The dumping of chicken exports in South Africa from European Union member states reflects an ongoing pattern of the EU ignoring its own international development and cooperation objectives. During the past decade, the EU has all but destroyed the livelihoods of rural communities that depend on poultry farming in Senegal, Cameroon and Ghana, and now seeks to do the same in South Africa.
The South African chicken industry is in crisis because of the import of massive volumes of surplus chicken that is being dumped into South Africa. Thousands of jobs have already been lost, and many thousands more are threatened, as larger producers cut production and smaller ones go out of business. There have been warnings that the industry might not survive for another 12 to 18 months if imports continue at the current rate.
The damage to the South African chicken industry is principally caused by the import, mainly from the EU, of rapidly increasing volumes of bone-in leg quarters. These are the brown meat portions popular in South Africa but unwanted in Europe and other northern hemisphere markets. So they are dumped in South Africa. Bone-in imports from the EU rose from 62,000 tons in 2011 to 194,000 tons by the end of 2016. This made imports the largest single supply source in South Africa, exceeding the largest local producers. EU imports dropped off when supply was halted by outbreaks of bird flu, but other regions have taken up the slack.
South African consumers, however, do not benefit from these cheap imports. That bonus goes to importers and middlemen. Repackaged chicken is sold at just below the prevailing price, taking market share and preventing local producers from recovering rising input costs. That has led to industry contraction and crisis, with one large producer warning that the industry may not last another year in its current form if dumping continues.
A state-of-the-art industry that creates jobs for more than 100,000 people is being devastated. The poultry industry represents the largest component of the country’s agriculture sector, contributing some 18 percent of agricultural gross domestic product in 2016, and 39 percent of animal product gross value.
And there are other impacts as well. The grain industry, which employs about 20,000, is threatened if the market for chicken feed disappears. Further, dumping undermines South Africa’s food security, impedes rural development in areas where unemployment exceeds 25 percent and has a significant impact on the national economy.
But, an alliance of farm workers, the South Africa Poultry Association and chicken producers of South Africa, is fighting back through the FairPlay campaign. Farm workers have marched en masse to the EU offices in South Africa. There is an active social media campaign. Members of Parliament have been engaged. There is broad media coverage of the issue.
The FairPlay advocacy and anti-dumping movement promoting the rule of law in trade through advocacy, not only in South Africa but globally, wherever jobs are lost or at risk due to dumped imports. In South Africa, we are urging the government to protect the chicken industry and the livelihoods of the tens of thousands of economically vulnerable South Africans it employs by taking measures to stop dumping.
During the next five years the EU has committed to spend about 81 billion euros ($94.75 billion) through its international cooperation and development agenda, with a focus on rural areas and agriculture. “The EU believes that to reduce poverty and hunger and promote inclusive growth, substantial investment in rural areas and in agriculture is needed. Most poor and undernourished people live in rural areas, where small-scale farming forms the backbone of the economy,” according to the EU Commission website.
In 2006, the EU commissioned a Sustainability Impact Assessment of the negotiations of Economic Partnership Agreements between the EU and the Africa, Caribbean and Pacific Group of States.
The EU’s sustainability impact assessment report asserted that the aim of its EPAs in developing countries is “to promote sustainable development and poverty alleviation.” The report noted that the purpose of this sustainability impact assessment was “ to help ensure that the trade and development fostered by the EPAs support economic, social and environmental sustainability.”
The sustainability impact assessment specifically called out concerns related to the agrifood sector in general and made specific reference to poultry farming in particular, noting the potential for “damage to local production that could disproportionately threaten the livelihoods and food security of rural populations.”
There is clear evidence of the “damage” among other EPA partner countries, and now in South Africa. But rather than seek to help alleviate the potential for further damage to the agrifood sector, the EU attempts to bully South Africa and any other EPA partner countries that seek to protect their own rural populations by pushing back against the dumping of chicken exports by EU countries.
By Chris Ward 17 August 2017
First published in Devex.com on 17 August 2017
https://www.devex.com/news/opinion-south-africa-s-chicken-industry-may-not-survive-beyond-2018-90825
About the author
Chris Ward is a Canadian-based associate of Baird’s CMC and is active in the FairPlay Movement. FairPlay is an international advocacy movement that promotes the rule of law in trade through advocacy, not only in South Africa but globally, wherever jobs are lost and sensitive industries at risk due to dumped imports. Previously Chris was government house leader and minister of education in Ontario, Canada. Farm workers in South Africa now have the ear of the government of South Africa, but to succeed they need the support of the international development community, particularly from those based in EU countries, which is the source dumping of poultry products into low- and middle-income countries.
