FairPlay has accused chicken importers of twisting the facts in their fight against tariffs and duties that reduce import volumes and importer profits.
FairPlay has accused chicken importers of twisting the facts in their fight against tariffs and duties that reduce import volumes and importer profits.
FairPlay took up the issue after ChickenFacts, official mouthpiece of the Association of Meat Importers and Exporters, published a long tirade against duties that cut chicken imports.
Importers opposing authorised trade measures should disclose that “they want more imports that would make them a lot more money”, said FairPlay founder Francois Baird.
ChickenFacts had unfairly accused the South African poultry industry of claiming to be in crisis which it was actually prospering and profitable.
“The poultry industry has celebrated the fact that it has become the largest agricultural industry in South Africa, valued at R74 billion and that it has invested more than R2 billion in production growth,” Baird responded.
“Importers who think this is crisis talk must have their heads under their wings.”
Baird took issue with importers’ frequent portrayal of anti-dumping duties as protectionist. He reminded them that the World Trade Organisation (WTO) sees dumping as an illicit trade practice and authorises anti-dumping duties to restore fair competition.
“South Africa has imposed anti-dumping duties on nine poultry producing countries because official investigations have shown they are importing chicken into South Africa, contrary to WTO rules at unfairly low prices, harming local producers and threatening local jobs. Yet chicken importers want these measures scrapped.”
Baird also accused imports of pretending that the steep reduction in chicken imports since 2018 had resulted solely from the imposition of general tariffs and anti-dumping duties.
“Not a mention of bird flu, which has ravaged Europe and North America in recent years, and has been the main contributor to lower chicken import volumes.”
Baird said the South African poultry industry was growing, and profitable.
“The two major risks it faces are renewed outbreaks of bird flu and a renewal of the flood of dumped chicken imports that pitched the industry into crisis a decade ago.”
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The Association of Meat Importers and Exporters (AMIE) are prolific importers of chicken. Strangely, they seem less keen on the potentially lucrative business of chicken exports.
The Association of Meat Importers and Exporters (AMIE) are prolific importers of chicken. Strangely, they seem less keen on the potentially lucrative business of chicken exports.
AMIE members have been silent on what, if anything, they are doing to sell more South African chicken in foreign markets.
AMIE should be working hard to promote chicken exports, not least because it could be very profitable. The association is a signatory to the 2019 poultry master plan and the revised version signed this year. The Phase 2 plan puts an even higher priority on a rapid expansion of chicken exports.
Yet, in his frequent statements recently on meat export problems, AMIE CEO Paul Matthew has focused on issues affecting red meat, such as oxtail from Brazil. He makes no mention of the fact that the bureaucratic obstacles to red meat exports also affect South African chicken.
Matthew would have us believe that low chicken export volumes in recent years are all the fault of the poultry industry. Yet beef producers are in an “export paralysis”, hamstrung by a shortage of state veterinarians, port inefficiencies and insufficient government support in securing export agreements.
Where is AMIE’s voluble opposition to similar problems affecting poultry exports? Where is its support for increased market access for chicken in Europe and the Middle East? Does its offer to partner with government to provide additional resources where state capacity is stretched apply only to beef exports?
If its signature on the revised poultry master plan means anything, AMIE should stop sniping from the sidelines and show that really is prepared to help sell chicken abroad.
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South Africa could be among the countries facing a surge in imports of Brazilian poultry, beef and pork if a European Union ban on Brazilian meat comes into effect in September.
South Africa could be among the countries facing a surge in imports of Brazilian poultry, beef and pork if a European Union ban on Brazilian meat comes into effect in September.
Brazil is the world’s largest meat exporter and the EU is a major market. Brazil has until 3 September to demonstrate compliance with the EU ban on growth-promoting antimicrobials.
Brazil is frantically trying to meet that deadline.
The EU insists that all meat imports comply with the same standards required of EU producers. Brazilian producers say they already comply, and the issue is about proving government oversight not food safety.
However, they are taking no chances. Brazil’s poultry and beef exports to the EU are rising rapidly ahead of the deadline. Speculation is that EU importers are stockpiling to ensure they have supplies while negotiations continue.
If the ban goes into effect, Brazil will be looking for alternative markets for its meat products, including poultry, beef and pork, and South Africa will be on that list.
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South Africa’s poultry industry needs the government’s attention on important issues, says FairPlay founder Francois Baird. Here he provides new agriculture minister Willie Aucamp with a to-do list.
South Africa’s poultry industry needs the government’s attention on important issues, says FairPlay founder Francois Baird. Here he provides new agriculture minister Willie Aucamp with a to-do list.
Key takeaways:
- Resolve bird flu and culling compensation issues: Minister Aucamp should facilitate bird flu vaccinations and end his department’s legal opposition to compensating farmers for ordered culls (bringing it in-line with global best practices).
- Support poor households and local trade: The government needs to make chicken VAT-free to fight malnutrition, while scrapping the US import quota and halting illegal dumping to defend local markets and boost export opportunities.
- Defend the integrated production model: Minister Aucamp should ask the Competition Commission to stop its market inquiry. Because breaking up large, vertically integrated companies will destroy the efficiencies that keep chicken affordable.
South Africa’s new minister of agriculture, Willie Aucamp, will have a lot on his plate. However, he should give a high priority to the poultry industry, the largest component of the agricultural sector, which has several urgent issues requiring his attention.
FairPlay suggests seven poultry issues which should be high on his to-do list.
They are:
- Getting the mass vaccination against bird flu underway.
- Ending his department’s opposition to compensation for culled chickens.
- The introduction of VAT-free chicken.
- Scrapping the AGOA quota for US chicken imports.
- Clamping down on dumped and illegal chicken imports.
- Boosting chicken exports.
- Asking the Competition Commission to abandon its inquiry into the poultry industry.
Vaccination
Removing the obstacles to vaccination may at last be possible, thanks to former minister John Steenhuisen. New regulations have been promised, and onerous conditions that have prevented large-scale vaccination have been revised, but not yet published.
Minister Aucamp needs to throw his weight behind these initiatives to ensure that the mass vaccination campaign promised a year ago is not further ensnarled in bureaucratic red tape. Bird flu is an existential threat to the poultry industry.
Culling compensation
Since South Africa’s first bird flu outbreak in 2017, the Department of Agriculture has refused to compensate farmers for the chickens it orders them to cull. When a court told the department to end this policy, it appealed against the ruling. This obfuscation must stop.
The law requires compensation to be paid. Minister Aucamp should ensure that it happens.
VAT-free chicken
Chicken is the meat protein favoured by low-income households, yet they are charged 15% VAT on every piece of chicken they buy. Hunger, poverty and unemployment are increasing and child stunting rates are rising because of malnutrition. Poor households are desperate.
Now is the time for Minister Aucamp to support VAT-free chicken.
The AGOA quota
The Africa Growth and Opportunity Act (AGOA) is a piece of United States legislation that provides preferential access to US markets for select African countries. In 2015, to ensure benefits for other industries, the US forced South Africa to accept an annual quota (now 72 000 tonnes) of US chicken free of the anti-dumping duties that should apply.
However, the AGOA legislation also says that if the benefits to other industries are lost, the quota falls away. Because of President Trump’s tariff regime, those benefits have been lost, so the quota should be history. However, under US pressure, the South African government has allowed it to continue, and is prepared to accept it as a permanent feature in a new trade deal. The US also wants all other chicken tariffs lifted.
Minister Aucamp should remind his cabinet colleagues of the size and importance of the poultry industry. It should be supported, not sacrificed whenever the US demands it.
Dumped and illegal chicken imports
Dumped chicken imports have declined significantly, thanks to a combination of anti-dumping dumping duties and widespread bird flu outbreaks in producer countries. Nevertheless, dumping still happens, with chicken portions coming in at half or a third of their production cost. This must stop.
In addition, some chicken imports can be mislabelled to get lower duties, or the value can be under-declared. Minister Aucamp needs to work with SARS to strengthen efforts to combat these illegalities.
Chicken exports
Chicken exports are a priority in the revised poultry master plan, now Phase 2. The problem is that they were also a priority in Phase 1, and chicken exports decreased instead of trebling.
Exports are critical for the poultry industry’s future, and many obstacles remain. Minister Aucamp needs to give this his personal attention, and ensure that, this time around, chicken exports can soar.
Competition Commission
The Competition Commission is conducting a needless “market inquiry” into South Africa’s poultry industry. Not only does this divert executive attention away from running successful businesses, but it could affect the industry’s ability to provide affordable chicken for the nation.
The commission is concerned about the fact that a few large and vertically integrated producers dominate the industry, and believes that this concentration is detrimental to smaller producers who buy feed and day-old chicks from the large companies.
The industry has explained repeatedly that vertical integration – one company handling all aspects of poultry production, from feed and chicks to processing and distributing chicken – is a feature of successful poultry industries worldwide.
It is also what enables them to supply smaller producers at reasonable prices.
Any attempt to break up these large companies would also break this successful business model. The result would be more expensive chicken for a country that desperately needs affordable meat protein.
The poultry industry feeds the nation. Minister Aucamp and John Steenhuisen, the new deputy minister of trade, industry and competition, should advise the Competition Commission to leave poultry alone.
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The SA Poultry Association (SAPA) has welcomed the approach adopted by new agriculture minister Willie Aucamp.
The SA Poultry Association (SAPA) has welcomed the approach adopted by new agriculture minister Willie Aucamp.
SAPA said in a statement that this was a critical time for South African agriculture.
Animal disease management, food security, farmer support and the reduction of unnecessary red tape all required continued focus and practical partnership between government and industry.
“For the poultry sector, one of the most urgent priorities remains the effective management of Highly Pathogenic Avian Influenza. SAPA welcomes the progress made towards an HPAI vaccination framework and believes it is important that the implementation plan is finalised, ratified and operationalised in a manner that is practical for producers, protects national food security, and supports both established and emerging farmers.
“SAPA is encouraged by Minister Aucamp’s focus on creating an enabling environment that allows farmers to farm. This is especially important for small-scale and emerging producers, who require policy certainty, practical regulation, disease-risk management and improved market access to participate more sustainably in the poultry value chain.”
The association also acknowledged the contribution of former agriculture minister John Steenhuisen, and particularly his engagement with the poultry industry on bird flu and broader sector issues. It looked forward to continued engagement, as in his new role as deputy minister of trade, industry and competition, Steenhuisen would be involved in issues that were central to the future of the poultry sector.
“The poultry industry is a major contributor to South Africa’s agricultural and industrial economy, supporting food security, investment and employment across the value chain.
“We look forward to future engagement with both Minister Aucamp and Deputy Minister Steenhuisen to share the industry’s priorities and discuss how government and industry can continue working together in support of a competitive, inclusive and sustainable poultry sector,” the statement concluded.
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A decade after Ghana’s poultry industry was crippled by dumped chicken imports, it remains in trouble.
A decade after Ghana’s poultry industry was crippled by dumped chicken imports, it remains in trouble.
The industry’s woes continue, with unfairly priced chicken imports taking most of the domestic market. This is despite multiple government efforts over the past 10 years to revive local poultry production.
In 2016, Ghana’s then president John Mahama, told the United Nations that chicken imports had reduced local production to 5% of the local market. That year, Ghana launched a $87 million “Broiler revitalisation programme” as Ghana’s poultry industry accused the EU of “unfair competition”.
Last year, President Mahama launched what was described as “an ambitious plan to increase Ghana’s poultry self-sufficiency from the current 12% to more than 75% by 2028”.
The plan includes support for households, smallholder farmers and commercial poultry producers. It is part of the larger Feed Ghana Programme.
However, the industry’s problems remain, including huge volumes of dumped chicken from the European Union and other large poultry producing areas. The issue was raised again at last month’s Ghana Poultry Day, according to a report in WATTPoultry.
Ghana’s farmers are being helped by aid from the European Union, whose own poultry producers contributed to the Ghana industry collapse.
The report said that the EU has donated 150 000 poultry to 3 000 farmers, and has provided EUR 10 million (US$11 million) for the EU Food Security Response Northern Ghana project.
EU bosses are unlikely to appreciate the irony.
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