South African Government intervenes to save the poultry industry
The South African government continues to deploy a number of interventions to support the poultry industry.
These include measures to boost competitiveness, value-addition and technology upgrading; trade measures; export support to assist the domestic industry to access foreign markets; industrial finance and incentives with conditions for improving competitiveness; and measures to promote growth and transformation of the poultry industry among others.
In this regard, a task team was established to work towards a comprehensive plan for the industry that will respond to the immediate threats facing the industry and longer-term measures to improve competitiveness and transformation of the industry.
The task Team comprises of representatives of government (Department of Trade & Industry; Department of Agriculture Forestry & Fisheries; Economic Development Department); the Industrial Development Corporation; private sector (SA Poultry Association; and one representative from a major poultry companies) and labour (Food & Allied Workers Union). To date, the dti and industry, SAPA, have commenced research work on the development of the Poultry Master Plan, which feeds in to the work of the Task Team.
Global poultry meat consumption is rising, with white breast meat preferred by the higher-income consumers, mostly in developed economies and brown meat being preferred in developing countries. This affects the global price patterns for poultry. In this regard, South Africa has experienced a rise in imports of bone-in chicken portion from a number of trading partners that puts pressure on the domestic industry.
There is a broad agreement that manufacturing-led growth is critical for high economic and employment growth and the poultry sector is critical to this effort. South Africa has adopted a developmental trade policy, which at its core is to support industrial policy. The role of the International Trade and Administration Commission (ITAC) is therefore critical to inform the level of tariff afforded to industry.
An industry that is experiencing challenges and seeks tariff protection is encouraged to apply to ITAC which will undertake an independent investigation and make recommendations as appropriate to the Minister of Trade and Industry in accordance with South Africa’s international commitments on trade. This relates to both tariff investigations and trade remedies.
To this effect, government has put in place a range of trade measures to avert the demise of the poultry industry. These include implementation of anti-dumping measures in cases where through the ITAC investigations, there is evidence that poultry products are dumped in our market.
Safeguard measures have been implemented in cases of a surge in imports that are causing a threat of serious disturbance in the South African market. Duties on imports on whole birds have been increased to 82%, the maximum duty allowed in accordance with our World Trade Organisation commitments. The current duty on bone-in chicken portions is 37%. In addition, Government has opened market access opportunities in the spirit of promoting export-led growth to a number of countries and regions, including the Gulf and EU.
All of these measures has assisted to give the industry the necessary protection. These have been done with major push backs from our trading partners given the rise in consumption of especially bone-in chicken portion in the South African market.
Furthermore, South Africa prioritises food safety and assesses the food safety risks associated with meat products (both locally produced and imported) on a regular basis through the Departments of Agriculture Forestry and Fisheries and Health. For locally produced meats, there are processes followed to ensure food safety. Meat products at the ports of entry are imported in line with the South African food safety requirements. Non-compliant products are rejected and either sent back to the country of origin or destroyed.
The poultry industry is an important sub-sector within South African agriculture. It provides the most affordable source of animal protein to the South African consumer, which makes it critical to food security.
Government remains committed to utilizing industrial and trade policy tools in order to address the competitiveness and sustainability of the poultry industry.