Implement those tariffs now, Mr Patel

If the government was in any doubt about the difficulties facing the South African chicken industry, they should have been removed by the profit warning from the country’s largest poultry producer, Astral Foods.

Astral has confirmed what it announced in January – that profits for the first half of the financial year, to be announced later this month, will be down by between 87% and 92% from the same period last year.

The reasons are unchanged: market conditions are deteriorating due to “record high feed input costs, devastating levels of load shedding and the general decay of municipal infrastructure continuing to impact operational efficiencies and costs negatively”.

Astral said in January that chicken cost R2/kg more to produce than it was selling for. In addition, it has been spending R1 million a day on diesel for back-up generators. Astral is not alone – the whole poultry industry is “distressed” according to Izaak Breitenbach of the SA Poultry Association (SAPA). This is especially true for small-scale and independent family-owned producers.

And while the poultry industry is battling, chicken importers are advising the government to extend the suspension of new anti-dumping duties on chicken imports from Brazil and four European Union countries. In August last year Trade, Industry and Competition minister Ebrahim Patel agreed that these five countries had been dumping chicken here, that their actions were harming the local industry, and that anti-dumping duties were warranted.

However, Minister Patel cited concerns about food prices and decided not to impose those duties for 12 months. Now the Association of Meat Importers and Exporters (AMIE) has urged Minister Patel to keep that suspension in place rather than bring anti-dumping duties into force in August.

That advice is misguided and self-serving (chicken importers obviously want more imports), and Minister Patel should ignore it. The poultry industry is distressed, mainly because of load shedding, but dumping continues and Minister Patel should do nothing to add to the industry’s woes. In addition, he has undertaken in the poultry master plan to act against dumping and illegal trade.

The poultry industry objected to the suspension of anti-dumping duties against Brazil and the EU countries and called on Minister Patel to cut short the 12-month deferral. Now it is expecting him to implement those duties in August.

Poultry is a strategic national industry that feeds the nation. Astral’s problems show why poultry producers need his support.