Chicken Industry Report


Recently the Brazil Association of Animal Protein claimed that locally produced chicken and Brazil chicken imports are a partnership that creates jobs and improves access to top quality poultry meat. FairPlay founder, Francois Baird, in a letter to Business Day, made clear that these claims are “simply untrue”.

Without unlimited imports of chicken from Brazil, the South African chicken industry easily has the capacity to produce enough chicken domestically not protecting existing jobs but also creating thousands of new jobs.

Calling on the Government to impose protective tariffs on Brazilian chicken imports Baird noted:

“The fact is that we don’t need to import chicken — SA can produceenough chicken locally. Imports have forced local producers to cut back on production, leaving them with spare capacity. As a result, they cannot achieve economies of scale, which reduces their profitability and has already caused job losses.

Higher import tariffs will allow local producers to step up supply, using capacity they already have to replace more expensive imports.

Furthermore, jobs will be created and the benefits of economies of scale will drive prices down. Consumers will certainly not be affected negatively.”


Last year China imposed anti-dumping duties on purchases of broiler chicken products from Brazil following a 10- month investigation that revealed that these types of imports “damaged the domestic breeding industry.These duties have now been extended into 2019 and Chinese importers of Brazilian chicken will be required to pay duties of up to 38.4 percent of the value of their shipments from Brazil.

According to the Chinese Ministry of Commerce, “during the period of damage investigated, the quantity of imported products and market share from Brazil have continuously increased, and the prices of similar domestic products have been drastically reduced, causing serious damage to domestic industries”.

It added that despite a positive trend in some areas of the domestic industry, selling prices and profits fell, while stocks increased, with the industry losing money.

Brazil accounted for more than 50 per cent of broiler products supplied to China, the world’s second biggest poultry consumer, between 2013 and 2016, the commerce ministry said when it announced a probe of the imports last August.

FairPlay contends that Brazilian chicken imports are doing similar damage to South Africa’s domestic industry. FairPlay calls on the Government of South Africa to impose protective tariffs on Brazilian chicken just as China has done.

Without unlimited imports of chicken from Brazil, the South African chicken industry easily has the capacity to produce enough chicken domestically, not simply to protect existing jobs but to create thousands of new sustainable jobs throughout the value chain.


In a recent media report the SA Poultry Association says more people can be employed with the right support measures from the governement and curbing of imports.

The poultry sector employs 110,000 direct and indirect people and supports 20,000 people in the grain industry. However, it has shed thousands of jobs in recent years, blaming this on an influx of cheap chicken imports particularly from the EU and Brazil Brazil is the world’s largest poultry exporter.

The local industry and unions argue the EU and Brazil sell chicken meat below cost and have called on the government to intervene. SAPA recently approached the International Trade Administration Commission calling for an increase to the ad valorem tariff on bone in and boneless frozen chicken portions to 82% from existing levels of 37% and 12%, respectively.

Izaak Breitenbach, the newly appointed SAPA Broiler Organisation GM, said on Wednesday the biggest challenge facing the broiler industry at the end of 2018 was the impact that dumping has had on the sector.

“Producers in Brazil, for instance, have financial incentives to export and there is great concern over the traceability of certain imports that are repackaged in SA, since some importers flout the legal requirements,” he said. “This is an industry that is immensely competitive internationally in terms of those elements of the value chain that it can manage or influence directly.”

Breitenbach said he is in favour of the proposed strategic and operational industry master plan that will address transformation over the total value chain and place chicken on a growth trajectory, to benefit the economy through job creation and additional tax generation.

“Great strides have already been made by chicken companies in developing a successful model for empowerment of black farmers. It is essential for both small and big farmers that the macroeconomic environment is managed successfully to grow the industry; and if that were to happen the industry could expand by 30% and create 30,000 new direct jobs virtually immediately.


In a comprehensive report, a prominent civil society organization in Brazil: Reporter Brasil- Organization for Communication and Social Projects calls out Brazil’s poultry industry and how “it grinds the rights of farmers and workers throughout the country.”

The report reveals how “participation of the Brazilian State was decisive” in allowing just two Brazilian companies to dominate the global poultry trade.

The two companies, JBS and BRF account for 70 percent of Brazil’s chicken exports. JBS made headlines around the world last year for its role in Brazil’s tainted meat scandal.

The Reporter Brasil study reveals that BRF was created less than a decade ago when a merger between a failing Brazilian poultry producer and its main rival was facilitated by “a transaction sponsored by pension funds from state enterprises and the National Bank for Economic and Social Development (BNDES) which acquired the new company’s shares.”

“JBS had also received equity investments and major loans from BNDES in the past decade, and those funds were largely used to purchase companies in the poultry industry. The bank currently holds 24% of the company’s shares.”

A major European NGO, The Institute for Agricultural Trade Policy (IATP) has also published a comprehensive report , The Rise of Big Meat- Brazil’s Extractive Industry.

The IATP report highlights how Brazil’s major poultry exporters have “received large volumes of resources, not only through subsidized loans, but also through the purchasing of debentures and company shares” by state financial institutions.

The IATP report recommends “Eliminating all public forms of subsidies for agribusiness corporations and remove the state as a shareholder of their capital.”

FairPlay believes that fair trade requires a level playing field. South Africa’s poultry industry faces unfair competition from Brazil as a result of direct financial state support of Brazil’s exporting poultry companies. South Africa must act to protect its poultry industry from Brazil’s state-sponsored abuse of its dominant role in the global poultry trade.


Early in January, the FairPlay movement delivered its submission to ITAC in support of the South African Poultry Association’s application for an increase in the rate of customs duty on frozen chicken.

Over the past two years, the FairPlay Movement has been campaigning against opportunistic imports of chicken into SACU states. The campaign was set in motion to unite the efforts of all parties that are suffering under the strain caused by chicken dumping in the region. To this end, FairPlay has formed coalitions to support workers who stand to lose their jobs and all people whose livelihoods are made vulnerable due to dumping.

In its submission FairPlay highlighted the need for protection noting that the chicken industry accounts for nearly 200,000 direct and indirect jobs in the SACU economy. Each of these jobs supports a significant number of family members , and accounts for further dependencies in the affected local economies. As a largely rural industry, chicken farming impacts most powerfully on rural jobs, small towns and their economies, and dependent small businesses. When jobs are lost due to opportunistic predatory chicken imports, the viability and sustainability of the rural economy and small towns are directly endangered.

Notably import volumes of dutiable bone-in portions nearly tripled in 2017 when compared to the previous year. This is a significant spike in a trend that has manifested over the last three years. Current statistics and trade conditions indicate that imports will continue unabated unless the local industry is given better protection.

Low priced, subsidised chicken imports cause price suppression, which in turn constrains local production and investment. Local producers lose market share to producers that can expand their markets through predatory pricing thanks to generous subsidies received from their home governments.

South Africa is a highly efficient producer of chicken, more than able to compete with foreign producers. But competing against foreign government subsidises is quite simply an impossibility. It is well known that production costs of chicken producers in the European Union, the USA and Brazil are subsidised either directly or indirectly, and that this support enables them to expand their export markets at the expense of domestic industries.

FairPlay’s submission concluded that the outcome of the SAPA application will have a decisive economic and social impact on the

SACU member states. Regardless of what ITAC decides, the outcome will not be neutral. It will affect the livelihoods of thousands of workers, their dependants and the towns where they live. Growth, transformation and job creation will either surge or regress dramatically, depending on whether the decision sends a supporting or discouraging signal for new investment. Ultimately, the strategically important local chicken industry can contribute to stability, food security and long-term growth in the SACU region – or its demise can result in a group of impoverished, dependent and economically colonised countries.

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.


Follow FairPlay Social Media on  @FairPlayZA     http://www.facebook.com/fairplayZA/

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