Chicken wars: SA vows to fight dumping

Cape Town - Deputy President Cyril Ramaphosa said government will do everything in its power to ensure that there are no factory closures or job losses in the poultry sector.

Ramaphosa, who was responding to questions in the National Council of Provinces (NCOP) on Wednesday, said South Africa will vigorously defend the industry against dumping and unfair trade practices.

READ: Protectionist policies not enough to save SA poultry

"Within the provisions of the World Trade Organisation’s rules and South Africa’s trade agreements, South Africa will vigorously deploy trade measures to protect the poultry industry from dumping and unfair trade practices," he said.

Chicken, which is the major source of protein for the majority of South Africans, has been at the centre of a bitter fight between South African farmers and importers.

Local chicken producers insist European Union countries and the US are dumping chicken legs, thighs and wings on South Africa at below cost price. They say this is threatening the demise of the chicken industry.

Major chicken producer RCL Foods, which owns the Rainbow and Farmer Brown chicken brands, warned it would have to let more than 1 300 workers go and shut down various farms in Hammarsdale in KwaZulu-Natal owing to unfavourable conditions in the industry.

READ: Stop dumping chicken in SA, urges SAPA

The government has added a temporary 13.9% “safeguard duty” in a bid to rescue the industry. The tariff will be in force until July 3, but there are calls for a higher tariff to be applied and for an extended period.

"Working closely with the private sector, government will deploy incentives and other support measures to protect the industry, maintain production capabilities, save jobs and ensure food security," said Ramaphosa.

Government has established two task teams to urgently address the situation within the poultry industry. The first is a government task team, while the second is a broader task team that includes representatives of government, business and labour.
Ramaphosa said the partners are working in close collaboration on a programme to address the complex and multiple challenges facing the domestic poultry industry.
"It is critical that South Africa preserves its production capacity across the entire poultry value chain," he emphasised.
"This is important because poultry products are a critical source of protein for the majority of the population and the industry is an important employer."

READ: Call to probe SA's beleaguered poultry industry

Ramaphosa said the task teams are developing an economic analysis of the existing situation across the entire value chain, from upstream feed-stock production, poultry production and value-addition, through to the retail and logistics sectors.

"They are developing a plan of action to support the industry, encompassing a range of supply and demand side initiatives and measures."

Some of the areas under consideration include trade and industrial financing measures to support the industry and efforts to raise competitiveness.

"The Task Team is also engaging with a wider range of stakeholders to ensure that the views and interests of all stakeholders is adequately addressed," said Ramaphosa.
He noted that significant progress has been registered by the task teams.

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