Francois Baird, founder of the FairPlay advocacy movement, tells Annelie Coleman why chicken dumping is an illegal practice, and describes how it threatens South Africa’s chicken and grain industries, the country’s economy, and the jobs and food security of poorer consumers.
What is the FairPlay movement, and why was it founded? The FairPlay anti-dumping movement was founded in 2016 to combat dumping in South Africa and globally. It advocates an end to the illegal and immoral trade practice of dumping, worldwide and in all industries.
We believe in free trade and the rule of law. FairPlay was established because dumping is pernicious and evil; it is an illegal trade practice that kills local jobs and cripples local industries by importing products at prices way below cost. This happens worldwide.
‘FOR EVERY 1 000 JOBS LOST, 10 000 PEOPLE ARE DIRECTLY AFFECTED’
The EU, which dumps chicken in South Africa, has just taken action to protect its steel producers against dumped imports. FairPlay’s first project is to tackle the chicken dumping threatening the South African chicken industry.
Thousands of jobs are at stake: small-scale producers have closed, and large producers are cutting production.
We aim to make the public and the government aware of what is at stake, and advocate a process leading to firm and lasting steps by government to stop chicken dumping. When we succeed in that goal, and we believe we will, we will turn our attention to other industries and other countries afflicted by dumping.
FairPlay cooperates with everyone opposed to dumping and who wishes to support campaigns aimed at stopping it.
At the moment, our support comes mainly from the South African chicken industry and other stakeholders who will be affected if that industry collapses under the weight of dumped imports.
We recently announced that Justice Richard Goldstone, an internationally renowned jurist and human rights supporter, will be FairPlay’s first patron. Our panel of experts, ranging from legal and trade experts to economists, is also growing strongly, with experts from many different countries joining the initial panel of South African experts. What is the difference between importing and dumping? It’s the difference between fair and unfair competition. It’s an important difference.
Imports that comply with rules are legal, and part of normal trade between countries. They provide welcome competition for local industries, and provide choice to consumers. Dumping is illegal, and it contravenes World Trade Organization [WTO] rules and regulations.
Dumping occurs when imported products are sold at prices lower than the selling prices of local products, or for less than the cost of local production. Dumping is predatory; its aim is often to cripple the local industry, and when local production stops, the importers can set their own prices. Dumping creates unemployment. Dumping is therefore not fair competition, and no industry, however efficient, can compete against it.
The South African chicken industry produces chickens, on average, for 25% cheaper than the EU, yet EU chicken is imported into South Africa for less than it costs to produce here. No EU chicken producers could fairly compete here if they traded by the rules.
Another aspect of dumping is that it generates huge profits for those involved. Dumped chicken is not sold to local consumers at ‘dumped’ prices; it is sold at just under the local retail price, gaining significant market share while preventing local producers from recovering their input costs. Consumers don’t benefit, but the dumpers and their customers, the importers, benefit directly.
Government has launched an investigation to establish where the most profits are made along the value chain between importers and retailers.
Some Members of Parliament are questioning the safety of dumped chicken, and there is reason to believe that dumping also threatens food security at a national level.
Why was dumping allowed in South Africa? The real question is: why has firmer action not been taken against chicken dumping more often and more quickly?
In our view, South Africa was targeted because it was one of the few countries that allowed virtually unrestricted chicken imports. One of the problems in countering dumping is that the WTO rules against it can be arcane and can take a long time to implement. When anti-dumping measures are implemented, they can be insufficient to protect an industry.
And if years go by before they come into effect, industries and communities can die. There is no point to the EU insisting on Africa adhering to the rule of law, when the EU itself flouts the rule of law when it suits them.
The sheer hypocrisy of extending development aid to Africa, while its traders are destroying African industries through dumping is gut-wrenching. The departments of trade and industry and agriculture, working together with labour and business representatives, have created a joint task force.
They are considering their own measures to safeguard the industry and its jobs. They also want to protect consumers through the strict application of health requirements.
We hope these measures are strong and that they will be implemented soon. The poor and vulnerable in the affected industries cry out for urgent action. You describe dumping as ‘immoral and toxic’. Why? Dumping affects people because it kills jobs. While dumpers profit, they are destroying jobs in a country with one of the highest unemployment rates in the world. What could be more immoral than that? Real people are involved, and the suffering is real. Dumping is toxic at an individual and community level, because it destroys livelihoods and opportunities.
Unemployment worsens the plight not only of families, but of communities in a region already impoverished by the demise of the textile and footwear industries.
In the poultry industry, it is estimated that up to 10 people in a worker’s extended family are dependent on that one salary coming into the household. This salary provides shelter, food, light, heat, schooling and healthcare for everyone from grandparents to the youngest child. For every 1 000 jobs lost, as many as 10 000 people are affected directly.
This is why dumping is immoral and toxic. How does chicken dumping affect South Africa’s economy and society? Poultry is the largest component of South Africa’s agricultural sector. It contributed some 18% of the sector’s GDP in 2016, and 39% of its animal product gross value. If the chicken industry collapses, there would be serious implications for the economy and the country.
Besides the job losses that have and would occur in the poultry industry, a further 20 000 jobs could be at risk in the grain industry as chicken producers buy nearly half of South Africa’s maize, and almost all of its soya production. Suppliers to the chicken and grain industries would also be affected. Then there is the question of food security. Chicken has become the main protein source for South African consumers.
If they were to become dependent on chicken imports, they would be at the mercy of importers and foreign producers that could charge whatever they liked and switch markets at will. As such, this security would be lost. In 2016, some 80% of South Africa’s bone-in leg quarters were imported from the EU.
This changed in 2017 because bird flu outbreaks have halted imports from most EU countries. According to SARS figures, however, total bone-in imports rose from 77 000t in 2010, to 240 000t in 2016. Of this, 194 000t came from the EU.
• Visit the FairPlay website at fairplaymovement.org