From the Desk
The news dominating the poultry industry over the last month has been the avian influenza outbreaks, four of which have been reported as at the date of writing this letter. So what’s the prognosis for the future? Well, this virus is certainly of European origin and has most likely come to us via migratory wild birds. How it jumped from migratory wild birds (that have already returned to Europe) into our domestic poultry is less certain, and tracing work is ongoing.
As these birds fly the same route every year, what reasons are there for the current outbreaks? The most likely answer is that the huge number of outbreaks in Europe, both in commercial poultry and wild birds this last season, has led to the wild birds carrying a heavier than usual viral load. Since outbreaks are still occurring in Europe in their summer, which is most unusual, the prognosis for further outbreaks next year in South Africa is fairly high. When will it stop in South Africa? Difficult to be definitive in the answer, but there is likely to be a higher risk for producers for a good few months more.
Many of you would have registered as cull sellers or cull buyers. This arrangement was made with the cooperative work of both SAPA and DAFF. DAFF have formally assigned tasks to the PDMA, illustrating the value of the PDMA and the value of the concept of public private partnerships.
Avi Africa went fairly well with slightly more registrations than last year and roughly the same number of attendees. There were new companies in the exhibition space which gave delegates a new range of service providers to visit. We received good feedback from some of the
lecture sessions, so all-in-all I think we delivered a decent service to the poultry industry. As always, we welcome your feedback so we can improve things for next year.
A number of meetings with egg producers were held prior to the Egg Organisation AGM. The revised Code of Practice was approved at the respective AGMS and at Congress, with some amendments to the layer code. These amendments to the one annexure have since been found to leave the text not terribly sensible, so a process to correct the unintended confused text will now take place. The revised Code of Practice is available on our website. As with most such codes, it’s intended to function as a set of minimum standards of acceptable behaviour. All members are expected to comply with the code and any member is welcome, as they see fit, to apply higher standards than those in the code.
The resolution by one of the Egg Organisation members to consider the closure of the Egg Organisation did not succeed. This might be due, in part, to some distortions in voting rights when these were carried over from the previous organisational structure to the new structure. The Egg Organisation Committee will attend to this. The voting rights are set in the Rules of the Organisation, meaning that the Committee can amend them, and the amendments merely have to be presented to the AGM next year. The reason for the resolution remains valid, namely that the Egg Organisation in its current form is not viable, with losses reported every month. As the two divisions of SAPA are not legal entities on their own, this doesn’t create an immediate corporate governance problem, but it does leave a hole in the SAPA finances which have to be filled somehow. Please join the Egg Organisation. It needs you and we need a viable Egg Organisation.
SAPA organisational matters
We’ve had further upheavals within the membership base, the details of which will probably have changed substantially by the time you read this so there’s no point in detailing these as they now stand. What’s important to note is that both the egg and chicken meat industries need a mechanism for collective action. The avian influenza outbreaks and the questions around the costs of the assignees are pretty obvious examples of the need for collective action. The government-led task team on the broiler industry couldn’t function without SAPA as the collective voice of the industry. That has to be counter balanced with the need for funding, which requires more membership. Avian influenza does not specifically choose members or nonmembers as infection sites - it takes whatever opportunity is presented. I think those of you reading this who are not members should seriously consider joining the club.
The three Chairman and SAPA met with a possible PR service provider to look at a broad strategy on PR for the combined egg and meat industry. The proposal still has to be amended before it can go to the two Committees for debate and approval. Thereafter it will go to the Board for final approval and budget allocation. The idea behind this is to present the industry in a way such that consumers and the general public have a better understanding of who we are and what we do. Ditto why we are a useful part of the national fabric. This is not going to be an issue campaign like ‘white monopoly capital’ and that sort of stuff – it is more about taking the two industries from being relatively unknown and little understood to more widely known and better understood.
SAPA has responded to the draft regulations on the assignees and we await the response of DAFF which is likely to follow once all comments received have been processed by them. At the same time, we’re continuing to work with the appointed assignee, AFS, to see if a risk management based model can be developed. It’s become apparent that the frequency of visits proposed by AFS does not have a science based premise behind it. To be fair to the process, it should also be noted that the practices of DAFF in relation to egg packaging plant inspection frequencies are also perhaps not based on a scientific and statistical determination of need. There’ve been a number of meetings last month with more scheduled to take place in July.
I hope all producers accept that compliance with
all regulations is a requirement of business and that being monitored for compliance is a sensible thing to happen. The cost must be related to the purpose though - and that’s where we seem to be a bit stuck. We’re working on developing a risk based model that can be used by DAFF and the assignee to come up with an approach that’s responsive to the risk experienced. What this will mean, if it is adopted, is that those companies who are shown to be compliant during inspection visits will end up paying less than those companies found to be noncompliant, as noncompliant companies will receive additional visits until they can be shown to be compliant. Another positive feature of more thorough monitoring is that it puts competitors on a more equal footing, making it harder for businesses to use non-compliance as a competitive advantage.
The governmentled task team met again in June and will meet again in early July. We’ve done quite a bit of specific work on the export programme, the MDM programme and the SPS measures programme. The avian influenza outbreaks have obviously put a block on our current exports and highlight the need to treat exports as a ‘nice to have’ rather than a ‘reason to exist’. Some of our neighbouring states have accepted the safety of the existing established compartments after some additional testing has been done. This will be an important part of any export growth plans to new markets; else the swings and roundabouts of variable demand in the export markets could cause more harm than good. DAFF are themselves developing their understanding of the possible export markets so they can offer support and inputs into the export programme. Effectively, we can possibly compete in about half of the global poultry export market; in other words, we can compete in the fair trade export market, not the dumping market. That 50% is big enough to want to be involved and needs a range of things to happen - country to country agreements, acceptance of our→
phytosanitary standards, and access to cheaper maize. Then the battle for market share can begin.
The EPA safeguard submission found itself mired in further unavoidable delays, but we’re now very much in the home straight as the updated submission has been verified by ITAC and accepted as complete and correct. The other stakeholders have until 10 July to respond; we’ll reply if needed; and then ITAC will meet to finalise its decision. Thereafter, their decision will be sent to Minister Davies as a recommendation for his action. We’re hopeful that the Minister’s intention will be known by early August. We really need this safeguard in place as the EU is unlikely to actually acknowledge the morally-flawed rationale behind their poultry business model i.e. we sell our waste to the poor and eat only what we want to eat and make these sales of our waste at way below the cost of production.
Clearly, we’ll need to deal with diversion to other sources of supply and plans to manage this potential problem are well advanced. Related to these actions, SARS have published a draft revision of the tariff codes applicable to imports of frozen poultry portions. If ratified, it’ll make it harder for some importers to engage in tariff evasion by misdeclaring their imports. AMIE themselves have said they’re keen to improve the conduct of the import industry, especially as far as I understand, that of some of the non-members who they feel might be engaging in various forms of irregular behaviour. The simplified codes are not a change in the tariff level themselves. Sometimes it seems as if we are attacking the importers directly, which is not actually the case. As most of you are aware, the great majority of people importers employ are involved in warehousing, distribution and sales. Regardless of where the poultry comes from, those jobs will continue to exist. All that hopefully will change is that the price of imports will change to more properly reflect the real cost of production, so that fair competition can take place. Not one of our trade actions has led to a ban on imports, and I cannot see that we’ll ever be in a position to so do - or even have the desire to so do.
The GDARD project is progressing well and an official opening beckons in the near future. After some ribbon cutting, we look forward to further similar cooperative efforts between government and industry. We still have to work out a way to get more funding agencies involved in transformation work and hopefully the Transformation Committee will meet relatively soon to chart the way forward.
SAPA met with a group of Nigerian producers last month, and we’ll hopefully be able to cooperate further with them and their association in the future. After listening to their issues, it’s clear that there are a number of commonalities between our two countries.
The management meeting for the Research Chair in Poultry Health and Production took place last month at the University of Pretoria. The National Research Foundation (NRF) has agreed to include this Research Chair as one of its funded positions from next year. Requests to universities to express an interest in the Chair position will be issued during July. This means that the support given by SAPA over the last five years will end and the cost of the position will be transferred to the NRF. We might still want to commission specific research work as determined by members. We are grateful to the NRF for ensuring that this valuable initiative will continue and have the financial security that it needs.
Prior to Avi Africa we had our usual SADC producers’ meeting which was a good opportunity for avian influenza discussions. The more we can share on matters of common interest, the more we will end up looking after our own interests.