Media Release

No Longer Business as Usual

Unless South Africa is prepared to accept a future where chicken become a luxury foodstuff, it cannot be business as usual in the face of the unprecedented avian flu (Highly Pathogenic Avian Influenza, HPAI) that is currently decimating our poultry industry.

This is the view of Fred Hume, managing director of Hume International, an import/export company based in Port Elizabeth.

Despite the announcement by the Trade and Industry minister Ebrahim Patel today (Tuesday) that they are considering a temporary rebate on import duties, Hume believes that long-drawn-out commissions and investigations hamper the flow of trade.

“Our government needs to have more flexible policies when threats face the poultry industry,” he said, “and they must make it possible to open markets and adjust tariffs much faster and with less red tape. Avian flu is here to stay, and so we need to look at bio-security in a whole new light.”

Poultry Industry is Disingenuous

“The South African poultry industry is disingenuous when it comes to imports,” said Paul Matthew of AMIE. “They were quoted this week as saying that importers had reacted to the outbreak by importing more chicken, and that imports could be as much as 50 000 tonnes per month. I really don’t know where they get these figures from, because the latest import statistics show that last month’s bone-in poultry imports were around 3 000 tonnes.”

“When discussing imports, it is always important to draw a distinction between bone-in chicken (leg quarters and wings) and mechanically deboned meat (MDM – the main ingredient of processed meats such as polony) which is entirely imported as it is not manufactured in this country. The South African Poultry Industry consistently conflates the two in order to make the volume of imports look higher.”

Cutting Back on Production

“It is also extremely unrealistic to think that the world is waiting to assist South Africa with cheap poultry.  Our local food service businesses have specific requirements and approval processes that take time to be negotiated and these cannot be substituted with imports overnight.  World-wide, producers are cutting back on production.  Additionally, our authorities are slow to open markets after avian flu outbreaks with stifled negotiations.  And the ultimate reality is that imported chicken is no longer affordable because of the depreciating rand and increased duties.”

The Democratic Alliance has called for a suspension of punitive tariffs on poultry, citing the unprecedented avian flu outbreak as a national threat to food security.

Producers Under Pressure for Loadshedding

“Food producers are already under pressure from load-shedding,” said Dean Macpherson, DA Shadow Minister for Trade, Industry and Competition, in a statement.

“Millions of chickens have already been culled which has led to substantial losses for producers, but has also led to consumer shortages. There is already a shortage of eggs, and we are likely to see a reduced supply of poultry meat in the coming months.”

“The Department (of Trade, Industry and Competition) and specifically the minister has maintained tariffs aimed at protecting large domestic poultry producers, as a measure to bolster local industries. Yet this approach has limited competition and kept prices high. If tariffs were lifted, this could see a price reduction of up to 33%.”

More Nimble Approach

According to Hume, the South African government needs to adopt a much more nimble approach to local production and international trade.

“This is urgent. We need to work out – everyone in the industry – how to meet and mitigate the shocks to food security in South Africa. There should not be annual cycles, or long-term investigations and reports. When our local industries are in trouble, we must open up to imports. And when our local industries recover, we can go back to supporting local production.”

“The Poultry Master Plan must be relooked and reworked. It is imperative that duties are automatically suspended for a period of at least six months in the event of more than, for example, X million birds being culled as a result of HPAI, and this needs to be recorded in the Master Plan. We cannot afford to negotiate temporary suspensions on what may soon be an annual basis considering the frequency of outbreaks of HPAI around the world,” he said.

“That is the only sustainable way to keep prices low and protect our economy from shocks such as avian flu,” says Macpherson. “We must ensure that food security and affordability for all South Africans are at the heart of our trade policies.”

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