There’s a tide of anger and frustration rising over Government’s failure to support the local chicken industry, allowing huge imports of cheap foreign poultry to devastate the sector and destroy tens of thousands of jobs, putting SA’s food security (chicken is our No 1 source of animal protein) at risk. Bruce Cohen reports on a campaign to defend the sector
Initial concerns about dumping focused on the impact of cheap American chicken imports as part of the Agoa trade deal between the two countries, but it’s now become clear that the No 1 culprit is in fact the European Union (EU).
Among the voices mobilising against the EU is the FairPlay Movement, established late last year (it’s patron is Judge Richard Goldstone) to campaign against predatory trade practices.
At the helm of FairPlay is Francois Baird, the former Africa head of the world’s largest PR group, Edelman.
Now based in the USA, Baird has been mobilising an international network of industry bodies and NGOs to expose dumping, and has his sights set firmly on EU chicken.
Baird says that despite their predatory activity,the EU has been in denial.”There has been no admission that what they have been doing has plunged the local chicken industry into crisis,” says Baird. “It has cost thousands of jobs and threatens many thousands more if dumping continues.
“There has also been no promise to stop this practice and no undertaking to support those rendered jobless by heartless EU actions. All there has been are half-truths and misleading statements designed to hide the facts.”
Dumping happens when countries export goods below the cost of production or below the normal selling price in their home country. This predatory practice is frowned upon and is consider ed immoral, if not illegal.
Local producers, however efficient (and South African producers are very efficient, as has ironically been proved by EU-based research, says FairPlay), cannot compete, eventually having no option but to shut down.
Baird says the EU has become a “serial evader” on the issue of chicken dumping, “It has no option but to concede that dumping has occurred in the past because three countries Germany, the Netherlands and the UK -were subjected to anti dumping measures in 2015 after being found guilty, But the EU will not concede that the practice has continued.”
FairPlay says EU consumers prefer chicken breasts and wings, and the left-over dark meat is dumped in foreign markets – often sent in frozen bulk, without a specific end consumer in mind.
It is these dumped leg quarters, 80% of which came from the EU in 2016, that have precipitated the crisis in the local industry.
Baird also accuses the EU of “grossly misleading” statements about the massive EU subsidies, which give its producers a huge advantage, particularly against farmers in developing countries.
Billions and billions of euros are spent on direct and indirect producer subsidies, which are the single largest item in the EU budget.
Says Baird: “Putting a stop to dumping, from the EU – or anywhere else- is required urgently if the South African chicken industry and the thousands of people whose jobs depend on it are not to suffer further constriction.
“The South African chicken industry needs to grow. It can only do so if it is not threatened by dumped imports.
The EU’s professions of concern for the South African industry would be a little more convincing if it would admit its role in the industry’s decline and the thousands of jobs that have been lost because of dumping.”
To give a voice to the thousands of chicken industry workers either axed or threatened with job losses, FairPlay recently launched a Cry for Action campaign.
It says that over the past six years, few industries, if any, have been as badly affected by retrenchment, closures and liquidations as has the poultry industry. It is not only central to SA’s food security, it is also a leading agricultural employer with 110 000 direct employees and as many as 20 000 indirect employees.
It points out that SA’s poultry industry has been proven by the world-renowned agricultural research institute at Wageningen University in the Netherlands to be one of the most competitive in the world. It is ranked number six and is a head of all European countries.
“So, when we talk about closures and liquidations, it is not because of uncompetitiveness due to bad management, ineptitude, poor strategic vision or laziness- it is because dumping is making it virtually impossible to survive”
In the long run, it is impossible to survive when all the rules of fair competition have been set aside and kicked into the long grass. And that suits the dumpers because no local survivors means a market with no competition.
“What the dumpers conveniently forget is that after an industry contracts once the production facilities are closed and the farms sold, the workers laid off – there is no way back.”
FairPlay has appealed to President Jacob Zuma and Trade and Industry Minister Rob Davies to intervene and “put an immediate stop to this abhorrent practice that is destroying individuals, families, entire communities and businesses that are key to SA’s economic and social well being”.
The organisation says its Cry for Action campaign aims to ensure that those people who have lost their jobs will not also lose their voices, their self esteem, their value, importance and significance to their families, communities and to society. They will not be set aside, abandoned, forgotten or made anonymous in the miserable pit of unemployment statistics.
“The Cry for Action appeal to Zuma and Davies is a cry from the heart of people who are suffering because of an activity that is unlawful, preventable, abhorrent.”
FairPlay founder Francois Baird says: “We are very hopeful that Zuma and Davies will respond urgently to our Cry for Actionand in so doing, bring a momentum of hope to the many people who are feeling abandoned.
“SA has one of the highest unemployment rates in the world and latest figures show it just keeps rising. Dumping is adding to the millions of South Africans already unemployed, creating Jobs in places like the EU, while killing jobs in SA.”
Adds Baird: “Dumping imports misery and SA simply cannot allow it to continue. Zuma and Davies can stop it, firmly and immediately, and we call on them to do just that.”
First published in Food & Beverage on 1st September 2017
By Bruce Cohen