From the Desk

Oper­a­tion Phak­isa, Par­lia­ment, im­ports and levies

The Poultry Bulletin - - CONTENTS -

The in­dus­try lost an­other of its stal­warts last month with the un­timely death of John Peace who was for many years an in­sti­tu­tion in the egg in­dus­try. You will find an obit­u­ary in the news sec­tion, but I ask that you all spend some time to re­flect on his pass­ing. In keep­ing with his char­ac­ter he chose to have a cel­e­bra­tion of his life at one of his Spur restau­rants, rather than a for­mal fu­neral ser­vice, at­tended by all of his fam­ily, friends and col­leagues.

It was our turn to present to the agri­cul­ture port­fo­lio com­mit­tee of Par­lia­ment (PPC) at the be­gin­ning of March with a pre­sen­ta­tion to the trade and in­dus­try PPC sched­uled for the mid­dle of March. Our pre­sen­ta­tion to the agri­cul­ture PPC is avail­able to read­ers if you like, as will be our pre­sen­ta­tion to the trade and in­dus­try PPC.

Agrisa

SAPA at­tended the Agrisa com­mod­ity cham­ber meet­ing at the end of Fe­bru­ary and also par­tic­i­pated in part of their com­mod­ity con­fer­ence. We also met with AFASA to hold dis­cus­sions with their new pres­i­dent Dr Vuyo Mahlati, who has re­placed Mike Mlen­gana, our cur­rent DG of DAFF. We re­main hope­ful that the two main unions in agri­cul­ture, Agrisa and AFASA, can find com­mon cause and form one con­sol­i­dated union that can truly rep­re­sent the ma­jor­ity of farm­ers in our coun­try. Do­ing so would ren­der the some­what con­fus­ing de­bate as to what sort of gen­eral com­mod­ity or­gan­i­sa­tion should ex­ist to serve South African agri­cul­ture eas­ier to re­solve. Our main per­spec­tive is that it’d make sense to be able to have a body - or bod­ies - that can han­dle mat­ters not ex­clu­sively within the re­mit of SAPA or any other in­di­vid­ual com­mod­ity or­gan­i­sa­tion. For this to work, this body needs to be seen as po­lit­i­cally uni­fied. It’s un­re­al­is­tic to ex­pect that, in the cur­rent state of our na­tional de­vel­op­ment, any such body could be apo­lit­i­cal. We have a way to travel in this jour­ney.

DAFF

SAPA was in­vited to the of­fi­cial launch of Oper­a­tion Phak­isa. The Phak­isa work streams were de­vel­oped over a five week pe­riod, with Char­lotte rep­re­sent­ing the in­ter­ests of the poul­try in­dus­try. As the work “Phak­isa” means ‘hurry up’, five weeks did seem like a long time to get to a fi­nal plan. This fi­nal plan is a good doc­u­ment and is avail­able to all read­ers of the Bul­letin. The launch speech was given by Pres­i­dent Zuma, who fo­cussed not only on the plan for Phak­isa it­self but also his ex­pec­ta­tions of res­o­lu­tion of the land ques­tion. It ap­pears as if de­liv­ery of change, which is what Oper­a­tion Phak­isa will bring, doesn’t have an en­tirely con­sen­sual view within parts of the state ap­pa­ra­tus.

At the ser­vice de­liv­ery fo­rum of Min­is­ter Zok­wana held on 3 March, ques­tions were raised about the state­ments be­ing made by the Pres­i­dent. The Min­ster as­sured all present that land re­form will be done within the con­straints of the con­sti­tu­tion. As a coun­try, it’s clear that we haven’t ex­plored all the op­tions avail­able to us that do com­ply with the con­sti­tu­tion, so the op­por­tu­nity for different mech­a­nisms of land ac­cess and own­er­ship might well be tested in the next few years. The best I can say is that all of us need to trust in the con­sti­tu­tion and allow novel means of re­dress to be tested in terms of their per­mis­si­bil­ity. This is obviously sep­a­rate from the is­sue of prac­ti­cal pro­duc­tion re­form. So what could that mean for us? Well, I think it should ob­vi­ous to all that our econ­omy still has a lot more change re­quired be­fore it can be said to have broad­ened ac­cess to the great ma­jor­ity of our peo­ple. There are def­i­nitely op­por­tu­ni­ties to broaden ac­cess, with ap­pro­pri­ate gov­ern­ment sup­port, in the field of poul­try pro­duc­tion and also in the area of poul­try meat and egg brand­ing and mar­ket­ing. Per­haps it is only in pro­cess­ing, pack­ing and slaugh­ter­ing that it makes sense to keep the cur­rent abat­toirs and egg graders and pack­ers pretty much as they are? If change is to be pro­duc­tive - and even if dis­rup­tive, is not de­struc­tive - we are go­ing to need to work closely with gov­ern­ment in a true part­ner­ship, each bring­ing its own strengths and ca­pac­i­ties to the ta­ble. We are mov­ing in that di­rec­tion but we aren’t there yet.

Min­is­ter Zok­wana was quite clear in his ad­dress at his ser­vice de­liv­ery fo­rum that we would be sup­ported by the state and by the gov­ern­ing party in re­solv­ing our cur­rent tra­vails in the broiler in­dus­try. This is an im­por­tant pub­lic state­ment that now needs to be backed up by ac­tion, some of which is easy to do. An ex­am­ple would be to ad­vise all the coun­tries who have the right to trade with us that we will ver­ify their claims of free­dom from HPAI when­ever such a coun­try declares it­self free of the dis­ease. This is some of them do to us - en­tirely per­mis­si­ble and eq­ui­table treat­ment is gen­er­ally to be sup­ported.

Sev­eral of the in­dus­tries af­fected by the assig­na­tion of the re­spon­si­bil­i­ties of the DAFF in­spec­torate are un­happy with the way in which the process has been driven and the costs that are likely to be in­curred. I be­lieve that DAFF is aware of the is­sue and will try to re­solve the un­hap­pi­ness be­fore it es­ca­lates. We’re ac­tive in this process and will re­port back when we can.

Trade

AMIE’S call for Par­lia­ment to in­ves­ti­gate our in­dus­try has been ac­ceded to, so we’ll be us­ing this op­por­tu­nity to present our side of the story in the mid­dle of March. It is AMIE it­self that proudly says that their im­ports are sold for sim­i­lar or higher prices than our equiv­a­lent prod­ucts so they should ac­knowl­edge that there is no con­sumer ben­e­fit to their ac­tions - obviously they pre­fer to ig­nore the log­i­cal dis­con­nect in their ar­gu­ment. The most telling part of the ar­gu­ment is that im­ports take away jobs on a net ba­sis and we cre­ate them. What does South Africa need most? Jobs.

SAPA has been heav­ily ex­posed to the me­dia this year with Marthi­nus Stander be­com­ing much more vis­i­ble on our me­dia chan­nels, broad­en­ing the SAPA mes­sage. Much of the ex­po­sure re­mains pos­i­tive al­though the deep seated cul­tural cringe of many South Africans still al­lows them to think that the ‘other’ must be bet­ter than us when it is ac­tu­ally the op­po­site that is true.

The Fair Play ini­tia­tive has had its own me­dia brief­ings to which we, as well as oth­ers, were in­vited. From both the par­lia­men­tary and me­dia sets of en­gage­ments, it’s clear that the nar­ra­tive that we are not com­pet­i­tive still per­sists to an ex­tent. ITAC has de­ter­mined that we are suf­fer­ing due to im­ports from Europe. The facts of the mat­ter are that we can pro­duce slaugh­tered whole birds for less than they can; we are more com­pet­i­tive than the coun­tries that cur­rently cause the most harm. We can be more com­pet­i­tive if we could pay less for maize and soya bean oil­cake, but grain prices are not the main prob­lem fac­ing the in­dus­try; dump­ing is.

The dti led task team con­tin­ues to meet and his is­sued an om­nibus of de­sired ac­tions to var­i­ous Min­is­ters for their re­spec­tive ac­tion. We hope that you’ll have read of some of these ac­tions long be­fore this let­ter gets pub­lished, for with­out ur­gent ac­tion the sit­u­a­tion will rapidly worsen.

ITAC is work­ing on our trade ap­pli­ca­tions and we look for­ward to res­o­lu­tion quite soon in the case of the EU safe­guard. The ap­par­ent un­will­ing­ness of the EU to ac­cept the rule of law and chal­lenge what they per­ceive as in­cor­rect ac­tion by ITAC means that we should be ready for some ‘left-field’ at­tempts to ki­bosh the safe­guard ac­tion.

Statu­tory levy

In dis­cus­sions with one of the ma­jor pro­duc­ers of layer day-old-pul­lets, we’ve re­alised the prac­ti­cal dif­fi­cul­ties that these com­pa­nies will face in col­lect­ing the levy. An al­ter­nate of­fer has been made, which will now be dis­cussed with the other layer breeder com­pa­nies. On the ba­sis that we re­solve this is­sue, we still need pro­ducer sup­port. Many of you haven’t re­sponded to Char­lotte’s call for sup­port. Please do so. The cur­rent brouhaha over the costs of the DAFF as­sign­ment of in­spec­tion ser­vices is a case in point. If DAFF has its way, the egg in­dus­try will be pay­ing about 1,8c per dozen for an in­de­pen­dent party to do the work that DAFF used to do→

for no cost. Yet we strug­gle to raise 1c per dozen from pro­duc­ers for a levy that would allow us to prop­erly de­fend your in­ter­ests! Doesn’t seem sen­si­ble to me.

SAPA

We con­tinue with our Avi Africa plan­ning and the pro­gramme con­tin­ues to de­velop. If all the in­vited speak­ers do agree to take up their speak­ing slots, I think the pro­gramme will be par­tic­u­larly in­ter­est­ing. There’s still some ex­hi­bi­tion space avail­able al­though it’s fill­ing up quite fast. If you haven’t yet booked your space, I sug­gest you do so soon­est.

We’ll meet with the Univer­sity of Pre­to­ria in early March to dis­cuss the par­tial fund­ing of the Re­search Chair po­si­tion. As men­tioned last month, we’ve ap­proached the Na­tional Re­search Foun­da­tion who’ve said they need to know the whole fund­ing mix be­fore sub­mit­ting our ap­pli­ca­tion to their ap­provals com­mit­tee. They’re keen to work with us to keep the Re­search Chair in Poul­try Health and Pro­duc­tion alive.

There’s an­other planned ex­port trip in March, this time to West Africa. We’ll re­port back next month should it come to pass. As good Africans, we should want to work with part­ners in other African coun­tries to help them cre­ate and grow their own egg and broiler in­dus­tries. We shouldn’t seek to be a ‘mini EU’ if we want our po­si­tion within Africa to be seen pos­i­tively.

Af­ter some care­ful re­assess­ment, the broiler pro­duc­tion model has been amended tak­ing into ac­count bet­ter breeder and hatch­ery data. This means that the size of the in­dus­try has been down­scaled slightly. I ask that you look at the lat­est set of broiler statis­tics to get an idea of what the changes are in terms of the different pa­ram­e­ters. If there are any hatch­eries and breed­ers not sup­ply­ing data to Lead­ing Edge, please start to do so at your ear­li­est con­ve­nience so that the qual­ity of the data we pro­vide is fur­ther im­proved. We’re now work­ing on a sim­ple model to ex­plain the to­tal­ity of what’s pro­duced in the broiler value chain so that wacko ideas on the size of the im­port in­dus­try in to­tal and in spe­cific sub­sec­tors can be ad­dressed. Once all of this mod­el­ling is com­plete, it’ll be pub­lished for gen­eral use. It might in­ter­est you to know that im­ports of bone-in por­tions are ac­tu­ally close to 25% of the to­tal mar­ket in bone-in por­tions and that this amount has a ma­jor ef­fect on the price for­ma­tion of the whole broiler in­dus­try.

The Gaut­eng re­gional meet­ing was held in mid­febru­ary, the sec­ond meet­ing to fol­low the one held in KZN last year. At­ten­dance was much less than in KZN, al­though there was an op­por­tu­nity for some smaller farm­ers to talk about is­sues and one fairly new farmer to ex­plain his suc­cesses in mov­ing from a small pro­ducer to quite a de­cent sized one. More provin­cial meet­ings are be­ing planned, and I hope you’ll try at­tend these held in your prov­ince. Please ask Dr Char­lotte Nkuna for more de­tails.

There’ve been some rum­blings from mem­bers about the re­vised SAPA Code of Prac­tice to be put for ap­proval at Congress this year af­ter more dis­cus­sions with the two or­gan­i­sa­tions. It’s a pity mem­bers aren’t more ac­tively in­volved in these dis­cus­sions from the start so they can help steer the dis­course in a man­ner more suit­able to their needs. The un­der­stand­ing of an­i­mal wel­fare is a mov­ing tar­get as new knowl­edge and new in­ter­pre­ta­tions of knowl­edge come to bear on the team work­ing on the draft. We need to po­si­tion our­selves as en­gaged with the topic as it’ll never go away for as long as you are all farm­ing. The work of the SABS to es­tab­lish a poul­try meat and eggs wel­fare code is also on­go­ing.

Gen­eral

Char­lotte has signed up the first few con­trac­tors for our GDARD Tsh­wane fresh mar­ket pro­cess­ing project. She is also close to ap­point­ing a project man­ager to over­see the con­struc­tion phase so as to en­sure dead­lines are met and qual­ity is as­sured.

The cur­rent cri­sis in the in­dus­try is prov­ing to be a boost for our trans­for­ma­tion ef­forts, with a num­ber of com­pa­nies talk­ing to us with some novel ideas on how to broaden the pro­duc­tion and mar­ket ac­cess base. All of these ideas are go­ing to firstly need a sta­ble mar­ket and most likely some gov­ern­ment sup­port, but it’s ex­cit­ing in­no­va­tion is com­ing to the fore in dif­fi­cult times.¡

Re­gards Kevin Lovell CEO.

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