From the Desk

The Poultry Bulletin - - CONTENTS -

Prac­tice, pol­i­tics, re­search and trade

This past month was marked by the Brazil­ian meat scan­dal. Trade in an­i­mal prod­ucts around the world re­lies on trust be­tween vet­eri­nary author­i­ties of the coun­tries in­volved. Can DAFF still trust the ve­rac­ity of the cer­tifi­cates at­tached to Brazil­ian meat im­ports? The scan­dal in­volves a small num­ber of Brazil­ian meat plants, and while there’s no in­di­ca­tion of wide­spread cor­rup­tion in the Brazil­ian sys­tem, it’ll be easy to be dis­trust­ful of all Brazil­ian prod­ucts from now on. We have to look at this scan­dal and con­sider what it is that we need to do to main­tain and im­prove the per­cep­tion of our own meat and egg in­dus­tries.

The cor­re­spon­dence around our re­vised Code of Prac­tice makes me think that we’re not see­ing the world in which we live as much as the world in which we pro­duce. Some­times, it doesn’t help to be right if oth­ers don’t ac­cept that what one does is right. The brin­ing reg­u­la­tions are a good case in point - a prac­tice that worked to con­sumers’ ben­e­fit is lim­ited be­cause peo­ple didn’t think it was in the con­sumer in­ter­est. A gross lack of knowl­edge and un­der­stand­ing doesn’t pre­vent de­ci­sion mak­ers from mak­ing de­ci­sions, even if these are wrong or bad. I hope that Brazil de­vel­ops a trans­par­ent way for its trad­ing part­ners to be­lieve in its sys­tems again.

As­signees

An urgent meet­ing was called by DAFF to deal with the con­cerns of in­dus­tries over the ap­point­ment of as­signees in the poul­try meat and egg, grain, in­dus­try and veg­etable in­dus­tries. The Agri­cul­tural Prod­ucts Stan­dards (APS) Act al­lows for the ap­point­ment of as­signees to do work on be­half of DAFF. This doesn’t mean as­signees should be ap­pointed if there’s no demon­strated need for their ap­point­ment - prob­a­bly the main con­cern of all the af­fected in­dus­tries. Ex­tra costs are be­ing added to agri­cul­ture for no good rea­son. Some of­fi­cials at DAFF don’t seem to un­der­stand the con­cept of pub­lic ser­vice. I hope that DAFF con­sid­ers that rea­son should pre­vail and that this mat­ter will not in­volve DAFF in un­nec­es­sary court ac­tion by any num­ber of par­ties. We have writ­ten

fur­ther let­ters to DAFF on this mat­ter and we hope that a sen­si­ble so­lu­tion is in the off­ing. We’ll keep you posted on de­vel­op­ments.

The doc­u­ments on the as­signee­ship from DAFF lead us to be­lieve that our ad­vice to you on ex­port­ing prod­ucts needs some up­dat­ing. A let­ter will have been writ­ten to mem­bers be­fore you get to read this edi­tion of the Bul­letin. If any­one didn’t re­ceive the let­ter, please con­tact me di­rectly.

Par­lia­ment

We had an all­day ses­sion in Par­lia­ment last month, pre­sent­ing to the trade and in­dus­try Port­fo­lio Com­mit­tee. All pre­sen­ta­tions are avail­able if de­sired. AMIE con­tin­ued with their ap­proach of dis­in­for­ma­tion and de­vi­ous­ness. They now say they ac­cept we’re a com­pet­i­tive pro­ducer, but that the prob­lem is else­where in the value chain. And where do they sell their goods? They also say the prob­lem is that we don’t ex­port to the EU – in other words, that they should be al­lowed to buy dumped prod­ucts while we, or they, should be al­lowed to ex­port fairly traded goods. Our best ex­port mar­kets are likely some­where other than the EU, although we’d be happy to have the EU as one of these. We’ll never be happy to coun­te­nance dump­ing, from what­ever source.

It seems the Port­fo­lio Com­mit­tee didn’t see through their lies and disin­gen­u­ous­ness. It was also telling that the stay­ing power of the com­mit­tee was in­suf­fi­cient for them to keep on track for the whole day. The Demo­cratic Al­liance (DA) mem­bers were more in­ter­ested in try­ing to show off their mas­tery of the mat­ter than lis­ten­ing and learn­ing, and in­fan­tile drivel on sell­ing brine as meat and such other tosh were glee­fully trum­peted. There were at­tacks made by the DA that our em­ploy­ment data was false with­out the faintest un­der­stand­ing of the method­olo­gies used or very ba­sic prin­ci­ples of sta­tis­tics. Some­times one de­spairs. Per­haps we should not vote but be given darts to throw at a board since a good num­ber of peo­ple we ac­count to and rely on for sup­port have lit­tle in­ter­est in un­der­stand­ing the is­sues at hand.

The sub­mis­sions made by the Na­tional Agri­cul­tural Mar­ket­ing Coun­cil to the Par­lia­men­tary Com­mit­tee were quite il­lu­mi­nat­ing where, re­gard­less of the eco­nomic model used, it was clear that South Africa ben­e­fits from a vi­brant lo­cal in­dus­try. Im­ports of chicken are bad for the coun­try. Pe­riod.

The Chief Com­mis­sioner of ITAC made an im­por­tant con­tri­bu­tion to the de­lib­er­a­tions of the Port­fo­lio Com­mit­tee when he pointed out that tar­iffs alone will not save the in­dus­try. This is true as we have the EU trade agree­ment, and im­porters and ex­porters have shown con­sid­er­able flex­i­bil­ity with pric­ing and sourc­ing strate­gies. The real an­swer is that we have to stop the dump­ing - and much more than tar­iffs are re­quired to do that.

The Port­fo­lio Com­mit­tee ques­tioned us as to our level of trans­for­ma­tion. It was telling that they didn’t ask this of AMIE, and the mis­un­der­stand­ings about trans­for­ma­tion per­sist. Clearly SAPA, which is its mem­bers, can­not trans­form the busi­nesses of its mem­bers. What we can do though is help with sys­tems and struc­tures that al­low the in­dus­tries to trans­form them­selves. Some­times I won­der how we’re go­ing to get clar­ity on this dis­tinc­tion into the pub­lic dis­course so pres­sure can be brought to bear on SAPA to do what it can - and should do - and not what it can’t. Any of­fers of help will be ap­pre­ci­ated.

For­tu­nately there are a good num­ber of of­fi­cials within gov­ern­ment who are alive to the real is­sues and the real facts and are work­ing hard at deal­ing with our is­sues. Will it be in time?

Re­search and re­lated mat­ters

The Univer­sity of Pre­to­ria and the Board of SAPA have agreed to part spon­sor the costs of the Re­search Chair in Poul­try Health and Pro­duc­tion from 2018 on­wards. The→

Na­tional Re­search Foun­da­tion is now pre­par­ing sub­mis­sions to cover the re­main­ing costs of the Chair. We’ve ben­e­fited greatly from the cre­ation of the Chair, a project made pos­si­ble by the levy. It would be bad for the long term health of the in­dus­try to lose the ex­per­tise that we’ve cre­ated – and con­tinue to do so.

The poul­try task team is be­ing used as a means to try push the con­ver­sion of the PDMA into a full pub­lic pri­vate part­ner­ship, an idea that was al­ways viewed pos­i­tively by DAFF but not acted on. I guess their work­load makes it hard to look at things like the PDMA, but an ef­fec­tive part­ner­ship will ac­tu­ally ease their work­load, not add to it.

We’re also, as ac­tive mem­bers of the An­i­mal Health Fo­rum (AHF), look­ing at ways of for­mal­is­ing some of the work of the AHF to achieve more as a gen­eral joint part­ner­ship be­tween in­dus­try and the state, not sim­ply poul­try and the state, which is what the PDMA is. Ziyanda will be tak­ing this idea fur­ther and will re­port to you all in the near fu­ture.

Then, the last part of this en­gage­ment with the fu­ture of the in­dus­try is to get the Re­search Chair in Risk Anal­y­sis filled. This po­si­tion has had fund­ing al­lo­cated to it from the NFF and DAFF, and is go­ing through the process of se­lect­ing the univer­sity, which will be fol­lowed by the se­lec­tion of the can­di­date process. Hope­fully we’ll have some­thing to re­port by year end.

Com­pet­i­tive­ness

There’s been so much talk about com­pet­i­tive­ness now that it’s hard to stay fo­cussed. We don’t as yet have an egg in­dus­try bench­mark­ing ex­er­cise in place, although Charlotte is work­ing on this and data sup­ply­ing vol­un­teers are asked to con­tact. How­ever, the broiler ver­sion of the ex­er­cise, run jointly by the Univer­sity of Wa­genin­gen and BFAP, has been through its sec­ond it­er­a­tion and the data should be out soon. The first round showed clearly that, even with our maize and soya bean oil­cake prices be­ing higher than our com­peti­tors, we can pro­duce slaugh­tered whole chick­ens for less than any of the EU coun­tries sur­veyed. So how can this mantra of our lack of com­pet­i­tive­ness per­sist? Even if we didn’t have the de­vi­ous machi­na­tions of AMIE in­volved in the dis­course, I think there’s a deep-seated be­lief among South Africans that we aren’t as good as the ‘other’. For us to go for­ward, we need to be­lieve in our­selves. We also need to fo­cus on our main is­sue, which is that we are a de­vel­op­ing coun­try and, in com­mon with all other de­vel­op­ing coun­tries, what we need is real change. Some­times, I think we fo­cus too much on the ‘white­ness’ is­sues and not enough on the de­vel­op­ing is­sues. Do­ing that would make it eas­ier to un­der­stand the com­mon­al­i­ties we have with other coun­tries in Africa, rather than our dif­fer­ences with them.

Task team

Last month, I wrote with hope that there will have have been Min­is­te­rial ac­tion on the task team om­nibus. Well, we’re still wait­ing and rely more than ever on DAFF to ac­tu­ally come to our as­sis­tance with con­crete ac­tions, rather than prom­ises of ac­tion.

The task team will meet again in April, and is now work­ing on some of the sec­ond phase is­sues which are de­signed to re­vi­talise the in­dus­try. These will, of course, not be ef­fec­tive if we don’t first sta­bilise the in­dus­try, for which we need DAFF. At the April meet­ing, it was clear that all par­ties, with the ex­cep­tion of DAFF, had de­voted con­sid­er­able time and re­sources to the prob­lems of the in­dus­try. We’re quite sure that DAFF has the ca­pac­ity to as­sist the in­dus­try and the

skills to do so; if only we could as­sist in the bet­ter co­or­di­na­tion of their ef­forts.

One of the tasks we’re busy with is the de­ter­mi­na­tion of likely price ef­fects should maize ex­ports be man­aged and a higher stock-to-use ra­tio of maize main­tained - drought years ex­cepted. This isn’t a straight­for­ward anal­y­sis, and will have a num­ber of im­pli­ca­tions for con­sumers. The main one is that, over time, food will be cheaper and spec­u­la­tors will have less to spec­u­late about. You can well imag­ine that such par­ties are ter­ri­fied.

Trade

Good news is that the USA anti-dump­ing sun­set re­view has fi­nally been ini­ti­ated. As the duty was due to ex­pire quite soon this was a bit of a close shave. Now the process of hear­ing the other side starts. The deal with the US when we made the AGOA con­ces­sion was that they could not use the quota in any at­tack on the du­ties but may con­tinue to use any other means of at­tack­ing the du­ties that might prop­erly ex­press their case. As the fun­da­men­tal prob­lem is the En­ron ac­count­ing that they use (claim­ing that whole birds have a real cost but that por­tions have no real cost, only an al­lo­cated cost), we look for­ward to them demon­strat­ing the ex­is­tence of fairies. In the last re­view, they also chose not to co­op­er­ate with the in­ves­ti­ga­tion and we’re not sure if they’ll choose to not co­op­er­ate again. Ei­ther way, we’ll do our best to en­sure that the duty is re­newed for a fur­ther five year pe­riod. As you know, the quota hasn’t been fully utilised so far, with the first cy­cle be­ing 15 months to ac­com­mo­date the un­cer­tain­ties around the date of im­ple­men­ta­tion of the quota. We re­main com­mit­ted to our agree­ment on the vol­umes.

We also re­main com­mit­ted to cor­rect the weak­en­ing of hu­man health stan­dards to ac­com­mo­date the lower Salmonella stan­dards ap­pli­ca­ble in the USA. The DAFF an­swer­ing af­fi­davit has now been re­ceived, and we’ll shortly re­spond to that. This means that the sched­uled court date of 6 April will now be changed. The so­lu­tion is, of course, for rea­son to pre­vail and for DAFF to deal with its de­ci­sion in a proper man­ner. The re­cent HPAI out­breaks in the US, some of which have been in broiler breeder flocks, would sug­gest that their biose­cu­rity→

is not as strong as they want us to be­lieve. Not that I think any of you should gloat: rather I think you should be sit­ting down with a pen or pen­cil and con­sid­er­ing what it is that you could im­prove to min­imise the like­li­hood of the dis­ease ever break­ing out in South African chick­ens.

The amended sub­mis­sion on the EPA safe­guard will long have been sub­mit­ted by the time you get to read this let­ter. ITAC said in Par­lia­ment that it’s their in­ten­tion to fi­nalise their work and sub­mit a rec­om­men­da­tion to Min­is­ter Davies by end May.

To strengthen the sub­mis­sion, we’ve been work­ing hard to pro­vide ITAC with bal­anced data on the real ef­fects of changes in the maize price on pro­duc­tion costs and mar­gins earned. The maize price is very im­por­tant to our in­dus­tries, even though its ef­fect on price and mar­gin are in the lower sin­gle digit num­bers. The im­por­tance is sim­ply be­cause both the egg and meat in­dus­tries are low mar­gin busi­nesses and a small change in over­all mar­gin can have a ma­jor im­pact on the sur­vival of a busi­ness. It is im­por­tant, but not as dra­matic as many com­men­ta­tors would like us to be­lieve.

SAPA

The Avi Africa pro­gramme is still be­ing fi­nalised as speak­ers con­firm their at­ten­dance. We’ll be up­dat­ing the pro­gramme on our web­site as changes are con­firmed for those who are in­ter­ested in see­ing what’s on of­fer. The an­nual re­port is nearly com­plete, and will be sent to you well within the time lim­its de­ter­mined by the con­sti­tu­tion. Which brings me to the point that very few re­quests for changes to the con­sti­tu­tion have been re­ceived to date. It is the right of all mem­bers, not only com­mit­tee mem­bers, to ask for changes to the con­sti­tu­tion. Please read the con­sti­tu­tion if you haven’t al­ready done so, and send your sug­ges­tions for changes or also ex­press your con­cerns, such as they may be.

We’ve met with our au­di­tors to con­clude the an­nual fi­nan­cial state­ments for 2016 and all is ac­cept­able. There re­mains some un­cer­tainty with debtors, and the fi­nan­cial po­si­tion of the Egg Or­gan­i­sa­tion is a cause for con­cern - more for us than it is for the au­di­tors, as they’re look­ing at SAPA as a whole while we look at the two sub­sidiary bod­ies and the main body al­most as though they are sep­a­rate com­pa­nies. The need for the statu­tory levy for the Egg Or­gan­i­sa­tion re­mains press­ing.

The Broiler Or­gan­i­sa­tion meet­ing sched­uled for 23 April had to be post­poned be­cause of our pre­sen­ta­tion to Par­lia­ment and will now be held on 19 April, the day be­fore the Board meet­ing.

Charlotte will re­port on the most re­cent of our provin­cial meet­ings held in the North West Prov­ince. Three down, six to go. Of course a meet­ing is merely the start; now we need re­gional bod­ies to be formed.

Gen­eral

I’ll be at­tend­ing the IEC meet­ing while this let­ter is on its way to you. I will also be at­tend­ing the first of the two IPC meet­ings in April. The An­i­mal Wel­fare Work­ing Group (AWWG) of the OIE had a tele­con­fer­ence last month, and a key out­come is that the re­vised def­i­ni­tion of the mean­ing of an­i­mal wel­fare pre­pared by the AWWG will be taken for­ward to the Gen­eral Assem­bly of the OIE in May. I will cir­cu­late the pro­posal once it has been sent to all coun­try mem­bers of the OIE.

The global stan­dards on layer wel­fare that are cur­rently be­ing drafted (with me as one of the drafters on be­half of the egg pro­duc­ers of the world) are go­ing to take a bit longer than an­tic­i­pated, as the Code Com­mis­sion of the OIE ran out of time to re­view them in Fe­bru­ary. They will now do so in Septem­ber this year and will only go out to the coun­tries af­ter that.

The ad hoc team has, in the mean­time, up­dated the draft slightly.

The EU re­port on their visit to South Africa to look at sys­tems in place for the os­trich in­dus­try was il­lu­mi­nat­ing as to what they will be ex­pect­ing of us if we want to ex­port to them. Much of this dealt with ways of be­ing sure that claims made by DAFF and the os­trich in­dus­try could be eas­ily ver­i­fied. Ziyanda will be work­ing hard this year to im­prove the rigour of the avian in­fluenza mon­i­tor­ing sys­tem that we use as a sup­port aid to DAFF. I ask that you all as­sist her in this task. It needs all of us work­ing to­wards the same end point if we are to suc­ceed.

Re­gards un­til next month, Kevin Lovell CEO.¡

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