Easy meat: The case of the pork industry in South Africa

South Africa is a minor player in the global pork market, accounting for only 0.18 percent of global pork production, but there is major room for expansion, especially in the Asian market, with pork consumption expected to increase by 7.9 and 6.6 percent per annum over the next five years in China and Singapore, respectively. Indeed, pig fat and related processed pork products have substantial export potential, offering a great economic opportunity for South Africa.*

In 2016, there were approximately 400 commercial pig farmers in South Africa that produced just under 3 million pigs for slaughter that year. Recent analysis actually reveals that the current capabilities within the South African pork industry—primarily the strong gene pool and highly scientific approach to feeding—suggest that the industry has room to expand. The key may lie in exporting to the high-demand markets in Asia (China, India, and Vietnam) and others in Africa (Namibia), as well as diversifying its product mix by, for example, exporting processed pork products in addition to fresh pork. Currently, though, two factors—namely biosecurity and state capacity—constrain the export opportunities presented by these markets, and thus any further expansion in the sector, and enlargement of the value chain.

Biosecurity and state capacity remain hindrances to the South African pork industry, though efforts to address them are moving forward.

According to Davids et al. (2014), of the 485 abattoirs in South Africa, only 150 slaughter pigs, and only five of these comply with the standards and regulations needed for accreditation to export. The limited availability of abattoirs that are export-compliant acts as a key constraint to entering new markets. In response, the South African Pig Producers Organisation (SAPPO), in conjunction with key players in the pig industry (producers, abattoirs, processors, retailers, and pig veterinarians), has made efforts to address biosecurity concerns, developing quality assurance and traceability standards for the South African Pig Industry—known as Pork 360. Pork 360 guarantees that pork producers meet a range of standards relating to, inter alia, pest control, internal biosecurity measures, and feed quality. Currently, pork producers’ participation in Pork 360 is voluntary.

A related issue required to ensure biosecurity is the supply of skilled and experienced veterinary experts. Compliance and accreditation with Pork 360 requires firms involved in primary production and downstream processing to employ or hire an accredited veterinary consultant who, in turn, regularly visits, advises, and evaluates the farm and production processes. Yet in South Africa, there are only 60 to 70 veterinarians per million people, compared to the international norm of 200 to 400 per million people. This shortage is due in part to a combination of veterinarians emigrating and students choosing degrees that are more lucrative.

In order to address these challenges, it is imperative that policymakers design policies that facilitate growth within the pork industry.

Recent research undertaken by the Development Policy Research Unit (and funded and overseen by the International Development Research Centre) outlines a number of potential policy recommendations that would encourage diversification and growth in the industry:

• Designing and maintaining product certifications and standards will require growth in state capacity and expertise, to meet the needs of the pork industry. These tasks would need to be implemented and coordinated across a variety of state entities—such as the South African Bureau of Standards (SABS) and the Department of Agriculture, Land Reform and Rural Development (DALRRD). Such efforts would allow pork producers to access lucrative new export markets, such as China.
• The government, in conjunction with universities, must open more veterinary schools in South Africa. There is currently only one, located at the University of Pretoria, and only around 100 new veterinarians graduate each year—an insufficient number to address the current shortage.
• Similarly, pay for veterinarians—particularly in the state sector—must be increased. A recent report states that a veterinarian in South Africa with 20 years’ experience, could be expected to earn between R39,000 ($2,750) and R44,000 ($3,100) a month—compared to R90,000 a month in the United Kingdom. Not only is pay more lucrative overseas, but degrees in engineering or medicine also offer higher starting salaries than those in veterinary science.

By taking into account these policy recommendations, growth of the pork industry—yet another opportunity to enhance economic growth—in South Africa can be achieved.

Note: This research applies the economic complexity methodology to South Africa. Using the economic complexity framework, structural transformation, which is typically examined at the sectoral level, can now be examined at the more granular product level. The notion of economic complexity assumes that the diversification of a country’s productive structure toward more complex products is an important factor in contributing toward its economic development. This insight has stimulated a number of country case study applications of the framework where product-level avenues of diversification are identified.