From the Desk

The Poultry Bulletin - - CONTENTS - Re­gards un­til next month, Kevin Lovell, CEO.¡

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

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.

As­signee is­sues

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.

Task team

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.

Trade

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.

Trans­for­ma­tion

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.

Gen­eral

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.

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