Statement by Francois Baird, founder of the FairPlay movement. Wednesday 6 March 2024
The decision to approve tariff rebates on thousands of tonnes of chicken imports is unbelievable and must be reversed.
There can be no credible reasons to justify approving these permits, which will result in a new flow of unwanted and unnecessary chicken imports, putting further pressure on the distressed local poultry industry.
When Trade, Industry and Competition minister Ebrahim Patel ordered an investigation into the possibility of import tariff rebates last October, he directed that any rebates should be “for the duration of the shortage of chicken as a result of an outbreak of highly pathogenic avian Influenza (HPAI) in South Africa”.
The country’s trade regulator, the International Trade Administration Commission (ITAC) duly included these conditions in the guidelines it issued when it announced the rebate scheme earlier this year.
That means that rebates can be approved only if there is a shortage of chicken on the South African market, and then only if that shortage is caused by an outbreak of avian influenza (bird flu). Both conditions are necessary and information from producers indicates that neither applies at the moment.
In fact, the SA Poultry Association (SAPA) assures us that there is currently a surplus of chicken after producers imported more than 150 million hatching eggs to assure supply despite the culling of millions of chickens last year because of bird flu outbreaks. Production has recovered to normal levels of 21.5 million chickens a week, SAPA says.
ITAC disagrees, and stands by its projection made last December that there would be a shortage of 172 000 tonnes of chicken in South Africa in 2024. It has accordingly issued 65 permits to import 43 000 tonnes of chicken in the first quarter of the year, and may renew that for a further 43 000 tonnes in the second quarter.
This is nonsense. If there were a shortage, chicken prices would be skyrocketing. In fact they started dropping as usual in January after the December peak.
Despite this current reality, applications to import huge volumes of chicken have been approved. Why, when it is not in the national interest? Political interference from Patel and his officials will immediately be suspected.
This is an election year, and the government will claim it is acting in consumers’ interests, despite the fact that no importers have publicly committed to passing on the savings from lower import tariffs. ITAC is supposedly independent, even though it is part of Patel’s empire, but its imperviousness to pressure from above will be questioned.
The losers will be South Africa’s struggling poultry producers, with no benefit to consumers. Chicken farmers are recovering slowly after suffering huge losses last year because of bird flu, rising feed costs, electricity shortages and other infrastructure failures.
What they do not need is a government-sponsored new flood of chicken imports that will cost them revenue and market share, and put their recovery at risk. Patel has put businesses and jobs in danger.
FairPlay hopes there will be a legal challenge to these rebates approvals, for which there can be no justification in terms of the rules the government itself has set. If ITAC cannot persuade a court of law that there is a shortage of chicken, the rebate permits stand to be nullified.
That, in turn, would confirm interference in administrative decisions to benefit politicians at huge cost to the country’s chicken farmers and rural jobs.
Instead of supporting chicken jobs for foreign poultry producers, the government should do everything possible to support local poultry farmers to produce the best, cheapest chicken possible in South Africa for all South Africans. This will add local rural jobs, and help poor people to eat chicken for a healthier South Africa.
