AUGUST 2018

Chicken Industry Report

EU IN DENIAL OF ITS OWN FACTS AT FARMER’S WEEKLY AGRIBUSINESS CONFERENCE

Speaking at Farmer’s Weekly Agribusiness Conference last month, Dessy Choumelova, counselor for agriculture, food safety and climate change was in denial of the EU’s own facts on its trade distorting subsidies, its dumping of chicken and its predatory trade practices.

Choumelova also failed to mention that three EU countries — Belgium, Ireland and Denmark — were found guilty of dumping by South Africa’s International Trade Administration Commission (ITAC).

As Germany’s chief envoy for Africa Gunter Nook has noted in media interviews, trade agreements in Africa otherwise known as Economic Partnership Agreements are “neither agreements nor partnerships.” In the case of poultry trade, the EU’s own website lists only 12 countries in the world that are authorized to export chicken to the EU- no African country is on the list.

On the issue of dumping –the EU website states that dumping occurs when product is exported to a country at a price below the cost of production. The EU’s trade market database shows that in 2015 the landed price of frozen chicken in South Africa was 0.96 Euro per Kg. while the cost of production in Europe averaged 1.52 Euro per Kg.

Further the EU position on dumping acknowledges that excessive state support can trigger anti-dumping action. Again the EU’s own website acknowledges that EU farmers receive 46 percent of their income from direct payments from the EU government.

Considering that 70 percent of the cost of chicken production is grains and feed EU direct payments to farmers are clearly a form of massive subsidization.

WHY PARLIAMENT MUST VOTE FOR VAT-FREE CHICKEN

FairPlay Expert Panel member Kevin Lovell writes that the much-awaited Woolard report on expanding the list of zero-rated VAT items has missed a key opportunity to both reduce the cost of some important foodstuffs for lower-income South Africans, and to assist in improving nutrition at the same time. According to Lovell, “a critical requirement of the panel was to carry out a comprehensive review of the existing list of zero-rated items, but it appears that they never did that, which, frankly, makes no sense at all.”

South Africa’s nutritional status remains less than ideal, with many people not being able to afford a diet that reflects their desires or their needs. Poultry is the world’s fastest-growing animal protein source, simply because it is inexpensive, experiences limited cultural and religious barriers, is environmentally friendly in comparison to most other animal protein sources, and is generally quite widely available. It is also the largest industry within the local agricultural sector, whose growth will increase the markets for maize and soybean farmers, among others.

Scientists are clear as to what the minimum amount of protein required for human survival is. They also understand that this is not the optimum level. In South Africa policy measures that increase protein intake, especially by the young and the elderly, could both increase national productivity and improve our national health status.

A number of studies in developing countries have shown that supplementing protein levels, especially with animal protein sources, has led to developmental improvements in young people, giving them a better chance to make it in the hurlyburly of a crowded society. Similar work on the elderly, which applies equally to the developed and developing worlds, shows how increasing protein intake in a way that is affordable and easily bio available makes a difference to the lives of the elderly. Surely those are good enough reasons to make poultry more affordable? The panel notes that “on the whole, goods should only be considered for zero-rating if increased consumption would benefit, or at least not harm, economic and social development”.

So, what brought the Woolard panel to exclude poultry from their zero-rated list when one of the assessment criteria used by the panel was to ensure that “zero rating should incentivise merit goods and address special needs for women, older people, those living with disabilities and children if possible” Hopefully wise heads in Treasury will understand that leaving frozen poultry cuts and portions out of the proposed zero-rating list is not a sensible move.

CAMEROON’S YVONNE TAKANG HAS A LESSON FOR SOUTH AFRICA ON CHICKEN DUMPING

In 1995, Cameroon became a member of the World Trade Organisation and acceded to the agreement on agriculture that capped import duties. This, combined with changing consumer patterns in Europe, had a far-reaching effect on the country’s poultry landscape.

Farmers noticed the decline in business and drew attention to the fact that frozen chicken pieces had become available for the first time in Cameroon.

Globalisation had opened Cameroon’s market without affording it any reasonable protection. In 2003, the civil-society organisation ACDIC (Civil Association for the Defence of Collective Interests) was founded and launched an advocacy campaign backed with powerful evidence.

Yvonne Takang, spearheaded Cameroon’s successful fight-back against the predatory trade practices that came close to destroying that country’s poultry industry.

People such as Takang, who heard and responded to the farmers’ pleas, followed the trail of the frozen chicken to the ports. The culprits were revealed to be ships from the EU and South America. Further sleuthing identified Belgium, France and Germany as the main sources of the chicken pieces. A hallmark of ACDIC’s modus operandi was to mobilise consumers and farmers, persuading them it was time to come together.

The civil society approach was also taken to Europe. As the message spread, European activists took to the streets in support of Cameroon’s assertions that it did not need the chicken that was being imported and that, in fact, the country was capable of producing all it needed. “It was incredibly important to bring together as many organisations as possible,” says Takang

In 2006, the campaign and Takang’s tenacity were rewarded when Cameroon obtained a ban on chicken imports.

While it remains illegal to import chicken to Cameroon, the pressure is not off. The EU threatens now and again to force Cameroon to open its markets, given its status as a signatory to the Economic Partnership Agreement, and even from inside the country threats surface.

“The one thing you should know is that African economies rest on agriculture with a big A,” says Takang. “When that sector is affected, the country’s economy goes down.

“We should fight very hard to protect agriculture on this continent.”

SAPA WANTS TO SUSPEND US CHICKEN IMPORT QUOTA

The SA Poultry Association (SAPA) has begun legal action to halt the import of US chicken on the grounds that the imposition of US tariffs on SA steel and aluminum exports have removed the benefits SA enjoyed under the African Growth and Opportunity Act (AGOA).

SAPA acting GM Ziyanda Majokweni said in her founding affidavit that the suspension of AGOA benefits by the US had triggered the suspension of the rebate that US chicken exporters enjoyed in terms of a deal thrashed out with SA. This allows them to export 65,000 tons of frozen bone in chicken portions free of anti-dumping duty to SA annually.

The rebate for this quota states that it will be suspended if any benefits that SA enjoyed under AGOA as at November 1 2015 are suspended.

However, for the rebate to be suspended, Minister of Trade and Industry Rob Davies has to provide written confirmation that SA’s benefits have been suspended.

This has not happened and SAPA is asking the court to order Davies to provide this confirmation so the quota rebate can be suspended. The court action has been brought under the Promotion of Administration of Justice Act, alternatively the principle of legality.

 

FAIRPLAY CONTINUES TO REACH OUT TO GOVERNMENTS AND NGO’S

A key component of the FairPlay campaign to stop job-destroying predatory trade practices is to continually reach out to governments and their agencies, to foreign embassies and to international NGOs that focus on international trade and development.

By engaging with these stakeholders FairPlay will inform, engage and mobilize development. By engaging with these stakeholders FairPlay will inform, engage and mobilize support for rural workers in South Africa’s sugar and chicken industries who are seeing their livelihoods destroyed by dumping. Recently FairPlay has met with representatives of two European embassies and has engaged with international NGOs that have fought against EU dumping in Cameroon and elsewhere. In addition to this international outreach FairPlay meets regularly with South African policy makers and officials.

Pictured below:

Meluleki Nzimande Chief Commissioner of ITAC is flanked by FairPlay’s Ashoek Adhikari on the left and Danie Kok on the right

TRADE UNION PARTNERS STRONGLY SUPPORT FAIRPLAY CAMPAIGNS AGAINST PREDATORY TRADE

Trade union partners are very active and supportive of the FairPlay campaigns. Recently Sdumo Dlamini, President of the Congress of South African Trade Unions (COSATU) met with FairPlay Founder Francois Baird (pictured above). COSATU pledged to further strengthen their co-operation with FairPlay.

FairPlay’s other trade union partner, the Food and Allied Workers Union (FAWU), has long been active on FairPlay’s campaigns to support workers and to save jobs in the chicken and sugar industries. FAWU has consistently mobilized its membership to join in marches to stop dumping.

The FairPlay Movement is a not-for-profit trade movement that fights for jobs. Its goal is to end predatory trade practices between countries so that big and small nations play by the same rules. It supports the principle that penalties for transgressing those rules apply equally to everybody.

FairPlay was founded in October 2016. In alliance with existing organisations and experts it formulates and promotes strategies to defend communities made vulnerable by predatory trade practices and promote sustainable livelihoods.

These alliance partners are international, currently from the USA, Canada, UK, Ghana and South Africa.

FairPlay mission: To end the scourge of dumping as an immoral trade practice.

FairPlay vision: A world where dumping no longer exists, with free trade according to the rules.

http://fairplaymovement.org

FAIRPLAY SUGAR CAMPAIGN ON SOCIAL MEDIA
Follow FairPlay Social Media on  @FairPlayZA     http://www.facebook.com/fairplayZA/







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