Local poultry industry shocked by import discount

Henry

The South African Poultry Association (Sapa) says there is no rational argument for introducing a rebate on imported boneless chicken and chicken on the bone – especially not because there was no shortage of poultry meat over the festive period.

“There is no shortage of chicken supply in the country,” says Sapa.

“The industry has successfully imported broilers to fill any gap in supply and together with the industry’s numerous production contingency plans and available chicken stocks, any shortage of chicken has been averted.”

Sapa says it is shocked by the government’s decision to introduce this rebate. The move will apparently keep the price of chicken under control for consumers, especially for poor households.

However, the association argues that this could have harmful consequences for the local industry and ultimately for consumers.

“The implementation of a rebate and any permits issued pursuant to it will be the most damaging action for a poultry industry that is already on its knees.”

According to the association, the South African poultry industry is a strategic national asset worth R60 billion. It is also the second largest agricultural sector in the country, and the largest source of employment.

“For every job opportunity created in the poultry industry, another job is created throughout the value chain,” says the association.

“The implementation of rebates simply works against the trade measures introduced in terms of the poultry sector master plan, and according to which the local industry has made massive investments in production capacity. This will only serve to jeopardize further employment opportunities, while South Africa’s food security may be threatened.”

In the past few months, the industry has struggled to keep its head above water due to a massive outbreak of bird flu in South Africa. Although at one stage there were slight shortages of eggs in some parts of the country, Sapa maintains that the industry has always been able to manage chicken shortages.

Sapa also made it clear during discussions with the Minister of Trade, Industry and Competition, Ebrahim Patel, how any shortages would be averted.

“We would be appalled if the government even considered applications, let alone approved permits for poultry imports under the rebates. This move will sacrifice one of the few agricultural industries that is globally competitive.”

The association argues that the South African market does not need poultry imports to prevent any potential shortage of chicken.

“We have already proven that the local industry does have tangible contingency plans in place. The proof is in the supply of locally produced chicken to the South African market, without any shortages.”

The government recently published protocols for vaccination against bird flu and Sapa says the industry will continue to engage positively with the relevant authorities with the aim of vaccinating broilers.

“This will also prevent any possible shortages and the rebate will simply become a non-event and hopefully not a tool for unscrupulous importers to abuse.”

The Association of Meat Importers and Exporters (Amie) earlier welcomed the rebate and said it was good news for consumers, who are currently the hardest hit by excise duty.

Last year, Amie made a presentation to the Commission for International Trade Administration (Itac), in which he asked that a rebate be introduced on imported chicken. Excise duty on imported chicken currently amounts to 62% for frozen chicken on the bone, and 42% for boneless chicken pieces.

Amie said he hopes the department recognizes the importance of the step for consumers and that it makes the process run smoothly to “get rid of any bureaucratic red tape” when importers submit applications.

However, Sapa is concerned that the rebates will become a means by which not only consumers, but also the local industry can be exploited.