TRALAC - Trade Law Centre

'Poultry crowd rubs salt in own wounds'

Tuesday, 29 March 2016 Published: | DAVID WOLPERT,

Source: Business Day (South Africa)

Last year, South Africa was in a panic about a threat by the US not to renew the African Growth and Opportunity Act (Agoa), and we all breathed a sigh of relief when Trade and Industry Minister Rob Davies brokered a deal between the local and US poultry industries. The arrival of the first shipment of US poultry on our shores weeks ago should have been the closing scene to the Agoa-chicken saga.

But smarting from the deal, which saw SA lifting antidumping duties on US bone-in chicken and US President Barack Obama renewing our Agoa status, domestic poultry refuses to give up.

Having lost the argument with the US, they are spreading innuendo and fabrications about the quality and safety of imported chicken.

Yet all chicken imported to SA must pass strict South African food safety and veterinary standards. No bacteria-infected chicken will be allowed into the country.

Imported chicken is unbrined, unlike its domestic counterpart, which is swimming in salt water, and all imports are subject to compulsory veterinary testing, whereas local product operates on a voluntary testing basis.

Moreover, the compromises in terms of the Agoa deal have secured tens of thousands of South African jobs, and grant local businesses continued access to US markets. When you add these benefits to a supply of quality, competitively priced chicken to our shelves, it is nothing short of a victory for consumers.

One could almost understand these rhetorical tactics as a human response to a loss. And yet, not content with licking its wounds, local poultry has decided to fight back harder. Despite food prices continuing to rise due to a weakened rand and savage drought, and consumers being hard-pressed to put food on the table, local poultry is forging ahead with more desperate protectionism.

In 2004, the European Union (EU) and SA concluded a trade, development and co-operation agreement. Since 2012, this has seen EU poultry arrive in SA with no import tariffs, which has been helpful in keeping the price of these products lower for consumers. But this could soon change drastically.

The South African Poultry Association is trying to get the South African International Trade Administration Commission to institute an agricultural safeguard on EU chicken. An agricultural safeguard is not dissimilar in effect to the antidumping duty that is no longer imposed on US bone-in chicken, except that it operates in three-year cycles. The association is essentially looking to institute protectionist action in the form of a 37% import tariff on EU bone-in chicken.

Consumers can expect an increase of between 25% and 37% within months, which would come as a shock to them, but not to those familiar with the local poultry industry. For them, it is just more of the same: blaming imports for their woes and making false claims about the quality of imported meat.

They often skirt over the fact that it is South African producers that have been injecting their own product with ridiculous levels of salt water to plump it up.

Brining cons consumers, compromises their health and is foreign to the EU, yet continues unregulated in domestic industry.

If there were any uncertainty about the local poultry industry’s intentions over the Agoa-US chicken saga, they are now confirmed by its latest actions over EU chicken. Such efforts to institute tariffs on imported meat from the EU will directly compound existing economic pressures on SA’s poorest consumers.

The role of local industry should be to adopt policies and practices that protect consumers. Instead, its relentless pursuit of protectionist practices comes at the expense of poor consumers. Instead of once again scurrying to the authorities for protection to be financed by the poor, perhaps they should interrogate their own business models to get to the heart of their problems.

• Wolpert is CEO of the Association of Meat Importers and Exporters SA

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