FairPlay’s Francois Baird has hit back at suggestions for reviews of all tariffs on imported poultry, both anti-dumping duties and general import tariffs.
“Every country in the world uses tariffs to create a level, competitive playing field,” he said in an article in Business Day.
Baird also noted that removing tariffs would not make chicken cheaper for South African consumers.
“Imported chicken sells at, or just below, the local price and not at its landed cost because the importers use the local price as their reference price. Importers buy low, sell high and pocket fat profits by driving South African producers out of business.”
Baird was responding to suggestions in a Business Day article from David Wolpert, a former CEO of the Association of Meat Importers and Exporters (AMIE). Writing in his personal capacity from retirement in Australia, Wolpert said there was a danger that tariff protections could remain in place after import duties had achieved their objective.
“Protection may sometimes be necessary to help an industry reach a competitive position. The danger arises when protection gradually becomes regarded as permanent,” he said.
As AMIE has done, Wolpert questioned the continuation of general import tariffs on poultry. These tariffs, which are separate from and in addition to anti-dumping duties, include a 62% tariff on imports of bone-in chicken such as leg quarters.
Wolpert also raised the issue of anti-dumping duties, a corrective measure applied under World Trade Organisation (WTO) rules to counter imports at unfairly low prices. While supporting “legitimate” anti-dumping duties, Wolpert suggested there should be an additional question in future renewal applications: what has changed since the previous application.
“How much more competitive has the domestic industry become, and what measurable benefit is the South African consumer receiving?”
Baid said that South Africa’s poultry farmers had excelled, despite multiple challenges.
“They ensure a constant supply of the second most affordable chicken in the world, to South Africans in South Africa.”
Challenges faced by South African poultry producers included unreliable, expensive electricity and water, a tattered transport infrastructure, a R9 billion bird flu culling blow, for which the SA government still refuses to compensate chicken farmers despite requirements to do so, and the Covid pandemic.
Baird said the quickest way to cut the price of chicken for low-income consumers would be to scrap the 15% VAT on chicken.
“Remove the tax and the price falls immediately.”
FairPlay had been campaigning for VAT-free chicken since 2018. Producers and importers already supported the proposal.
“Cheaper chicken means more volume, more production and more jobs, feed, processing and distribution. Phase 2 of the master plan seeks increased affordability for low-income households. Zero-rating will deliver it tomorrow if implemented,” Baird contented.
