Local industry disappointed with 13.9% increase in duty for EU poultry

© Ilyas Madiyev – 123RF.com

Marthinus Stander, CEO of Country Bird, says that the ITAC’s original essential facts letter agreed with the local industry’s claim of severe distortion and material damage to the market.

"This is a direct result of the huge volumes of dumped and unwanted bone-in chicken portions entering South Africa via the EU because of the unlimited access provided by the bilateral free trade agreement between the EU and SA," says Stander. "We know from bitter experience that the 37% most favoured nation tariff that applies to all countries except the EU barely stems the tide of imports, so it is absolutely baffling how ITAC believes that 13.9% could ever work."

Will not halt job losses

Chris Schutte, CEO of Astral Foods, says the duty applied is "ridiculous", will do nothing to halt the job losses facing the industry, and is tantamount to "spitting on the graves of poultry sector workers".

"It simply wasn't worth the considerable effort put in by the local poultry industry to protect businesses and jobs, and wasn't worth the time and effort expended by government either," says Schutte.

Scott Pitman, MD of Rainbow Foods Limited, says that while any assistance from government is gratefully accepted, the 13.9% tariff will be completely ineffective since it is way too low. However, he adds that tariffs and duties are no longer a solution for South Africa's poultry industry.

Valuing jobs, food security

"The reason for this is that exporters dumping leg quarters into South Africa have very few options open to them to dump it elsewhere, since the entire world has used technical barriers to protect their own poultry industries," says Pitman. "Therefore, they simply will lower their selling prices to South Africa by the extent of the tariff and take what they can get. This is an unfortunate reality in the poultry world these days, since other governments value jobs and food security more than South Africa seems to."

Schutte says that, compared with other countries' governments, South African legislators and policy makers are doing little to safeguard the agricultural sector and protect the nation's food security.

"It is disappointing when you see how other governments, like the US' recent AGOA interventions, work to protect their industries, create and maintain jobs in rural areas, and ensure their country's food security into the future," he says.

Uncontrolled subsidised dumping

Stander says even though President Zuma and Ministers Gordhan and Davies talk about collaboration between government and business, job creation, and industrialisation, as an objective of the DTI, ITAC’s disappointing "too little, too late" EU safeguard determination only further supports uncontrolled subsidised dumping of chicken portions into SA.

"As producers, our responsibility is to ensure a sustainable supply of quality and nutritious food at the reasonable prices - the right food at the right price," adds Astral's Schutte. "You cannot build food security on the back of imports, because when more lucrative markets present themselves, these imports dry up, leaving shelves bare and people without food."