Local poultry needs a leg-up
I have been living in Sydney for the past few months and have avidly followed news relating to the headwinds facing the poultry industry in South Africa.
The decades-old poultry tariff wars have not lost any intensity, and the situation appears as bitter as it was when I was representing importers more than five years ago. What has changed is the battlefield on which these wars are being waged.
Consumers are in major distress, given unemployment levels, food price inflation and electricity woes.
Local poultry producers are also taking strain. The government’s master plan isn’t working, and the industry is suffering. Something needs to change — and quickly.
I have always been totally opposed to protectionism, but the playing field is not nearly level. A perfect storm is raging and consumers are suffering.
In Australia the poultry industry is in good health. The average Australian consumes about 50kg of chicken a year (more than in South Africa), and the only chicken imports are ready-cooked chickens from New Zealand. So the local producers derive the most benefit.
Of interest is the fact that Australia doesn’t believe in levying high tariffs on the products it imports, and most are duty free. General sales tax is 10%, whereas VAT in South Africa is 15%.
I believe the South African government must urgently put the interests of the consumer first, removing VAT for at least the cuts that feed the poorer segment of the population. Local producers should also receive some form of subsidy to offset the huge costs incurred through ruined power and water supply systems, which producers in other countries don’t have to contend with. Chicken prices could then be reduced to assist the millions of poor consumers.
If this means import tariffs must be retained, or even increased, then that’s what needs to happen.
D Wolpert Sydney, Australia