Statement by Francois Baird, founder of the FairPlay movement
Issued: 1 October 2023.
The Democratic Alliance is sadly mistaken in its call to suspend or cancel all tariffs on imported chicken. For years, the DA has been misled by chicken importers and this is but the latest example – cutting anti-dumping duties would not benefit consumers but it would make chicken importers super rich.
It would also cost thousands of South African jobs, mainly in poor rural areas and devastate the poultry industry which is the R60 billion backbone of South Africa’s agricultural economy.
Dean MacPherson, the DA’s trade and industry spokesman quotes the estimate by chicken importers that chicken prices could drop by 33% if tariffs were removed. For years, chicken importers have profited handsomely from buying low and selling high, because their chicken imports sell at almost the same price as local chicken. MacPherson does not ask why cheap dumped import prices are not passed on to consumers. This was clearly demonstrated when the suspension of anti-dumping duties for 12 months until August had no discernible impact on the price of chicken to consumers and which was confirmed by Genesis Analytics, one of the most respected economic consultancies in the country.
Removing tariffs would not change that situation – a more likely outcome is a 33% increase in the already substantial profits importers make from dumped chicken from Brazil, the United States and the European Union. Those profits will increase anyway if a local shortage leads to increased import volumes.
The DA, like their importer friends, fails to make a distinction between general import tariffs and anti-dumping duties. They are not the same thing – anti-dumping duties are a corrective penalty, approved by the World Trade Organisation, to counter predatory trade practices such as unfairly low import prices aimed at grabbing market share and thus killing local jobs. South Africa is a signatory to the World Trade Organisation and anti-dumping efforts happen within their rules. Is the DA planning to withdraw from the World Trade Organisation?
The DA wants “fair competition” – anti-dumping duties aim to do exactly that by enabling local chicken producers to compete fairly with dumped imports. Scrapping those duties would have a devastating effect on local chicken farmers and their workers, but MacPherson’s hostile comments about South African poultry producers shows he couldn’t care.
South African poultry producers are facing a crisis because of the rapid spread of avian influenza. They need government support, they need approval to import vaccines against bird flu and they need compensation for the millions of chickens that have had to be killed to help prevent the spread of the disease.
They also need continued protection against unfair predatory trade like dumped chicken imports.
What they do not need is a political party seeking to destroy their business because of a mistaken belief that doing so will benefit consumers. For decades, local chicken producers have ensured that chicken is South Africa’s most abundant and most affordable meat protein. Consumers will benefit if this continues, but not if the local industry collapses and chicken prices are controlled by businesses in far distant countries who do not care a toss about South African consumers.
