The Need to Develop the Middle Tier in South Africa's Poultry Industry

High feed costs negatively affect poultry producers in Africa, notes Ishmael Sunga, CEO of Sacau. He argues that with decisive policy, patient financing, and partnerships with commercial farmers, a foundation can be built for a new generation of youth-led enterprises in corn, soy, and feed production.

Africa faces a choice: either continue to view high poultry feed expenses as an inevitable burden for farmers and consumers, or transform this crisis into one of the most practical opportunities for youth employment and agribusiness development on the continent.

The second option requires boldness, coordinated action, and a willingness to look differently at the relationship between food systems, finance, and youth entrepreneurship. Poultry farming is already one of the most accessible ways to enter agriculture because it starts up faster than many other livestock ventures, meets the growing demand for affordable protein, and creates jobs in production, services, logistics, processing, and retail.

However, the industry is constrained by one persistent problem: feed is expensive, unstable, and often unreliable. When prices for yellow corn and soy rise, small and medium-sized poultry producers feel the impact immediately. Margins shrink, expansion plans halt, and promising youth enterprises are forced into survival mode.

Nevertheless, a powerful market signal is hidden within this problem. Since feed is the main cost factor in poultry farming, reducing these costs is not just a technical issue but a business opportunity.

Africa needs more local production of yellow corn and soy, strengthened aggregation, improved storage, increased oilseed processing, development of feed mills, and smarter distribution systems. These are not abstract needs; they are business opportunities waiting for organization, funding, and transfer to ambitious young agri-entrepreneurs.

The response must be decisive: targeted, large-scale support for small and medium-sized yellow corn and soy producers led by youth, linked to real markets and connected to existing commercial infrastructure.

Young people should not be drawn into agriculture only through slogans, competitions, and short-term training programs. They need access to land, resources, mechanization, irrigation, financing, storage, buyers, mentorship, and predictable sales channels.

This is where large commercial farmers can play a crucial role. They should be viewed not merely as charitable mentors but as strategic anchor partners capable of helping to form creditworthy clusters of young producers around real feed demand.

They can provide terms for land access, production planning, support for mechanization and irrigation, resource procurement, drying, storage, quality control, market aggregation, and technical supervision. This is not a call for charity, but a demand for strict commercial partnership.

Large commercial farmers already possess much of the infrastructure lacking among young producers: equipment, irrigation, storage, technical systems, resource supply networks, banking relationships, and market knowledge. If these assets are intentionally opened up through fair and structured partnership, they can become a launchpad for youth-owned production, not a barrier to entry.

A real breakthrough will occur when commercial farmers can act as wholesale financial institutions for young producers. Many established farmers have stronger balance sheets, collateral, credit history, and bank connections. They can arrange larger credit lines in commercial banks, development institutions, and mixed financial instruments, and then channel support to young supplier farmers through resource packages, mechanization services, crop establishment support, working capital advances, and post-harvest services.

This makes agricultural financing more practical. Banks are often reluctant to lend to individual young producers due to limited collateral, thin credit history, and high transaction costs. But when young producers are organized around reliable anchor farmers, proven production plans, insurance, and repayment agreements through product delivery, lending becomes less speculative and more creditworthy.

The anchor farmer benefits from service income, better infrastructure utilization, and expanded supply. The young producer gains financing, resources, skills, and market access. The lender wins from structure and oversight. Everyone has a reason to support the system's operation.

For the idea to translate into real impact, government policy must be uncompromisingly targeted. Governments, central banks, development institutions, and private lenders must stop viewing youth agribusiness as a marginal development project and start treating it as strategic economic infrastructure.

Fiscal incentives must lower the entry threshold. Monetary support must make financing patient and accessible. Incentives for commercial farmers should reward those who genuinely integrate young producers into productive, fair, and scalable value chains.

The fiscal package must be practical and targeted. Tax holidays or temporary tax exemptions should be provided to relevant youth-led enterprises involved in corn, soy, aggregation, oilseed processing, and feed production. VAT or refunds should apply to certified seeds, fertilizers, lime, inoculants, irrigation equipment, storage equipment, and feed production machinery. Duty-free or reduced import of specialized equipment that can lower the cost of mechanization, processing, drying, and quality testing should be permitted.

Accelerated depreciation allowances can stimulate investment in irrigation, storage, renewable energy, mechanization, and asset processing. Investment tax credits can support youth-owned aggregation centers, grain silos, oil presses, and feed development units.

The monetary package must be equally well thought out. Specialized agricultural financing windows for youth should offer preferential interest rates, interest rate reductions, seasonal production loans, grace periods aligned with crop cycles, working capital loans, and longer repayment terms for productive assets.

No serious agricultural financing system should require repayment schedules that ignore the realities of soil preparation, planting, resource application, harvesting, drying, storage, and sale.

Loan guarantees and risk-sharing mechanisms will be crucial. Many young producers lack collateral and long credit histories, even if they have viable production capabilities. Partial loan guarantees, first-loss mechanisms, portfolio guarantees, and insurance-linked lending can encourage banks to issue loans while protecting public resources from unlimited risks. These tools must be transparent, performance-based, and independently monitored.

Commodity note financing should also become part of the solution. Young producers and aggregators should be able to store grain in certified warehouses, receive notes, and use these notes as collateral for short-term loans. This helps them avoid selling in desperation immediately after harvest, improves price negotiations, and strengthens formal commodity markets.

Commercial farmers also need a clear incentive to participate on a large scale. The package should include discounts on interest rates for wholesale services, partial loan guarantees for young producer portfolios, tax deductions for verified auxiliary services, accelerated depreciation for common assets, grants for co-financing irrigation and storage, and duty exemptions on specialized equipment. Performance bonuses should reward anchor farmers whose youth clusters meet production, repayment, quality, and market obligations.

Non-financial incentives are also important. Status as an approved anchor partner, priority access to public-private partnership opportunities, participation in structured feed reserve procurement, technical assistance for supply chain management systems, support for digital traceability, and the right to green financing can make the model attractive to commercial farmers while strengthening accountability.

Of course, the model must be protected from capture and abuse. Young producers must never become invisible labor hidden in someone else's balance sheet. They must remain recognizable economic entities with fair contracts, transparent deductions, timely payments, access to dispute resolution, measurable skills transfer, and a path to building their own assets, credit histories, and market connections. Inclusivity without economic agency is not empowerment.

A broader opportunity extends beyond crop production. Young agri-entrepreneurs can create businesses in feed production, corn and soy aggregation, oilseed meal supply, alternative feed ingredients, digital feed consulting services, wholesale purchasing, last-mile delivery, quality control, and logistics.

In other words, the goal should not just be increasing grain production, but building an integrated youth feed economy.

The prize is too important to ignore. If done correctly, this model can reduce feed costs, stabilize feed supply, strengthen poultry enterprises, expand rural and peri-urban employment, deepen youth ownership of agricultural chains, and help make animal protein more affordable for consumers. It can create regional feed hubs, youth service networks, and integrated poultry systems linking feed, production, finance, veterinary services, and markets.

Africa has all the ingredients for this breakthrough: young people eager for opportunities; growing demand for poultry products; commercial farmers with infrastructure and experience; financial institutions seeking creditworthy agricultural models; and governments under pressure to create jobs and ensure food security. What is missing is not potential. What is missing is the political courage to unite these assets into one focused program.

The message is simple: do not waste the feed crisis. Use it. Use it to create corn and soy production businesses owned by youth. Use it to bring commercial farmers into a fair anchor partnership. Use it to stimulate innovation in agricultural finance. Use it to lower poultry production costs and expand access to affordable protein. With bold incentives, disciplined implementation, and genuine partnership, today's poultry feed crisis can become tomorrow's youth agribusiness revolution.

As South Africa moves into the future, a key question remains: how to reimagine the economic landscape to empower the black majority and ensure sustainable success for future generations? The black majority in South Africa has held political power for thirty-two years, yet it has accumulated significantly less economic power necessary for genuine national transformation. This is not a critique of democracy itself, but rather a description of an incomplete task.

Although the country has become very adept at responding to racism—by discussing racist remarks, acknowledging historical injustices, challenging symbols, and reviewing apartheid crimes, which is often justified—there is another question that deserves equal urgency: what are we building? Political liberation alone does not generate economic power. Economic power is not merely about having jobs; it is tied to owning productive assets, controlling capital, creating companies, generating intellectual property, shaping institutions, influencing markets, and possessing the purchasing power that dictates what the economy produces.

The example of Eskom illustrates this problem. If Eskom is assessed solely through the lens of profit and loss, its fundamental purpose—development—is overlooked. Established as the Electricity Supply Commission in 1923, Eskom was created in industrializing South Africa to provide electricity, a vital input for economic growth. Its initial mandate was closely linked to expanding mining, railways, industry, and the economy as a whole.

Electricity has never been just a consumer good. The built environment sector understands this deeply: construction, manufacturing, digital infrastructure, and Fourth Industrial Revolution technologies transforming design and facility management all depend on a reliable power supply as a basic resource. Power outages did not just inconvenience households; they delayed construction projects valued at 47 billion rand since 2019, stalled industrial potential, and pushed back digital transformation timelines by years.

Of course, Eskom must be financially sustainable, efficiently managed, and accountable for the use of public resources. However, judging a development-oriented institution only by whether it makes money risks confusing means with ends. A more critical question is whether reliable and accessible electricity allows South Africa to produce more, employ more people, build more businesses, and become more competitive. The modern economy cannot function without abundant and reliable electricity, just as the strategy for black economic advancement cannot.

This leads to an uncomfortable reality: Black South Africans constitute the overwhelming majority of the population, but demographic superiority has not translated into equivalent economic power. According to the 2022 South African census, the black population accounted for 81.4%. Nevertheless, household income and wealth remain deeply unequal across races. This is not just an issue of consumption inequality; it is an issue of ownership and productive capacity.

A society can have millions of consumers without having millions of asset owners. This distinction matters. Consumption drives the movement of the economy, while ownership determines its direction. When a Black household buys goods from a multinational corporation, it participates in the economy. But when a Black enterprise produces those goods, hires workers, owns intellectual property, and retains profits, it exercises economic power. These are different things. Therefore, South Africa must broaden its definition of transformation.

Transformation cannot be measured solely by the number of employed people, the number of graduates entering the labor market, or the volume of social welfare spending. These factors are hugely important, but transformation must also ask: Who owns the productive economy? Who owns the enterprises? Who owns the intellectual property? Who owns the land and productive assets? Who controls the capital? Who creates the technology? Who owns the media platforms through which South Africans understand themselves and their economy?

The last question is particularly crucial because economic power and narrative power are closely linked. The black majority in South Africa does not control a comparable mass media ecosystem that reflects its demographic weight. SABC remains the country's most important public broadcaster, but its financial vulnerability has repeatedly threatened its public mandate.

This is important because the media does more than just report reality; it helps determine which issues become national priorities. The same logic applies to knowledge production. Knowledge in the South African built environment—its design standards, software systems, accreditation frameworks, and research infrastructure—is still predominantly shaped by Global North institutions. Black South African engineers, architects, and construction specialists train using curricula developed elsewhere, use foreign software, and build careers whose intellectual products are cited and valued outside the country.

Epistemic ownership is inseparable from economic ownership; it is one of its foundations. Recent public events have demonstrated that South Africa's historical narrative remains actively contested. But the more significant question is not whether history should be remembered—it must be remembered—but whether Black South Africans are actively involved enough in creating the institutions through which their own history is told. If we do not build institutions capable of telling our stories, others will continue to define the national conversation for us.

This also explains why the historical argument is relevant. South Africa's economic structure did not suddenly emerge in 1948. Apartheid intensified and institutionalized racial capitalism, but many foundations of the country's unequal economic order were laid during colonial conquest and the development of the mining economy even before the National Party took power. Systems of labor migration, racial land ownership, spatial segregation, and unequal access to education and capital have a history predating apartheid. Recognizing this is not an exercise in historical accusation; it is necessary to understand why the political changes of 1994 alone could not erase centuries of accumulated economic advantage.

The democratic state inherited an economy where ownership, capital, and productive assets were already highly concentrated. Three decades later, the question must be asked: was our transformation strategy ambitious enough? Perhaps it focused too heavily on redistribution after wealth creation, and not enough on creating new sources of wealth and ownership. Perhaps we spent too much time on how Black South Africans could access the existing economy, and not enough on how to build an economy where Black South Africans are the owners, producers, and providers of capital.

This is especially relevant for townships. Townships are often discussed primarily through the lens of poverty, unemployment, and service provision. But they also represent massive markets. They contain consumers, entrepreneurs, skills, informal businesses, and social networks. The challenge is to convert township purchasing power into productive capacity. Instead of simply asking how the government can increase spending in townships, we should ask how most of that spending can contribute to business development, asset building, and productive capacity within these communities.

How do we turn consumers into shareholders? How do we help informal businesses become formal, scalable enterprises? How do we create financial systems that recognize township entrepreneurs as economic actors, not perpetual beneficiaries? How do we ensure youth are trained not only to compete for jobs but also to create intellectual property, companies, and technologies? How do we build digital construction skill pipelines that make township contractors competitive in a procurement environment increasingly demanding BIM, digital project management, and structured data handover?

An infrastructure portfolio worth 395 billion rand slated for procurement represents an economic opportunity for township construction firms, but only if these firms possess the digital capabilities to participate in tenders and execute public contracts. These are far more complex questions than identifying a racist, but ultimately, they may be more important. There will always be people seeking to provoke, exclude, or humiliate Black South Africans. We cannot build a national economic strategy around reacting to every provocation. At some point, initiative must replace reaction.

The goal should not be the creation of prosperity for the black population as a tool of racial exclusion. The goal must be the construction of a broader South African economy in which the majority possesses sufficient economic strength to participate meaningfully in determining its direction. This requires electricity that supports industry; infrastructure that connects people to markets; education that prepares creators, not just employees; financial institutions willing to fund new ventures; media institutions capable of creating independent narratives; companies able to move from township markets to national and international markets, and, above all, a cultural shift from access to ownership.

South Africa has spent 32 years asking whether democracy provided enough. Perhaps we should ask a different question: have we built enough? Because the future of the black majority cannot indefinitely depend on government redistribution, corporate transformation assessment systems, or reacting to the latest racist provocation. Political power has changed who governs South Africa. The unfinished question is who owns, builds, and shapes its future. And for a scholar specializing in the built environment who has spent their entire working life asking why our townships remain spatially isolated from economic opportunities thirty years after liberation, this question is not abstract. It is work.

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