South Africa’s poultry industry is in a crisis and urgent intervention is needed to stabilise the sector, said South African Poultry Association (Sapa) CEO Kevin Lovell, during a round table discussion with industry heads.
The meeting took place on Thursday March 23, ahead of a public hearing by the Department of Trade and Industry (dti) at Parliament.
Mr Lovell said they were not against importing but the EU had been allowed to “dump” their chicken in South Africa – this is parts of a whole chicken which is not consumed overseas.
“The EU exported 19.26 percent of its poultry to South Africa in 2016. There are currently more than 1 200 importers to South Africa,” he said.
Chicken dumping refers to the export of the product at a price that is lower than the price charged in its home market, or below its cost of production. Consumers in Europe and America prefer to eat chicken breasts and wings – the surplus (drums and thighs) is sold to South Africa, at any price the exporters can get, as they have already made a profit on the sale of the “white meat”.
The FairPlay Movement, an independent non-profit initiative, was founded to address the crisis in the chicken industry and stop chicken dumping. According to FairPlay, South Africa is being targeted for dumping as it is one of the few countries that allows virtually unrestricted chicken importation.
As per the 2016 renewal of the African Growth and Opportunity Act (AGOA) trade agreement with America, they are allowed to export 65 000 tons of bone-in chicken pieces a year to South Africa, free of anti-dumping duties.
FairPlayspokesmanAshoek Adhikari said poor people in South Africa were picking up the tab for dumping in terms of health and job security.
According to Sapa, 12 chicken producers were liquidated, closed or sold between 2011 and 2016, while 4 000 to 5 000 jobs were lost, with thousands more expected to be out of work in 2017.
Astral CEO Chris Schutte questioned why importers did not have to subscribe to the Consumer Protection Act. He said local producers had to ensure their products had the correct labels showing when and where they were produced, the expiry date and whether it was halaal.
“We have a lot of regulations that we need to abide by, but when it comes to imports the product simply says made in the US,” he said.
Mr Schutte said there was usually a spike in imports during October and November and they have had to lay-off people to make up for the drop in the market.
Professor Mohammed Karaan, the dean of the AgriScience faculty at Stellenbosch University, said this was the biggest crisis he had seen in the agriculture sector in the past 20 years and it would take community activism to solve.
“We need to get the message out there to the media and go to the streets – this seems to be the only way in which we will get a response. All role-players in the sector need to come together and take action,” he said.
Mr Karaan said it was not a question of how competitive the country was but one of national interest.
Country Bird Holdings CEO Marthinus Stander said South Africa needed an enabling environment where small poultry farmers could survive and that it was not just about the “big players”.
He said they were finding it easier to expand in Africa.