The South African Poultry Association (Sapa) has warned that the International Trade Administration Commission’s (Itac) recommendation to grant back-dated rebates for certain poultry imports will damage the local industry, which is still struggling to recover from last year’s Avian influenza outbreak.
This comes after Itac recommended in a report released on 6 March 2024, backdated to 15 December 2023, that the Department of Trade, Industry and Competition Minister, Ebrahim Patel, implement rebates for certain frozen poultry imports to curb “shortages” in the local market.
Sapa said in a statement on Monday that it was puzzled by the commission’s reasoning for awarding the rebates, which the association believes are “unnecessary, unjustified and damaging” to the domestic poultry industry.
The industry was still recovering from the worst Avian influenza outbreak in the country’s history, but neither poultry farmers nor industry analysts were expecting any shortages now that the threat had abated, Sapa said. However, Itac has calculated that the market will experience a shortage of 172,000 tonnes during 2024, and has awarded 65 permits to allow importers to claim rebates on their orders.
Some of the rebates would apply to bone-in chicken, Sapa said, effectively negating the hard-fought anti-dumping duties agreed to in the Poultry Sector Master Plan to curb chicken imports.
“It’s quite ironic. Itac is the institution that calculated the material harm done to the local industry because of dumped poultry product, yet it has approved 65 permits, some of which will enable importers to purchase dumped product,” said Izaak Breitenbach, general manager of Sapa’s Broiler Organisation.
The 65 permits issued are valid from 26 January to 27 April 2024, and the import quota for the first quarter is 43,000 tonnes.
Sapa said the association and its members were confident in its calculations and its approach in supplying South Africa with chicken. The last reported shortage was more than three years ago.
According to the association, capacity has grown significantly in the last five years due to the industry’s investments totalling more than R2.1 billion, creating thousands of new jobs and bolstering food security.
“These rebate permits are undoing that work. They are designed to encourage additional chicken imports when the country does not need them. They will cause further harm to the South African poultry industry, which is beset by challenges on all sides.
“It is recovering from the unprecedented Avian influenza outbreaks in 2023 with no aid from government. Despite the Animal Disease Control Act of 1984 stipulating that farmers will be compensated for culling flock in accordance with the law, no farmer has received a cent in recompense,” said Breitenbach.
He said Deputy President Paul Mashatile had announced a relief fund for the poultry industry at the National Council of Provinces in October of 2023 but his promise of aid had not materialised.
“The poultry industry has yet again to look inward for assistance and support. The rebates will further imperil small-scale farmers struggling to get back on their feet, while padding the profit margins for importers in order to address a problem that doesn’t exist.”
Breitenbach said Sapa had recently conveyed its research and findings on the current chicken supply to the Department of Agriculture, Land Reform and Rural Development (DALRRD), advising that there was currently no shortage of chicken on the local market.
“We are distressed that instead, DALRRD must have confirmed the Itac calculations on shortages if Itac is issuing rebate permits. It’s confusing, damaging to the poultry industry and greatly undermining, and undoing the work of the master plan,” Breitenbach concluded.
