From the Desk

Trade, disease, brin­ing and or­gan­i­sa­tional devel­op­ment

The Poultry Bulletin - - CONTENTS -

The maize in­dus­try held an emer­gency meet­ing on 15 Jan­uary to de­bate how best to feed South Africa in try­ing times, with all the main lo­gis­tics stake­hold­ers, DAFF, the NAMC and other key par­ties present. The good news is that all con­cerned are try­ing hard to make sure we utilise our im­port­ing ca­pac­ity as ef­fi­ciently as pos­si­ble. Since yel­low maize is freely avail­able around the world, our in­dus­try con­cern is about lo­gis­tics and price. For users of white maize, there are ma­jor is­sues re­lat­ing to avail­abil­ity.

The bad news is that all users of maize will have paid at least R16 bil­lion ex­tra over the cur­rent maize mar­ket­ing sea­son and the one to come. That means close to R4 ex­tra cost for an av­er­age weight live bird and about R1.70 ex­tra cost per dozen eggs sim­ply to cover the in­crease in feed in­gre­di­ent costs. One mustn’t for­get that many other costs have gone up as well over the last while.→

The even worse news is that Grainsa are per­sist­ing with their at­tempt to set a tar­iff on maize based on a $233 ref­er­ence price. If they were to suc­ceed, they would ruin this in­dus­try and largely negate the ef­fect of SAFEX as a price form­ing mech­a­nism. Our re­but­tal of their ap­pli­ca­tion is with ITAC. We are also of the view that the pre­lim­i­nary es­ti­mate of the cur­rent sea­son har­vest is likely to be over­stated; our view is that a har­vest of around 6,6 mil­lion tonnes is more likely.

Then of course we have our econ­omy, be­calmed in a dirty sea of un­wanted com­modi­ties and with no al­ter­nate en­gine to get us to a happy sun­set. Ah well, at least we have some­thing to worry about be­fore go­ing to bed at night.

New Or­gan­i­sa­tions

Dr Char­lotte Nkuna has been hard at work try­ing to grow the mem­ber­ship base of the Egg Or­gan­i­sa­tion, and I’m hope­ful that with her energy and skill, it won’t be long be­fore the Egg Or­gan­i­sa­tion be­comes the na­tional body it used to be. In the in­terim, we con­tinue in ‘care­taker mode’ as time washes away the emo­tive dust of the past.

We’ve re­sponded to the De­part­ment of Labour’s re­quest for a sub­mis­sion on a sec­toral de­ter­mi­na­tion for abat­toirs, which if ap­proved, will lead to in­creased costs for the broiler in­dus­try and a col­lapse of col­lec­tive bar­gain­ing at plant level. There’s a good chance that a na­tional min­i­mum wage will be pro­mul­gated as part of the 2016 mu­nic­i­pal elec­tion noise and be­fud­dle­ment cam­paign, so it’s quite pos­si­ble that this de­ter­mi­na­tion, if ap­proved, will be­come moot. More likely, many pro­duc­ers will be mech­a­nis­ing, and our na­tional loss of em­ploy­ment op­por­tu­ni­ties will con­tinue.

DAFF have made some progress with the plan to in­sti­tute In­de­pen­dent Meat In­spec­tion this year. The Broiler Or­gan­i­sa­tion would want that our pro­posal to im­ple­ment this through an in­de­pen­dent third party is ex­pe­dited, as it seems as if some meat types have con­cerns that could re­ally slow down the pas­sage of the legislation.

The Trans­for­ma­tion Com­mit­tee will meet in Fe­bru­ary, with an im­por­tant part of the agenda to de­velop the pro­vin­cial struc­tures within SAPA. If we don’t do this, we’ll find it dif­fi­cult to keep the provin­cially based smaller pro­duc­ers ac­tively in­volved in SAPA. We need more of you as mem­bers so we can do more for you. Know us and we can know you.

Trade

Jan­uary be­gan with two me­dia brief­ings by Min­is­ters Davies, Zok­wana and Mot­soaledi on the ‘last minute’ ne­go­ti­a­tions re the three meats. The fi­nal pro­to­cols on the three meats were signed on 6 Jan­uary although we un­der­stand that a part of the pork pro­to­col is still out­stand­ing. Min­is­ter Zok­wana took the time there­after to dis­cuss AGOA with all the key meat stake­hold­ers from the beef, pork and poul­try in­dus­tries in mid-jan­uary. We ap­pre­ci­ate his shar­ing of the ra­tio­nale be­hind some of the de­ci­sions made by DAFF. Such can­dour doesn’t make any of these de­ci­sions bet­ter ones, and while it isn’t for me to speak on the pork and beef mat­ters, I do on the poul­try is­sues.

The more we find out about US Sal­mo­nella stan­dards, the more we un­der­stand why they forced South Africa to lower the im­port stan­dards. Sim­ply put, our stan­dards aren’t sim­ply dif­fer­ent; they’re bet­ter. The US cur­rently has no Sal­mo­nella test­ing and per­for­mance stan­dards for por­tions - the largest part of their mar­ket. Bizarre. It isn’t for us to care if they ex­port po­ten­tially con­tam­i­nated chicken por­tions to many parts of the world; the re­cip­i­ent coun­tries can make their own as­sess­ment of the risks in­volved. We care that such con­tam­i­nated prod­uct can’t en­ter South Africa. The power of South Africa to safe­guard the health of its cit­i­zens has been se­verely com­pro­mised at the al­tar of ap­pease­ment. As Neville Cham­ber­lain found out, ap­pease­ment is of­ten not a suc­cess­ful strat­egy to fol­low.

The March dead­line for con­firmed ac­cess of these three meats is loom­ing so per­haps the mat­ter will find its own res­o­lu­tion. We have an ad­di­tional con­cern about the abil­ity of DAFF to con­trol the quota ef­fec­tively as it seems as is the first pe­riod quota has been an un­seemly rush to the sweets counter with lit­tle record keep­ing in place. Our com­mit­ment was to a spe­cific vol­ume, in a spe­cific way, with spe­cific con­trols and con­di­tions in place. Oth­ers might think it is their turn to eat - and we grant them that - but with proper ta­ble man­ners re­quired.

AGOA has been of suf­fi­cient in­ter­est for Am­bas­sador

Is­mail and I to be in­vited to a dis­cus­sion ses­sion by a lo­cal busi­ness school to de­velop ma­te­rial for an MBA pro­gramme. So chicken knowl­edge will be fed into some new MBA grad­u­ates over the next few years. Cluck cluck.

Both Ag­biz and the South African In­sti­tute of In­ter­na­tional Af­fairs held AGOA sem­i­nars in early Fe­bru­ary with vis­it­ing US of­fi­cials who have been part of the ne­go­ti­a­tions and who were both in­volved in the poul­try dis­cus­sions in Paris last year. The theme of both sem­i­nars was – what fol­lows AGOA? Well it is a good ques­tion be­cause re­ly­ing on a con­ces­sion for eco­nomic growth seems like a risky strat­egy. The lack of a bi­lat­eral trade re­la­tion­ship be­tween the US and SA is telling when you con­sider that we have been able to ne­go­ti­ate two such agree­ments with the EU – firstly the Trade, Devel­op­ment and Co­op­er­a­tion Agree­ment (TDCA) and more re­cently, the Eco­nomic Part­ner­ship Agree­ment. Not that I think these are won­der­ful agree­ments but we were able to find suf­fi­cient con­sen­sus to sign them into law. For us to do the same with the US will re­quire that the US un­der­stands our needs and our ca­pac­i­ties. We are nei­ther a big coun­try nor a de­vel­oped one. My apolo­gies to those who live in the Ka­roo but ge­o­graph­i­cal size does not au­to­mat­i­cally trans­late to eco­nomic size.

When it comes to the HPAI pro­to­col the ex­pe­ri­ence of the EU is per­ti­nent. As com­mon sense re­quires, the EU ex­pects that free­dom from disease is proved be­fore trade can take place. The SA-US HPAI pro­to­col as­sumes free­dom from disease and data which may sup­port such a claim might be de­liv­ered well af­ter trade has taken place. That is very un­wise. The new HPAI out­breaks in In­di­ana give the lie to the US-SA pro­to­col. Sur­veil­lance of farms af­ter the recorded out­break showed a num­ber of LPAI pos­i­tive farms. Put another way the virus had prob­a­bly been cir­cu­lat­ing in In­di­ana for some time be­fore it sero-con­verted into HPAI and killed some tur­keys. One of the ben­e­fits of HPAI di­ag­no­sis is that the birds are dead and die rather quickly so it is rel­a­tively easy to know you have a prob­lem even if you don’t know what that prob­lem might be. Not hav­ing good sur­veil­lance data freely avail­able means you can’t as­sume free­dom - and that you must prove it.

The ad hoc SAPA team brought to­gether to re­spond to the Sal­mo­nella and NAI is­sues met in Jan­uary and will no doubt meet again soon to re­fine our un­der­stand­ings of these is­sues. The im­por­tant point for read­ers to note→

is that South Africa - a small coun­try at the tip of a con­ti­nent far away from the de­vel­oped world - ac­tu­ally has rather good an­i­mal health and disease stan­dards. I be­lieve that DAFF and our ve­teri­nar­i­ans should be con­grat­u­lated for the work they have done and are con­tin­u­ing to do.

As you should be able to de­ter­mine, we be­lieve that, as your rep­re­sen­ta­tives, we need to be sure that we’ll not give pos­ter­ity cause to curse us, so we’re con­sid­er­ing how best to safe­guard the na­tional flock and the con­sumer base from un­nec­es­sary disease and health risks.

By the time you read this, ITAC will’ve gazetted the ini­ti­a­tion of an in­ves­ti­ga­tion into the use of a safe­guard in terms of the TDCA be­tween the EU and SA. This ap­pli­ca­tion seeks to re­turn the EU to the po­si­tion where they are charged the same tar­iff lev­els as all other ma­jor ex­porters to us, for it’s clear that with­out the tar­iff free ac­cess they en­joy, we’d not be as at­trac­tive a mar­ket to them as cur­rent data shows.

Im­ports last year in to­tal were more than 478,000 tonnes - an in­crease of al­most 22 per­cent­age points over last year. When it comes to bonein por­tions, the main prod­uct of con­cern, im­ports were at more than 192,000 tonnes - an in­crease of al­most 22,5% per­cent­age points over last year. The EU makes up more than 81 per­cent­age points of those bone-in por­tion im­ports whereas it was not long ago that their ex­ports were less than one per­cent­age point. Shows you what trade agree­ments can do to an in­dus­try.

Brin­ing

DAFF held a stake­holder meet­ing on 27 Jan­uary to dis­cuss brin­ing. It was a less than suc­cess­ful meet­ing with the agenda be­ing al­tered by DAFF at the ini­ti­a­tion of the meet­ing. The rather bizarre idea that par­tic­i­pants should vote on the de­sired out­come, as was at­tempted in 2012, came to the fore in this meet­ing as well. A reg­u­la­tor needs to ap­ply his or her mind and weigh up com­pet­ing fac­tors. Vot­ing does not come into this.

It’s clear the in­struc­tion by Min­is­ter Zok­wana to his of­fi­cials to prop­erly con­sult with us hasn’t been met. One can but spec­u­late as to why the of­fi­cials want to pass a reg­u­la­tion which is in­valid, un­en­force­able and if fol­lowed, will cause un­nec­es­sary harm to con­sumers, pro­duc­ers and re­tail­ers - but it seems we’re past the point of rea­son. Per­haps some last minute com­mon sense will be found in a dusty cup­board.

In any event we con­tinue with our work to pro­vide DAFF with a com­plete and well re­searched reg­u­la­tion, prop­erly sup­ported, that can meet the needs of all par­ties. The only area which is still un­cer­tain is the test­ing of prod­uct at the point of re­tail pur­chase. All other re­quire­ments for a de­cent reg­u­la­tion can be met in a short pe­riod of time. Our in­ter­est in hav­ing reg­u­la­tion re­mains. We sim­ply don’t want what’s cur­rently on of­fer.

In­ter­na­tional Egg Com­mis­sion (IEC)

In time, Dr Char­lotte Nkuna will be tak­ing over from me as your rep­re­sen­ta­tive at the IEC. In the mean­time, I con­tinue with the work and vis­ited both Mozam­bique and Swazi­land on be­half of the In­ter­na­tional Egg Foun­da­tion (IEF), a char­i­ta­ble part of the IEC fam­ily, with the Sec­re­tary Gen­eral of the IEC. The Mozam­bique trip pro­vided some use­ful in­sights for the broiler trans­for­ma­tion work that we are try­ing to do in South Africa. The key point is a mind shift change which will al­low for smaller farm­ers to sup­ply safely and cost ef­fec­tively into an in­te­grated sup­ply chain.

The Mozam­bique IEF work will be mostly fo­cussing on the devel­op­ment of small scale egg farm­ing, which can be sold through a cen­tralised pack sta­tion op­er­a­tion or - and this is an im­por­tant dis­tinc­tion - sold di­rectly into the com­mu­nity. If this works as in­tended it could be a use­ful model for some of the smaller egg farm­ers in South Africa.→

The IEF work in Swazi­land fo­cusses mostly on us­ing eggs to im­prove the nutrition of dis­ad­van­taged chil­dren and thereby im­prov­ing their fu­tures. Through my work with the Food and Agri­cul­tural Or­gan­i­sa­tion of the United Na­tions (FAO) on be­half of the IEC, we’re try­ing to get the FAO to de­velop a book on the nu­tri­tional ben­e­fits of egg con­sump­tion (and pro­duc­tion) which can guide devel­op­ment fund­ing de­ci­sions. The FAO have done such a book on dairy, so this is more about copy­ing than trail blaz­ing. From a de­vel­oped world per­spec­tive, high pro­tein di­ets give the egg a new sheen. From a de­vel­op­ing world per­spec­tive though, a bet­ter un­der­stand­ing of the ben­e­fits of higher pro­tein child­hood nutrition is still not com­mon knowl­edge. It is well un­der­stood in sci­en­tific cir­cles that diet de­ter­mines long term growth and per­for­mance out­comes. Viva Pro­fes­sor Noakes, Viva.

I had another tele­phone con­fer­ence as a mem­ber of the OIE an­i­mal wel­fare work­ing group and also have, on be­half of the global egg in­dus­try, par­tic­i­pated in a pro­ducer driven fo­rum to raise wel­fare mat­ters proac­tively rather than re­ac­tively. This ini­tia­tive is both a meat and egg ac­tiv­ity, and it’ll be of use to all pro­duc­ers wher­ever they are in the world to try be ahead of the po­lit­i­cal pres­sure that’ll come to change prac­tices. Within the OIE, the per­spec­tive is not to try to change peo­ple to be­come om­ni­vores but rather to en­sure that the stan­dards pro­moted for the ben­e­fit of the worlds’ ex­ist­ing om­ni­vores are aligned to the best pos­si­ble knowl­edge. I’ll be at­tend­ing the OIE gen­eral ses­sion in May on be­half of the IEC to keep driv­ing the in­ter­ests of the global egg in­dus­try.

DAFF Vet­eri­nary Strat­egy

Many of you are aware that DAFF in­vited the OIE to re­view the sta­tus of our vet­eri­nary ser­vices some time back. We lauded them then for hav­ing the courage to do so, and we laud them again. The OIE fol­lowed up the ini­tial as­sess­ment with a fur­ther set of vis­its and a re­port to pro­vide a gap anal­y­sis. DAFF is now con­sult­ing around the coun­try on how best to ad­dress the gaps iden­ti­fied and SAPA, through the good of­fices of Dr Char­lotte Nkuna, has par­tic­i­pated in this process. Once all pro­vin­cial con­sul­ta­tions have taken place, DAFF will be in a po­si­tion to ad­vise the Min­is­ter as to what changes Trea­sury and Par­lia­ment will need to make to im­prove the depth and qual­ity of vet­eri­nary ser­vices avail­able to the na­tion. As our di­ets change and as our pop­u­la­tion grows, vet­eri­nary ser­vices are go­ing to be­come more needed than they are now. If we do suc­ceed in our drive to be­come a sig­nif­i­cant ex­porter, then the need for ad­di­tional vet­eri­nary ser­vices will in­crease.

Gen­eral

We’re hard at work with the plan­ning for Avi Africa this year. The draft pro­gramme is on our web­site and we in­vite you to go onto the SAPA web­site and view it. We’ve made some fur­ther changes to the for­mat to try make it more ap­peal­ing to all del­e­gates. For the first time, dis­counted reg­is­tra­tion fees for mem­bers will be on of­fer for those who reg­is­ter on-line. Please take ad­van­tage of this of­fer so that we can con­tinue to be of ser­vice to you. Any sug­ges­tions and ideas as to how to make things bet­ter are, as al­ways, wel­come.

The SAPA au­di­tors are hard at work pre­par­ing the 2015 an­nual re­ports, which we hope to be able to cir­cu­late to the Board within the next month or so. So far, all ap­pears in or­der - as it has for the last nine years. Our re­serve po­si­tion has weak­ened with all of the post levy pe­riod trou­bles and we look for­ward to a sta­ble, in­clu­sive, fund­ing model that is ac­cept­able to the great ma­jor­ity of pro­duc­ers.

Many a time we have mulled over how to make con­sumers more in­ter­ested in iden­ti­fy­ing with the South ‘Africaness’ of our egg pro­duc­tion and the mostly South ‘Africaness’ of our broiler meat pro­duc­tion. Proudly South African has come to of­fer to help and we’ll be mak­ing a case for eat­ing lo­cal with key stake­hold­ers at a Proudly South African day in March. It’s easy to not take these sorts of things se­ri­ously, but I think we need to feel and show pride for who we are and what is that we wish to be. Be proudly South African - and many of our trou­bles will seem less threat­en­ing.¡

Re­gards, Kevin Lovell CEO

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