The South Africa Poultry Association (SAPA) believes the government could help create an additional 30,000 jobs by providing support, including better managing the flood of cheap chicken imports from the European Union (EU) and Brazil.
The poultry industry currently employs 130,000 people in the region, however, that number is down from previous years. South African poultry industry and unions blame this on the EU and Brazil selling their products under cost, Business Day reported.
Producers in the EU and the South American country argue that they are more price competitive than what South Africa is. This has led SAPA to call on the International Trade Commission to increase the ad valorem tax on all frozen chicken to 82 percent. This is a more than 40 percent increase in some cases.
According to the Business Day report, “Izaak Breitenbach, the newly appointed SAPA general manager, recently said the biggest challenge at the end of 2018 that was facing the broiler industry was, 'the impact that dumping has had on the sector.'”
“Producers in Brazil, for instance, have financial incentives to export and there is great concern over the traceability of certain imports that are repackaged in SA, since some importers flout the legal requirements,” he said in the report. The poultry industry is vastly competitive internationally hence his concern with it being influenced or managed to sway in favor of one country.
“Chicken prices are established by the price of individual portions, but due to phytosanitary restrictions preventing South African producers from exporting, they are unable to participate in the lucrative EU and US markets for white breast meat, which would in turn allow them to subsidize their own ‘brown’ meat, as happens in other countries,” he said in the Business Day report.
This makes it more difficult for small countries to compete with larger countries, he explained.
Victor Adjei, Chairman of the Ghana Poultry Association recently visited South Africa as a guest of the FairPlay anti-dumping movement and the South Africa Poultry Association to share Ghana’s experience with media and chicken industry stakeholders in hopes of SA avoiding the same experience.
South Africa conditions, not in producers favor
South Africa’s climate isn’t necessarily the most conducive for producing poultry, as drought impacts unfavorable feed and grain cost which consequently influences bird cost.
Breitenbach solution
Breitenbach is in favor of a plan that would, “place chicken on a growth trajectory, to benefit the economy through job creation and additional tax generation.”
He explained that improvements have already been made but that a macroeconomic environment managed successfully could increase the South African poultry sector by 30 percent of 30,000 jobs.
Previous South Africa claims against the EU
A 2017 report explained that increasing imports of poultry meat, particularly from the EU, were being blamed in South Africa for the decline in the domestic poultry sector.
An August 2017 report form Business Day called on the South African government to take action against what it describes as “dumping” of “huge volumes” of chicken leg quarters by the EU. The South African Poultry Association (SAPA) has undertaken to launch action against EU countries that it alleges are behind the unfair trade.
Other South Africa tariffs in the news
In September, U.S. Sens. Chris Coons (D-Del.), Johnny Isakson (R-Ga.), and Roger Wicker (R-Miss.) sent a letter urging Secretary of Commerce Wilbur Ross to grant South Africa an exemption from President Trump’s Section 232 tariffs on steel and aluminum. In the letter, the senators warned Ross of the impacts of the tariffs on U.S. poultry producers and their access to the South African mark
