While chicken dumping is making it hard for South Africa’s poultry producers to farm profitably, chicken importers are laughing all the way to the bank, local experts believe.
During a recent industry round table discussion hosted by the FairPlay Movement, it was revealed that chicken imports had averaged R6 billion per year for the last six years.
“If chicken importers sold those consignments for only 10% more than they paid – and we think it’s more because we believe their profits are substantial – then they [have been] making R600 million every year for the past six years,” said Francois Baird, founder of the FairPlay Movement during the discussion.
This means that R3.6 billion has been made from chicken imports over a period of six years. But how these billions were being spent, needed to be explained, Baird said.
“What have they done with R3.6 billion over the past six years? Expanded their business? Created South African jobs instead of buying imports which create jobs in Brazil and Europe? Or have they just enjoyed fat profits?”
Local farmers can’t compete
Although “dumping” is not illegal as such, it is widely regarded as unethical as dumped products are unwanted or in surplus in their countries of origin. Producers are willing to sell them at almost any price to foreign markets, and these prices then undercut producers in the destination countries.
For small-scale poultry farmer Amanda Mdodana from Middelburg in Mpumalanga, chicken dumping in Mzansi is personal. She says that imported chicken is being sold at prices that she and fellow producers cannot compete with.
She knows of several small-scale farmers who are at risk of closuring their businesses as a result.
“If import tariffs were [to be] removed as importers have requested, then local businesses will close, and jobs will be lost.”
She calls on consumers to support local producers by purchasing locally produced chicken and chicken products. Mdodana also feels that small-scale poultry farmers need better representation among those who fight for local farmers’ rights.
A lack of profit is curbing investment
Despite a recent study by Genesis Analytics, which found that local poultry producers had not made enough profits to invest back into the industry in the past decade, the industry committed itself to investment and expansion targets and the creation of local jobs.
This was part of the negotiation process for the poultry sector’s master plan, said Izaak Breitenbach, head of the broiler division at the SA Poultry Association during the online event.
“The poultry industry has committed to investing R1.5 billion, of which R1.14 billion has already been completed.
“Most has already been spent on expanded production capacity. We have so far created more than 1 300 jobs. We report on these figures regularly [with] auditors who verify our efforts.”
Dismissing recent claims made by Paul Matthew, CEO of the Association of Meat Importers and Exporters, that local poultry producers were making profits at the expense of the consumer, Breitenbach said price increases were a direct result of rising feed prices, which made up 70% of producers’ input costs.
“Feed prices went up by 20% and Brazil has raised chicken prices by 23%. Our increases are far lower than [those in] Brazil. Our industry is actively fighting price increases,” Breitenbach said.
Baird said that although chicken dumping was not illegal, chicken imports needed to be adjudged and regulated to give a fair advantage to local markets going forward.
ALSO READ: Cheap chicken dumping continues to hurt local farmers
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