Chicken Industry

Unfair Trade –State Sponsorship of Brazil’s Poultry Industry

In a comprehensive report, a prominent civil society organization in Brazil: Reporter Brasil- Organization for Communication and Social Projects calls out Brazil’s poultry industry and how “it grinds the rights of farmers and workers throughout the country.”

The report reveals how “participation of the Brazilian State was decisive” in allowing just two Brazilian companies to dominate the global poultry trade.

The two companies, JBS and BRF account for 70 percent of Brazil’s chicken exports. JBS made headlines around the world last year for its role in Brazil’s tainted meat scandal.

The Reporter Brasil study reveals that BRF was created less than a decade ago when a merger between a failing Brazilian poultry producers and its main rival was facilitated by “a transaction sponsored by pension funds from state enterprises and the National Bank for Economic and Social Development (BNDES) which acquired the new company’s shares.”

“JBS had also received equity investments and major loans from BNDES in the past decade, and those funds were largely used to purchase companies in the poultry industry. The bank currently holds 24% of the company’s shares.”

A major European NGO, The Institute for Agricultural Trade Policy (IATP) has also published a comprehensive report , The Rise of Big Meat- Brazil’s Extractive Industry.

The IATP report highlights how Brazil’s major poultry exporters have “received large volumes of resources, not only through subsidized loans, but also through the purchasing of debentures and company shares” by state financial institutions.

The IATP report recommends “Eliminating all public forms of subsidies for agribusiness corporations and remove the state as a shareholder of their capital.”

FairPlay believes that fair trade requires a level playing field. South Africa’s poultry industry faces unfair competition from Brazil as a result of direct financial state support of their Brazil’s exporting poultry companies .South Africa must act to protect its poultry industry from Brazil’s state-sponsored abuse of its dominant role in the global poultry trade.