emerging farmers by established producers. Price competitiveness and current economic system that favours big players.
31 CHALLENGES (continued) Lack of support from government. Lack of funding and development support for small farmers Red-Tape - Tedious processes that frustrate poultry projects: Import/Export permits, Water licences, EIAs, GAP certifications. Many poultry farmers have gone out of business as a result of prevailing market conditions.
32 KEY SUCCESSES The establishment of the SAPA Transformation Committee and Constitutional Changes. The identification of opportunities within AGOA for previously marginalised importers. The organisation of integrated poultry breeding units/cluster modelling. The sourcing of a new breed of chicken for extending options to developing farmers (Free Range Options).
33 KEY SUCCESSES (continued) Poultry Designation in government procurement to support local production and small farmers in particular- Influenced The establishment of an abattoir for small broiler farmers near Tshwane- Received financial Support. The resurrection of the Lebowakgomo Integrated Poultry Project- Participating. The strengthening of a number of the DPFO provincial bodies- Participating.
34 PROSPECTS GOING FORWARD The DPFO will continue to push for meaningful transformation within the industry to allow for much improved market access and to support its members with advice, training and mentoring. Pioneer the establishment of the Poultry Academy with DAFF Assistance to focus on essential skills Pioneer the establishment of a Poultry Co-operative Bank focus on small loans for farmers
35 CONCLUSION I wish to thank the following for their invaluable contributions: The DPFO EXCO members, especially Willie Bosoga. Moses Modise and Aubrey Morudu for their hard work and dedication. All provincial representatives/committee members. Christopher Mason for the technical and training support. Kevin for stealing work in leading SAPA towards tranformation The government structures that continue to support us.
36 Thank you!!!!!
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