South Africa’s poultry industry is in for a tough 2024, as the government introduces measures to discount chicken imports, and launches an inquiry into the local poultry market. This adds to the numerous challenges faced by local chicken farmers who have already suffered enormous losses due to bird flu and load-shedding.
South Africa’s poultry producers must surely believe the government has got it in for them.
The poultry industry has just come through the worst year in its history. Despite being battered and suffering huge losses due to bird flu, high input costs, power outages and other government failures, poultry farmers continued to feed the nation.
For these efforts, there’s not a word of praise or support. Instead, the government seems intent on piling on further misery.
Firstly, the government announced a scheme to encourage additional chicken imports through a temporary rebate on import tariffs. This despite the objective in the 2019 poultry master plan of curbing imports and supporting local industry growth.
The rebates idea was conjured up to solve a problem that doesn’t exist – there is no shortage of poultry on the local market. Nevertheless, the first applications are being processed, and might even be approved.
That’s a punch in the gut from trade, industry and competition minister Ebrahim Patel, who is a master plan signatory and thus committed to its objectives.
Now Patel’s department has followed up with a right to the head – the Competition Commission has announced a Poultry Market Inquiry, in terms that do not bode well for the South African poultry industry.
The commission makes clear that the concentration of large companies in both the chicken and egg industries is to be investigated and that, in its view, is likely hampering competition and driving up prices. And it refers scathingly to “ongoing demands for bailouts through ever-increasing tariffs and the imposition of anti-dumping duties”.
If this hostile spirit prevails, what will become of the master plan’s commitment to “act decisively” against unfair trade and dumped imports?
This is the same Competition Commission that, in March last year, miscalculated the effect of anti-dumping duties and came to the nonsensical conclusion that the import price of chicken was far higher than it was selling for in the shops.
All of this comes on top of the government’s steadfast refusal to pay compensation for the millions of chickens it has ordered farmers to cull to curb bird flu outbreaks, or to pay towards the disinfection and restocking of poultry houses.
For South Africa’s poultry producers, this is not a good start to 2024.
