Higher poultry tariffs ‘will hurt SA’
• Local producers will not fill gap, says meat association
Hiking tariffs on poultry imports from the US and Brazil will lead to further job losses in SA and an increase in chicken prices, an organisation representing local meat importers and exporters says.
Hiking tariffs on poultry imports from the US and Brazil will lead to further job losses in SA and an increase in chicken prices, an organisation representing local meat importers and exporters warned on Wednesday.
“Considering the weak economy, high unemployment and the increasingly straitened circumstances that most South Africans find themselves in, this would be terrible news for consumers,” Association of Meat Importers and Exporters (AMIE) CEO Paul Matthew said.
Studies have shown that domestic production is unlikely to increase to levels that would meet the gap most likely to be opened by an increase in trade protection, he said. This will result in consumers having to pay more for chicken, meaning that greater protection could lead to a jobs bloodbath and negatively affect GDP and the economy.
Chicken is the most popular animal protein consumed by South Africans, probably because it is the most affordable source of the food on a rand per kilogram basis. In 2017, South Africans consumed an estimated 2.12-million tonnes of chicken, at an average of about 38kg per capita — double that of beef and veal and higher than the per capita mass of pork, sheep, lamb or goat meat.
SA is expected to hike tariffs on poultry imports in the wake of an application by the SA Poultry Association (Sapa), an organisation that represents commercial broiler producers and associated breeder farmers.
Trade & industry minister Ebrahim Patel agreed to the new levies late in 2019 and the measure will soon be made official, according to Izaak Breitenbach, a GM of Sapa. The poultry industry is the second-largest component of SA’s agricultural sector and employs about 110,000 people, Breitenbach said. The new tariffs do not apply to the EU due to a free-trade agreement.
It is unclear what the new tariffs will look like at this stage. However, in its application to the International Trade Administration Commission (Itac), the organisation tasked with customs tariff investigations, trade remedies and import and export control, Sapa called for an increase in the ad valorem tariff on bone-in and boneless frozen chicken portions to 82% from existing levels of 37% and 12% respectively.
SA’s poultry sector has shed thousands of jobs and blames its demise on cheap chicken imports from Brazil, the US and Europe. This has brought it into conflict with SA meat importers who blame the lack of competitiveness of the local poultry industry for its woes.
Matthew said domestic producers cannot meet local demand for chicken. “With domestic producers currently unable to bridge this gap, this means that imports will be necessary, and because they incur higher duties, consumers will end up paying more for chicken and poultry products,” Matthew said.
“This is something that SA simply cannot afford, so we urge the authorities to tread carefully in weighing up the needs of domestic producers versus that of South Africans and the economy at large,” he said.
“AMIE’s position has always been that policymakers need to explore less costly ways to encourage the competitiveness of SA’s broiler industry. One of these measures is to increase the amount of poultry that SA exports, which will not only benefit the consumer but also lead to more jobs and grow the SA economy.”