LETTER: FairPlay’s focus on poultry imports oversimplifies the issues
It is time to debunk tariff and dumping myths once again
It is regrettable that FairPlay’s Francois Baird chose to write a letter based on a personal attack instead of dealing with the facts (“No, exports won’t save the poultry sector”, February 1). The two perennial issues raised every year by large poultry producers are tariffs (raising tariffs on imports), which they say are necessary to prevent “dumping” (imports of unwanted chicken below the production cost).
Tariffs are a controversial matter, as always when livelihoods are pitted against profits. We have never suggested that flooding the SA market with imports would “save” the poultry industry. However, we believe targeting imports as the culprit for the problems in the domestic industry is oversimplifying the issue.
Perhaps it is time to debunk these tariff and dumping myths once again:
Anti-dumping tariffs were introduced in 2000 to combat dumping.
There has been no dumping since 2015.
Chicken import volumes for 2020 are 19% lower than the previous year.
Chicken imports over the past three years have been on a decline: down 16% in 2018/2019, and overall imports are 32% down over the past three years.
The price of chicken has increased by about 7% year on year since 2015.
One of the poultry mega-producers posted profits of up to R1.4bn last year.
Smaller chicken producers are still struggling to access the market as they are shut out by the larger producers.
I am not the only one who shares this truth. The Emerging Black Importers and Exporters of SA and SA National Consumer Union share a similar sentiment to ours about anti-dumping claims. Statistics bear this out: the chicken and egg prices in the average food basket have risen more than 10% in the past year.
According to the chief agricultural economist at the National Agricultural Marketing Council, Dr Sifiso Ntombela, this was due to a weakened exchange rate and the new poultry import tariffs introduced last March. And further price rises are imminent, especially if higher tariffs are approved.
The importance of competition in the SA market cannot be overstated. It is critical to keeping the price of chicken in check for cash-strapped consumers. Without it, domestic producers are able to do what they will with the price of poultry.
As CEO of the Association of Meat Importers and Exporters I have been leading the organisation into our five-year strategy that seeks to balance imports with exports in the poultry industry, to make the industry more diverse and representative. We are forming a number of crucial partnerships that would make poultry exports more feasible than they now are, by removing impediments to newcomers. These are key objectives of the poultry master plan that was implemented by ministers Ebrahim Patel and Thoko Didiza in 2019.
There are a number of domestic obstacles before SA can export our poultry products but something that is important to consider is the difficulty SA will have in exporting to nations such as the countries in the EU when trading partners are continuously challenged by trade barriers. Trade barriers are detrimental and decrease overall economic efficiency. International trade is economically enriching yet when trade barriers are implemented, such as anti-dumping duties and tariff increases, they can prevent other countries from wanting to accept our export product.
SA has an inherent trading culture and we know that trade is reciprocal. However, calling for excessive protection will exclude SA from the trading world because we will not be a favourable country to trade with.
Either way, imports and exports are a process, not a product. We need to engage constructively with the poultry industry to enable emerging farmers and new players to grow the supply, rather than shut out the competition. It is salutary to note that the pork and beef industries in SA don’t call for tariff protection. What are they getting right that the poultry industry is getting wrong?
It is my belief that the poultry industry is heading in the direction of protectionism and monopoly, which will be a blow to consumers and new entrants to the industry.
Association of Meat Importers and Exporters
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