From the Desk

The Poultry Bulletin - - CONTENTS -

Im­ports, ex­ports, old, new, and all things avian

The brief pe­riod of bet­ter con­di­tions for broiler pro­duc­ers has passed, with high lev­els of im­ports - the high­est ever on a Jan­uary to May ba­sis - and a flat econ­omy lead­ing to price falls, stock build ups and much gnash­ing of teeth. For egg pro­duc­ers, there seems to be a bit of a short­age in some ar­eas, which will hope­fully as­sist those not af­fected by dis­ease and the like as the egg in­dus­try hasn’t had the lux­ury of the bet­ter times broiler pro­duc­ers have had.

The maize price rise seems guar­an­teed for the rest of this year, and the lat­est pre­dic­tions on El Nino aren’t favourable for the com­ing sea­son. It’s a lit­tle early to panic, but the pos­si­bil­ity of another poor har­vest shouldn’t be dis­counted.

New Or­gan­i­sa­tions

As at the time of writ­ing this let­ter, SARS still hasn’t ap­proved the new SAPA con­sti­tu­tion, mean­ing the ‘old’ SAPA con­tin­ues. In the mean­time, we’ve met with our au­di­tors to make sure we’re all agreed as to how to make the tran­si­tion from an ac­count­ing per­spec­tive - when­ever that should hap­pen.

We’ll meet with the two new Com­mit­tees in Au­gust to try to es­tab­lish bud­gets, work­ing groups, etc. so that when we do get the SARS ap­proval, it’ll be pos­si­ble to bring the new model into ef­fect sim­ply by elec­tronic res­o­lu­tion if need be. Should we be lucky enough to re­ceive the SARS ap­proval be­fore 18 Au­gust, then this’ll be the date of the first meet­ings of the new Com­mit­tees.

The nor­mal Man­age­ment Com­mit­tee meet­ing will take place on 19 Au­gust. This may also be­come a new SAPA Board meet­ing if SARS ap­proves the con­sti­tu­tion be­fore­hand. In essence, we’re do­ing all we can to speed up the process of change and start with the new SAPA.

I don’t think we should un­der­es­ti­mate the task ahead of us to re­con­fig­ure the or­gan­i­sa­tion to be ‘prod­uct’ fo­cussed rather than ‘type of pro­ducer’ fo­cussed. Ex­cit­ing times in my view.

SAPA Strat­egy

The Man­age­ment Com­mit­tee de­lib­er­ated on the in­ter­views it held at the end of June and de­cided to ap­point Louisa Nel to the re­vised Ad­min­is­tra­tion Ser­vices Of­fi­cer po­si­tion. Christo­pher Ma­son was also ap­pointed to the po­si­tion of Man­ager: Sus­tain­abil­ity and De­vel­op­ment. The po­si­tion of Se­nior Ex­ec­u­tive was not filled from the pool of in­ter­nal can­di­dates and the post has been ad­ver­tised ex­ter­nally, with the in­ten­tion that in­ter­views for this post and that of the Di­rec­tor of the PDMA can be held on 19 Au­gust af­ter the Man­age­ment Com­mit­tee meet­ing.

SAPA now has a struc­ture with eight di­rect em­ploy­ees - down from 16 at the peak. Some of the work pre­vi­ously done by em­ploy­ees is now out­sourced but there is also a real re­fin­ing of our pur­pose and cost base.

The out­come of the Man­age­ment Com­mit­tee de­lib­er­a­tions has led to Moses Modise, Aubrey Morudu and Sol Mot­sepe leav­ing SAPA’S em­ploy. Sol might still do some work for SAPA as a con­sul­tant, although there’s no cer­tainty of this at the time of writ­ing this let­ter. I’d like to thank all three of them for the work they did at SAPA and hope their ca­reers will go from suc­cess to suc­cess. In par­tic­u­lar, I’d like to high­light the work that Moses and Aubrey did to make the DPFO a much more func­tional or­gan­i­sa­tion, and the bridges that Sol built for us with govern­ment and Par­lia­ment. Their time with us may be over but their work will leave a last­ing legacy.

For the rest of the staff, a pe­riod of great un­cer­tainty is al­most at an end. Now if we can find a sus­tain­able fund­ing model, we can ex­pect full fo­cus on de­liv­er­ing the pro­grammes and projects that you want.

Trade

The promised ‘out-of-cy­cle re­view’ of South Africa by the US Congress to con­sider our mem­ber­ship of AGOA has been ini­ti­ated. Hear­ings in Congress will have taken place by the time you read this, and we might well know what fur­ther work awaits us. As at the date of writ­ing, our US coun­ter­parts were still get­ting→

in­put from their govern­ment be­fore re­spond­ing to the draft agree­ment we’ve sent them. We be­lieve they’re not dis­cussing the ba­sic frame­work of the agree­ment (since they have ac­cepted that), but rather the ef­fects of some of the clauses as they re­late to their govern­ment.

That said, it seems un­likely that we’ll have a signed agree­ment much be­fore the end of Au­gust. We can only be­gin the pub­lic par­tic­i­pa­tion process af­ter the agree­ment is signed. Our govern­ment also can’t start the process of invit­ing bids from HDI im­porters for the quota be­fore the agree­ment is signed. In prac­ti­cal terms, it looks as though we might still have an ef­fec­tive quota by the end of this year, but any fur­ther de­lays will push the ini­ti­a­tion of the quota out to some­time next year.

Apart from these de­tails, the US is per­sist­ing with its re­quest for chang­ing the avian in­fluenza pro­to­col that South Africa ap­plies. This is an in­ter­est­ing mat­ter, and while the US ‘Ja Dok­ter’ ap­proach is not to be com­mended, there’s a real need to con­sider what prac­ti­cal meth­ods for safe trade of both live birds (breed­ers) and fin­ished prod­ucts can be found to cover the dis­rup­tions that oc­cur dur­ing out­breaks.

As men­tioned last month, I’ve been asked by the In­ter­na­tional Egg Com­mis­sion (IEC), on be­half of the egg pro­duc­ers of the world, to join a small global ex­pert group on avian in­fluenza which will con­sider pre­cisely these sorts of is­sues. Our first meet­ing is set for Septem­ber as part of the IEC con­fer­ence in Ber­lin. Now, while I don’t see my­self as a global ex­pert in this field, I know that among the small group of about 10 peo­ple, I can bring a busi­ness per­spec­tive mixed with a sci­en­tific un­der­stand­ing and can hope­fully help in the process of find­ing so­lu­tions.

Last month, I men­tioned that we had to deal with an ap­pli­ca­tion to con­test the grant­ing of a re­bate for an im­porter. A fa­cil­ity like this this would al­low that im­porter to im­port with­out pay­ing du­ties, sup­pos­edly for ex­port pur­poses, and thereby by­pass the pro­tec­tive mea­sures that are in place. As men­tioned last month, they with­drew the ap­pli­ca­tion but have now re­sub­mit­ted it us­ing new ad­vi­sors. Round two it is - and more trees will be sac­ri­ficed.

We have a date for the next phase in our Namib­ian ac­tion set by the Namib­ian Courts, and a date for the main hear­ing it­self in De­cem­ber. I’d like to be able to say that we’ll have this mat­ter re­solved in 2015, but the omens aren’t good.

The im­porter and ex­porter ac­tion to chal­lenge the im­po­si­tion of the EU an­tidump­ing tar­iffs has been quiet for a while, but all par­ties have now done the work re­quired for the next round of prepa­ra­tions for a court bat­tle. In essence, the ap­pli­cants are claim­ing that Min­is­ter Davies does not have the rights we be­lieve that he has. It’s an im­por­tant bat­tle to win as cut­ting off the Min­is­ter’s knees (po­lit­i­cally I mean) is not good for our trade de­fen­sive

ac­tions. It’s so clear from all the work we’re do­ing and the work that the de­vel­oped world does on sup­port­ing the dump­ing of their waste, that they know well the ex­tent of the prob­lems they’d face if they were no longer able to ex­port the con­se­quences of their own mar­ket’s di­ets to us mem­bers of the de­vel­op­ing world. It’s a bizarre con­cept to think that their busi­ness model re­lies on there al­ways be­ing poor peo­ple else­where in the world who’ll al­ways want to take their left­overs. I thought the de­vel­oped world wanted to help us to be no longer poor? Clearly, I’m a very naïve chap!

Avian In­fluenza

Fhe out­breaks in the USA have stopped with the last con­firmed one de­clared on 17 June. Dis­in­fec­tion of af­fected sites is pro­gress­ing well, and should be com­pleted by early Au­gust. This means that im­ports will prob­a­bly be per­mit­ted around the end of Oc­to­ber. The US vet­eri­nary ser­vices do think that fur­ther out­breaks are pos­si­ble in their au­tumn.

Avian in­fluenza doesn’t lend it­self to con­trol; far bet­ter to pre­vent its ar­rival in a flock and, if you get it, a stamp­ing out pol­icy re­mains pre­ferred prac­tice. The US now has a vac­cine which is sup­pos­edly nearly 100% ef­fec­tive. Such an ap­proach is a poor sec­ond cousin to good biose­cu­rity and a rapid re­sponse to out­breaks, which is the Dutch model. Of our main EU trad­ing part­ners, both Ger­many and the UK have re­ported new highly path­o­genic avian in­fluenza out­breaks, so trade is lim­ited once again.

It’s clear that al­ter­nate ways to deal with the ef­fects of these out­breaks are needed, or else global trade is go­ing to be very in­ter­rupted for the next few years. The trick is to find a way in which an­i­mal health risks can be min­imised. At least the cur­rent EU and US out­breaks have not led to con­sump­tion de­clines, and nei­ther have there been any hu­man health con­cerns.

I at­tended a risk sem­i­nar last month, for the sim­ple rea­son that I think at some point we are go­ing to have to de­velop a self-in­sur­ance scheme for dis­eases that af­fect us. Once the govern­ment funded Chair in Risk Man­age­ment is ap­pointed and able to pro­vide in­puts, we will be able to give both in­sur­ers and rein­sur­ers de­cent risk cost­ing mod­els. We can then be in a po­si­tion to con­sider whether self-in­sur­ance is fea­si­ble. This is, in other words, a project that will take a few years to pro­vide any use­ful out­put.

Brin­ing

There’ll be a meet­ing held by DAFF to dis­cuss the sta­tus of the draft brin­ing reg­u­la­tions in early Au­gust. As at the date of writ­ing, I’ve re­ceived no agenda - only a time and date for the meet­ing, which in­vi­ta­tion has been ex­tended to a wide range of ‘stake­hold­ers’. With such a large au­di­ence, it’s un­likely that much can be ac­com­plished in the time avail­able. No amount of meet­ings can deal with the pri­mary prob­lem, which is that these prod­ucts sat­isfy con­sumer needs with­out caus­ing any harm.

It is how­ever nec­es­sary to get this mat­ter fi­nalised as soon as pos­si­ble, so we can fo­cus on more sig­nif­i­cant mat­ters that need joint ef­fort from the State and in­dus­try to be re­solved prin­ci­pal amongst them be­ing the bet­ter man­age­ment of dis­ease.

We get the sense that DAFF has ac­knowl­edged that the proper point of mea­sure­ment of the prac­tice is at the plant dur­ing pro­cess­ing. With all the vari­ables at play, both bi­o­log­i­cal and pro­cess­ing in na­ture, to ever mea­sure re­li­ably at the point of sale is but a pipe dream. If we can re­solve this part of the dis­pute with DAFF, we can tick one more thing off the list. A proper re-writ­ing of the reg­u­la­tion should be next on the list, and the level of brin­ing is per­haps the least im­por­tant el­e­ment of the cur­rent reg­u­la­tory frame­work that needs up­dat­ing. Not that I ex­pect DAFF to agree with this opin­ion.

Agrisa

As you know, we’re no longer mem­bers of the com­mod­ity cham­ber of Agrisa; or to be ac­cu­rate, we’re no longer mem­bers of the only real agri­cul­tural com­mod­ity cham­ber in South Africa. The Chair­man of the Com­mod­ity Cham­ber has met with us to dis­cuss their de­sire for us to par­tic­i­pate in the cham­ber. I was also in­vited to speak on trade is­sues at the most re­cent Com­mod­ity Cham­ber meet­ing.

There are many is­sues when it isn’t pos­si­ble for SAPA to speak di­rectly - where we sim­ply lack the skill to com­ment, or pos­sess the

re­sources to do so. On the other hand, the po­lit­i­cal na­ture of agriculture, best ex­em­pli­fied by the re­cent In­ter­na­tional Labour Or­gan­i­sa­tion (ILO) report on farm labour, means that for us make a de­ci­sion to join is firstly a po­lit­i­cal de­ci­sion, and sec­ondly a prac­ti­cal one.

In the ILO report which looked at the root causes of farm labour dis­con­tent and losses of for­mal em­ploy­ment, the sum­marised an­swer they found is bru­tally sim­ple. Govern­ment hasn’t sup­ported agriculture, and farm­ers have re­sponded by dis­con­nect­ing them­selves from their labour­ers much as pos­si­ble. If we want to fix labour re­la­tions on farms, we need vi­able farms - and govern­ment poli­cies have made it harder for farm­ing to be vi­able. Sim­i­larly the land ques­tion, where it’s hard to see how the cur­rent ide­o­log­i­cal ap­proach will help to main­tain food pro­duc­tion at rea­son­able rates and prices.

These are the sorts of things that need a big­ger voice than SAPA to carry their mes­sage. It’s for the Man­age­ment Com­mit­tee or the new Board to de­cide on the way for­ward, and I hope that they de­bate the is­sue well.

APAP

The DAFF plan for agriculture, ap­proved by the Cabi­net, is known as APAP (Agri­cul­tural Pro­duc­tion Ac­tion Plan). The poul­try value chain, mean­ing us, the feed in­dus­try and the maize and soya in­dus­try, is one of the sec­tors in­cluded in APAP. This means that govern­ment fund­ing will be fo­cussed on those sec­tors that are in­cluded in the plan. Good for us - and we’ve de­cided that I should chair the poul­try value chain round ta­ble that will be the mech­a­nism used to co­or­di­nate ef­forts be­tween DAFF and our­selves. We’ll in­volve AFMA and Grainsa in the plan­ning for the first meet­ing (still to be sched­uled). We met with the Red Meat In­dus­try Fo­rum to dis­cuss APAP, as they seem un­de­cided as to whether to par­tic­i­pate. I think the an­swer to that ques­tion is self-ev­i­dent. DAFF is al­ready try­ing to seek ad­di­tional funds from Trea­sury to­wards poul­try growth projects. The bones have fallen in a good way I be­lieve.

Trans­for­ma­tion

Mike Kingston came up to Gaut­eng to help us in our project with the Gaut­eng De­part­ment of Agriculture and Ru­ral De­vel­op­ment (GDARD). Af­ter vis­it­ing three dif­fer­ent sites, it’s clear that the in­ter­ests of the project will be best served by work­ing with a green­field site, prefer­ably lo­cated in an in­dus­trial area. Vis­it­ing moth­balled abat­toirs gives mean­ing to the dic­tum that sec­ond hand bricks have lit­tle value. This ap­proach means that we need to ap­proach GDARD for an in­crease in the money we’ll need to de­liver on their need to cre­ate a medium sized, black owned, poul­try value chain in the prov­ince.

The Trans­for­ma­tion Com­mit­tee is one of the key com­mit­tees in both the ‘old’ and the ‘new’ SAPA, and we’ve been hav­ing an email de­bate on the na­ture of the work that this Com­mit­tee should do, as well as the role of the sec­re­tariat in that work. Clearly, the idea of trans­for­ma­tion is to give peo­ple who’ve been ex­cluded from the main­stream econ­omy an op­por­tu­nity to suc­cess­fully par­tic­i­pate. With­out giv­ing such peo­ple a “leg-up”, the ob­sta­cles to suc­cess are nu­mer­ous. So where are the bound­aries and how do we deal with the fact that it’s our mem­bers we want to help? One of the ba­sic prin­ci­ples un­der which SAPA op­er­ates is to en­sure that our work only ben­e­fits col­lec­tive in­ter­est, not in­di­vid­ual in­ter­est. Is this an ap­pro­pri­ate re­stric­tion in the case of trans­for­ma­tion?

You’re all in­vited to give us your views, so the Trans­for­ma­tion Com­mit­tee can de­velop a model that can de­liver change for South Africa.

Gen­eral

We met with a del­e­ga­tion from the US De­part­ment of Agriculture last month who were try­ing to im­prove their un­der­stand­ing of the lo­cal poul­try in­dus­try. Although all poul­try pro­duc­tion, whether meat or eggs, fol­lows a US con­cept, they’ve each been adapted to suit lo­cal con­di­tions and re­quire­ments. We’re no dif­fer­ent - and the dif­fer­ences in things like bird size, slaugh­ter mass, no moult­ing of lay­ers, etc. all need to be taken into ac­count when re­port­ing on our in­dus­try. I be­lieve the USDA now has a bet­ter un­der­stand­ing of how our in­dus­try works.

Re­gards un­til next month, Kevin Lovell, CEO.

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