WeeklySA_AdminClose: the result of limited poultry imports from brazil could lead to companies closing down
By WSAM Reporter
South Africa’s poultry industry may face severe pressure due to the outbreak of Brazil bird flu, resulting in the escalation of the price of chicken.
“It is not a matter of if, but when Brazil will face a bird-flu outbreak – and the consequences may prove to be dire for South Africa’s poultry supply,” says Fred Hume, managing director of Hume International.
According to Hume, South Africa urgently needs to agree on a heat treatment protocol for mechanically deboned meat (MDM) in case of a bird flu outbreak such as the protocol currently in place for pork sourced from approved markets abroad.
According to him, imported chicken provides a crucial complement to local production for satisfying local demand. For example, he says, his company alone imported roughly 60,000 metric tonnes of poultry last year, while South Africa as a whole imported three times as much poultry as it exported in terms of nominal value.
“The global bird flu outbreak is posing a significant risk to the country’s food security, especially given the dependence of many households on chicken as an affordable protein. The outbreak has already reached countries such as Argentina which represents real cause for alarm given that the country is neighbours with Brazil, the biggest source of imported chicken in South Africa,” Hume says.
“In fact, Brazil supplies the country with more than half of our imported poultry meat. By comparison, the United States of America provides only 10% to 15% of our imports annually.”
Hume says MDM is, in general, already subjected to heat treatment to reduce the risk of microbial contamination and improve its safety for consumption.
The process typically involves cooking meat at a high temperature for a specific period of time. While the presence of bird flu typically does not impact the safety of poultry for human consumption, having such a protocol in place could simultaneously safeguard MDM supply chains while setting consumers’ minds at ease.
“Without this, South Africans should brace for impact, as the serious threat of an outbreak in Brazil could have a devastating impact on local supply chains, significantly driving up prices or even causing shortages,” says Hume.
To emphasise the urgency of the situation, Hume believes that poultry is an important, high protein, low-cost food staple for the majority of South Africans. Any increases in this vital food’s price would therefore have a severe impact on vulnerable low-income households, who already spend a significant portion of their monthly budgets on food.
“We are already in a difficult situation locally. The Pietermaritzburg Economic Justice and Dignity Group reports in its March 2023 Household Affordability Index that frozen chicken portions saw an average price increase of 9% relative to the same period last year.
“Chicken feet, gizzards and chicken livers saw a rise of 11%, 10%, and 5% respectively over the same period.
This is in addition to the meteoric price increases of other important foods such as cooking oil at 16%, samp at 24%, maize meal at 26% and potatoes at 52%, to name but a few.”
Hume believes that a sharp hike in prices from chicken suppliers, or a marked shortage of supply will have a devastating effect on our economy and lead to increased food scarcity. “Usually, local producers can offset import food shortages and slow runaway prices with local supply, but South Africa simply does not produce enough poultry to meet local demand and be price competitive. Additionally, the local industry is facing enormous cost-pressures as a result of power, water and infrastructure challenges.
“The result of limited poultry imports from Brazil brought on by a bird flu outbreak is therefore that poorer communities could be forced to give up their primary source of animal protein; companies and factories that trade in and process imported chicken could grind to a halt, leading to a spike in unemployment; food security could come under even greater threat and inflation could skyrocket.”
Hume believes that additional interventions are required to avoid the impending catastrophe.
“It’s imperative that our government intervenes before it is too late – which it quite nearly is.” He says beyond implementing effective heat treatment protocols, his company was appealing to government to enact a similar policy with regards to Brazil as it does with America and only ban imports from individual states impacted by bird flu, as opposed to a blanket country-wide ban.
“Additionally, once a country has been declared bird flu free, DALRRD must be more proactive than they have in the past in reinstating import permits for that particular country.”
EMPLOYEES ADVISED TO TAKE DISABILITY COVER TO PROTECT THEMSELVES
Help: The cover is designed to help them financially should they become permanently disabled
By WSAM Reporter
Disability of any form can rob people of their ability to earn an income, whether permanently or temporarily. It is for this reason that if you are currently employed, it is wise to consider some form of disability cover.
Although disability cover operates similar to any other insurance plan, insurance experts define it as an insurance plan that pays some of a person’s income when he or she is disabled from an illness or injury and can no longer work.
According to experts, the cover is designed to safeguard people financially if they become temporarily or permanently disabled due to illness or injury, by paying the insured person a tax-free cash lump sum that they can use to settle a home loan, pay bills not covered by their medical aid or cover living expenses.
Although the definition of a permanent disability may vary from different insurers, Liberty Insurance believes disability cover typically refers to a situation where – due to illness or injury – a person becomes permanently and totally unable to perform their usual jobs or any other career suited to their educational qualifications, knowledge, training or experience.
So, if you do not have disability cover in place, it is worth asking yourself whether you would be able to support yourself and your dependents financially if you became disabled, says JustMoney.co.za.
Liberty Insurance believes that a permanent disability not only means an end to your ability to earn an income, but it can also mean additional costs as you adjust to your new situation. Being paid out a cash lump sum when you need it most can take the financial strain off you and your family and help cover the expenses associated with your new circumstances.
But with the vast range of options on offer, making a selection can be difficult, placing you at risk of incorrect or inadequate coverage. “Bear in mind that a permanent disability not only means an end to your ability to earn an income, it can also mean additional costs as you adjust to your new situation,” according to JustMoney.
“Savings can also help prevent financial loss should you become disabled.” JustMoney.co.za, which is an outfit that helps you to access the financial products you need and helps you monitor your credit health, says people should consider three mistakes that are commonly made when taking out disability cover. It also provides tips to help you to avoid them.
– Not knowing the difference between lump-sum cover and income protection.
According to JustMoney, lump-sum disability cover pays out a set amount if you are permanently disabled. This sum can, for example, help you modify your home and car if you are in a wheelchair, pay off your home loan or fund your child’s education. It could also be invested to provide an income – although this would be subject to market volatility.
Income protection differs from lump-sum cover in that it provides a monthly income if you are unable to earn a living – temporarily or permanently – due to illness or injury.
“It is important to know the difference between these types of cover so you can manage your expectations,” says Porcha Schelhase, Financial Adviser at Liberty Insurance.
“For example, you may be hospitalised with kidney stones and assume your insurer will replace your income while you are not at work. However, if you only have lump-sum disability cover, it wont pay out for temporary disability. It only pays out if you cannot return to work permanently.”
– Underestimating how much disability cover you are likely to need.
The experts believe that policyholders routinely underestimate how much money they will need, especially if they purchase lump-sum disability cover. According to George Kolbe, Head of Life Insurance Marketing at Momentum, most people fund their lifestyle expenses from their regular income, so income protection is a good bet, as it is a known quantity.
“Often, a combination of lump-sum cover and income protection works best. Make sure you have enough funds to take care of your regular expenses, as well as any medical expenses – and factor in inflation, especially as healthcare costs tend to be a few percentage points above consumer price inflation.” A guiding principle is to get cover of six to nine months’ worth of earnings, says Mark Fleming, Financial Adviser at Nexus IFP.
– Not knowing which waiting periods apply.
The experts encourage you to consult your policy to understand which waiting periods, if any, apply to you. “If you have income protection, and, for example, you are only off work for two weeks, but your policy stipulates a waiting period of a month, you will not be able to claim successfully,” warns Schelhase.
She adds that some occupations require a longer waiting period before a claim is allowed, so make sure you understand these claims.
Published on the 96th Edition
