The South African poultry industry has advised the government that there is no need to continue the tariff rebates on chicken imports, and that doing so would be illegal.
The import tariff rebates are designed to encourage additional chicken imports if bird flu results in a supply shortage. They were in place for the first three months of the year, despite the poultry industry stating that there was no shortage. The government is considering whether to renew them for a further three months, from April to June 2024.
Now the poultry industry has given government a detailed report showing there was and is no shortage to justify tariff rebates – in fact there is a surplus of local chicken supply.
The SA Poultry Association (SAPA) provided the report to two government entities – the International Trade Administration Commission (ITAC), which administers the rebates, and the Department of Agriculture, Land Reform and Rural Development (DALRRD) which must certify any shortage of chicken supply.
“The report clearly indicates that domestic production has recovered from the HPAI (bird flu) outbreak and is able to meet – and is exceeding – domestic demand,” SAPA said through its legal advisers, Webber Wentzel.
There was also clearly no shortage of the chicken products to which the rebates may be applied – mainly bone-in and boneless cuts and offal products such as chicken livers and feet – let alone a shortage corresponding to the quota of 48 000 tonnes per quarter which ITAC had set.
“There is thus no justification for the retention of the rebates,” the report stated.
SAPA also referred to the guidelines for the application of import tariff rebates. These included provisions that rebates may be discontinued if domestic production has satisfactorily recovered from the impact of bird flu, and if domestic production is sufficient to meet current or anticipated demand for the specified chicken products.
“The current situation thus falls squarely within the circumstances in which the Guideline contemplate that the issuing of rebate permits is to be discontinued,” the government was told.
Moreover, the rebate provisions stipulated that the rebates were to remain in force only “for the duration of a shortage of chicken as a result of an outbreak of [bird flu] in South Africa”.
“Given that there is currently no such shortage, it would thus be unlawful for the rebates to remain in place.
“SAPA thus contends that there is no basis for the rebates, and that they should be discontinued.”
SAPA provided detailed statistics on broiler chicken production so far this year, and the projected supply for the coming months. Its information countered the basis on which rebates were approved – ITAC’s estimate last year that there would be a shortage of 172 000 tonnes of chicken in 2024.
These included:
- The total number of broilers slaughtered in March 2024 exceeded the average of the monthly slaughter numbers for the period October 2022 to September 2023 and this is forecast to continue in April 2024;
- The number of broilers forecast to be slaughtered in the period May 2024 to July 2024 is expected to exceed the average of the monthly slaughter numbers for the period October 2022 to September 2023, even if no further fertilised broiler eggs are imported; and
- The number of broilers slaughtered in the period from January to March 2024 was higher than over the same period in each of the preceding three years, and was 6.22% higher than the same period in 2023.
SAPA also stated that the 2023 bird flu outbreak had not led to an increase in domestic prices of the chicken products subject to tariff rebates.
