Illustration: KAREN MOOLMAN
Illustration: KAREN MOOLMAN

Much has been said about the state of SA’s poultry industry in X recent years, much of it heated. From a trade policy perspective, this has not been a bad thing.

The “chicken wars” have provided a clear case South Africans can relate to at many levels. Applying sometimes complex industrial and trade policy concepts to poultry has helped make them more accessible to the broader population. Imports have also helped in keeping chicken price changes largely in line with the consumer price index over recent years.


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However, the public debate has not always been factual. For example, the term “dumping” has often been used to create a sense that SA is being flooded by low-quality imported chicken. Yet for trade officials “dumping” is a technical term meaning that products are sold at a price that is lower than the cost of production. It can be a lengthy and complex process to make a determination of dumping in the legal sense. 

It is the role of the International Trade Administration Commission (Itac) to make determinations at the technical level about the impact of imported poultry in the SA market. The SA Poultry Association has not been shy about asking Itac to use all its available tools to restrict trade. A decision is expected soon on its latest application for the tariff on imported frozen chicken pieces to be increased to 82%.


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Requests for protection of local producers against imports are often motivated from the perspective of protecting jobs in the poultry industry. The figures themselves have been contested but a key weakness is often to view the industry from a narrow production perspective. Getting the chicken wings on your plate is not just about the broiler farms but includes many others in a complex supply chain. There are other farmers who produce the crops that go into the animal feed, the vets who keep the birds healthy, the processors that prepare and package the chicken pieces, logistics firms that store and distribute the product, and many others that support all these businesses. This is the case for both SA’s and imported poultry.

In addition, goods from another country also require support from freight forwarders and clearing agents involved in export and import. So, imports also account for jobs in SA — according to the industry body in excess of 12,000.

FTI Consulting (on behalf of the Association of Meat Importers and Exporters) recently presented an analysis that took a broader view of the economy-wide impact of the broiler industry. It modelled the impact of a requested tariff increase that is under consideration by Itac and found that, overall, there would be a net negative effect on employment. According to FTI, increasing the tariffs would actually see SA lose jobs at a time when we can least afford to do so.

An increased tariff on frozen chicken pieces will also hit consumers through higher prices on shop shelves. The local poultry industry simply does not produce enough to meet the demand from SA consumers. Protection against imports has not seen increased production from local companies, which has remained largely unchanged since 2008 around the level of 1.5-million to 1.6-million tons a year. At the same time, consumption has been slowly increasing, widening the gap between demand and supply.

The protection of the SA poultry industry has not resulted in growth of local production and it seems likely that this latest application for increased tariffs will generally do more harm than good. There are commercial opportunities for competitive businesses. For example, demand is there for mechanically deboned meat that is used in processed products. SA chicken farmers could also be thinking beyond our borders. There are opportunities to rethink the use of the “white” chicken meat that is not highly sought after in SA but is demanded in other markets. A reduction in the use of brining by SA producers could also open up export possibilities in neighbouring Southern African Developing Community countries.

These ideas are admittedly easier said than done. Their implementation will require stakeholders along the broader poultry value chain to work more closely together. There are shared objectives that could be pursued through greater levels of interaction and partnership. Increasing employment and keeping poultry prices accessible for the majority of SA consumers will benefit all players. The government and business can co-operate to address not only a level playing field for competition but in removing some of the barriers for growing exports of poultry, such as meeting the technical standards in potential markets.

The anti-import mindset also needs to shift to view competitors from countries such as Brazil as potential partners in the development of our agriculture sector. Chicken has been an irritation in this bilateral relationship (and others) but there is much SA could learn from the Brazilian experience. Taking a whole value-chain approach supports this suggestion as Brazil is also one of the most efficient producers of soya and other crops that are critical cost contributors to chicken feed. Global trade uncertainties could see shifts taking place in these supply chains that SA producers would benefit from understanding.

A more proactive approach in favour of co-operation could have widespread spin-offs for our economy as a whole. Co-operation on poultry could become a strength that reflects the special connection between SA and Brazil. Both countries are members of important global groups such as Ibsa, Brics and the Group of 20. Such connections with other emerging economies that share similar socioeconomic challenges are critical at a time when the multilateral system is under threat from unilateral action by large economies.

Trade wars may provide a chance for big players to flex their muscles, with scant regard to the consequences. SA is not in this league. The use of trade protection needs to be carefully considered, with particular attention placed on the impact on employment in the broader economy, food security and the disposable income of consumers.

Rather than applying tariff increases on chicken, it is time for the white flag to be waved by all sides so we can move forward in a new spirit of partnership and co-operation. This is more likely to achieve the intended impact of job creation and economic growth in the long term.

• Makokera is a director at Tutwa Consulting Group.