Chicken Industry

Chicken dumping poses a serious threat to SA’s food security

Two conflicting views of food security were laid out this week, one by President Cyril Ramaphosa, seeking to create a new generation of black farmers, and the other by chicken importers promoting the predatory trade that has cost thousands of South African jobs.

Ramaphosa promotes a future with more black farmers to empower more South Africans, help reduce unemployment and contribute to South Africa’s food security. 

The poultry sector master plan, in which the government plays a leading role, will help us reach those objectives.

In his newsletter on October 5, Ramaphosa addressed the issue of land redistribution and said the government wanted to bring more black farmers into the mainstream of the economy. The ultimate aim of releasing parcels of leased agricultural land “is to transform the agricultural landscape by growing a new generation of farmers”.

This aim is shared by the poultry sector master plan, signed last year by the government, the poultry industry, trade unions and importers. The master plan aims to create 5000 jobs through expanding local chicken production over the next three years, including 1000 jobs that will result from the establishment of 50 new black farmers.

Ramaphosa wants the new generation of black farmers to “think big” by not just growing their own businesses but “to advance shared wealth and prosperity in the communities in which they farm”.

“Transforming patterns of agricultural land ownership is vital not just to address the historical injustices of the past, but to safeguard our nation’s food security,” he says.

Poverty and the resultant malnutrition are widespread in South Africa’s rural areas. This is where most of the jobs have been lost to chicken imports as local producers, including small-scale farmers, are forced to curb production or go out of business as a result of losing their market to dumped imports. And it is these very communities in poor rural areas that will benefit most from an expansion of chicken farming.

A different view is put forward by chicken importers, through the ChickenFacts website that is likely to be funded, at least partly from a “war chest”, contributed by individual Brazilian and US exporters bent on capturing the South African market. On the face of it, the website focuses much less on facts than on arguments opposing tariffs and promoting imports. This despite the fact that importers signed the master plan with its stated objective to curb imports through trade measures including tariffs. Importers seem to be strongly opposed to new tariffs that would hit the profits they make from dumped chicken imports.

The latest ChickenFacts newsletter is devoted to the issue of food security and the view that imports are essential if the country is to have sufficient food. Imports, it says, reduce food insecurity by “filling the consumption supply gap, ensuring enough food to feed the nation”.

They should try telling that to Ghana, Senegal, Cameroon and other West African nations where governments had to step in because imports had wrecked the local chicken industries. In Ghana, chicken imports destroyed 95percent of the local industry, putting thousands out of work and spreading misery in areas that were already poverty-stricken. The country is now investing heavily in trying to rebuild the local chicken industry, but local supply still accounts for less than 15percent of the market.

In 2016, Ghana’s President John Mahama told the UN that Ghanaians were joining the migrant queues to Europe because of the destruction of the country’s chicken industry by the world’s big export countries.

That is the sort of devastation that South Africa’s master plan seeks to avoid by curbing unfair or predatory imports and boosting local production for the local and export markets.

The master plan says specifically that food security would be jeopardised if rising imports forced the local industry into terminal decline.

Chicken importers like to pretend that imports ensure low-cost food in South Africa.

No mention is made of the facts that low-priced (dumped) imports are then sold at market prices, with importers and middlemen making fat profits without the low prices being passed on to consumers.

In addition, they pretend that imports are necessary, because demand is increasing and local producers can supply only 70percent of the market. This is the flawed food security argument which ignores the fact that local production has been curbed by decades of massive volumes of dumped imports. It also ignores the fact that the master plan aims to ensure that local production takes a growing share of the expanding market.

The government’s economic recovery plan includes a focus on local production and local jobs. That, too, is reflected in the master plan which proposes a requirement that government departments and state-owned entities should buy only local chicken. An announcement is expected in the near future.

FairPlay has spent the past four years fighting unfair and predatory trade practices such as dumping, because they destroy local jobs and, in the case of chicken imports, can put our national food security at risk. We are not opposed to imports, provided they compete fairly with local products on a level playing field. We are vehemently opposed to dumping and the predatory trade which seeks to take over the local market, as we have seen in Ghana and elsewhere.

A country that is dependent on imports cannot be food secure, because that supply can be switched at short notice. We support the chicken industry master plan’s aim to bolster local production, and we support President Ramaphosa’s idea of a new generation of black farmers who will help buttress South Africa’s food security.

By Francois Baird, founder of the FairPlay movement.

First published in the BUSINESS REPORT on 9 October 2020.