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False news on the way

FairPlay has been warning that South Africa could face a wave of dumped chicken imports because large producers in government-supported markets like Brazil and the EU had built up mountains of frozen product during coronavirus lockdowns.

In preparation for that wave of dumped imports, we also expect that those behemoth producers will launch a campaign of false news designed to undermine the implementation of the South African poultry master plan.

They will seek to deceive South Africans, making a mockery of the Department of Trade and Industry that has worked diligently with the chicken industry to create a poultry masterplan that will revive and grow the industry. All of this in a concerted effort to bully this country into submission before the destructive force of predatory trade.

The pressure on producer countries to get rid of surplus stocks must be acute. In early June, EU producers were calling for a halt to chicken imports because “freezers all over the EU are already full”. That would also have been true in Brazil, the world’s major chicken exporter, as well as other large exporters such as the US and Argentina.

And what was true in June must by now be much worse because a recovery in global markets is a long way away. Their freezers are not only full, but overflowing. They will be looking very closely at all the markets where they have dumped products before, including South Africa. In addition, China has recently rejected Brazilian chicken consignments, which may well end up in South Africa instead.

In order to increase their exports to South Africa, producer countries have to undercut the opposition to dumped chicken imports that has built up in recent years, led by FairPlay.

Having successfully destroyed the local poultry industry in many African markets, like Ghana, where they can now charge extortionist prices for chicken, they have the big chicken guns trained on South Africa next. But they can only make headway if they create a false reality to make the South African public believe the local industry is exaggerating when it demands fair terms of trade for one of South Africa’s key strategic industries that directly and indirectly employs 110,000 people.

They have to make the public believe that imports are necessary to keep our nation fed when in reality, predatory trade undermines our food security and makes us dependent on them.

Therefore, expect in the near future, to hear false claims such as:

FALSE CLAIM NO.1

The idea of a wave of imports is nonsense. South African chicken imports have declined sharply and are still dropping. FALSE.

The truth is that the decline in imports is sharp, but temporary. It has been caused by a combination of disrupted supply chains, reduced demand because of the economic effects of the pandemic, higher tariffs and exchange rate changes that made imports more expensive. Predatory trade such as dumping has been going on for nearly two decades, and will resume in force when producing countries feel the moment is right. Given their huge oversupply, that moment might be approaching.

FALSE CLAIM NO.2

South African producers are unable to supply more than 70% of the local market. If imports are not allowed, then poor people in particular will go hungry. FALSE

The truth is that South African producers could supply the entire local market if a level playing field was enforced, meaning that predatory imports were stopped. Increased local production is what the Poultry Sector Master Plan envisages – local importers also signed that document and should be supporting its commitments. Moreover, for a quick start, local freezers are also full of chicken, available for local sale.

FALSE CLAIM NO.3

South African chicken producers don’t need protecting. They’re uncompetitive because they’re inefficient. They need strong competition via imports to get them into shape. FALSE

The exact opposite is true, South African producers are among the most efficient in the world, and produce chicken at lower cost than every country in the heavily subsidised EU. The biggest cost differential is feed, because South African imports nearly all of its soya and in some years imports maize. This “inefficiency” argument is false, but it hasn’t stopped importers spinning it repeatedly in order to deceive the public.

We have seen these false flag arguments before and we think that these and other items of false news about South African chicken are coming again. And they are intended to set the scene for that wave of imports to follow.

Mark my words. Bring anti-dumping cases now!

Francois Baird, Founder of the FairPlay movement.


References:                                             

  • Politico, 19 August 2020

https://www.politico.eu/interactive/ghanas-poultry-industry-accuses-eu-of-unfair-competition/

  • Business Report, 25 June 2020

https://www.iol.co.za/business-report/covid-19-exposes-sa-to-accelerated-food-security-threat-says-fairplay-49843929

  • Bruce Whitfield Money Show, 29 June 2020

http://www.capetalk.co.za/articles/388270/mountain-of-frozen-chicken-build-up-during-lockdowns-about-to-be-dumped-on-south-africa

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