An exploration of awareness and causes of financial distress of poultry farmers in the North West Province

Abstract

The poultry industry in South Africa is still growing and has long been regarded as an industry that contributes largely to the country's economic growth. The poultry industry is among the industries that provide food security in South Africa. There are challenges that the poultry industry faces which have the potential to lead poultry farms into a state of financial distress. Both internal and external factors can cause financial distress. Simply put, financial distress is when a business is in a financial crisis or problem where they cannot pay off their debt obligations and cover up their monthly finances. The primary objective of this study was to explore awareness and causes of financial distress in the North-West province poultry industry. This objective was realised through an in-depth literature review and an empirical investigation into the awareness and causes of financial distress in the North-West poultry industry. The exploratory research design used qualitative research to collect the data for this study. In this qualitative study, a sample size of twelve participants was used. The participants were identified using non-probability sampling with a judgement convenience sampling technique. Twelve poultry farmers were interviewed using semi-structured interviews. The data were analysed with the aid of ATLAS.ti qualitative data analysis software. Credibility, transferability, dependability, and confirmability were continuously focused on throughout the research process to ensure the validity and reliability of the qualitative research. The empirical results indicate that farmers are aware of internal and external causes of financial distress. Feed, labour, electricity, management and equipment are among the internal causes of financial distress that farmers mentioned. Technology, infrastructure, dumping, diseases and loadshedding are among farmers' external causes of financial distress. The empirical research of this study also highlighted some of the financial distress causes mentioned in the literature. The effect of the Covid-19 on the poultry industry was investigated and the empirical results indicate that the Covid-19 pandemic did not have a negative effect on the poultry industry. This study contributes theoretically to current knowledge on financial distress and preparedness to respond to financial distress situations. Furthermore, this study explores the causes of financial distress in the poultry industry. It also facilitates awareness of factors other poultry farmers can consider and look out for when it comes to their farm finances.