AGRICULTURAL NEWS - Major chicken producer RCL Foods, which owns the Rainbow and Farmer Brown chicken brands, says the government's new 13.9% safeguard duty on imported bone-in chicken portions from the EU is "hopelessly inadequate."
South African chicken producers, the South African Poultry Association, and labour mainly blame "dumping" of dark chicken meat products, such as legs, for the industry's woes as producers struggle to sustain operations.
Scott Pitman, MD of the consumer division at RCL, says 1,355 workers, staff and management will lose jobs at the end of January. This is because exports of dumped chicken leg quarters are in great oversupply globally.
"Northern hemisphere consumers, who consume most of the chicken meat in the world, only desire breast meat and wings, and therefore the leg quarters are in oversupply - and Africa is one of the few places they can still sell it," he says. "But because of the oversupply they must lower their prices by whatever new tariff is imposed, otherwise they won't sell it. Hence the uselessness of the 13.9% new EU tariff," he says.
Government aware of crisis
Trade and Industry Minister, Rob Davies, who in December increased tariffs on imported chicken portions, says the government is aware of the crisis facing the poultry industry and is considering designating chicken as one of the products that state entities will be required to buy locally.
The deputy director-general of the industrial development division of the Department of Trade and Industry, Garth Strachan, says the department has assembled a task team of experts to assess the depth of the crisis and its effect on the poultry industry.
Policy instruments that could be deployed to support the industry and protect jobs would also ensure that the interests of consumers are safeguarded. "A meeting between government - representative of a number of departments - business and labour will be convened in the very near future to share and discuss this," Strachan says.
Raising aggregate demand for domestically produced chicken is a key policy objective, he says. "Engagement with public sector procuring agencies has already taken place to ensure that the relevant clauses of the Public Finance Management Act are utilised to procure locally produced poultry and poultry products," he says.
A call for hefty tariffs, similar phytosanitary barriers as the rest of the world
The Food and Allied Workers Union (Fawu) has also criticised the Department of Trade and Industry over the new safeguard duty. It is not enough to stop thousands of workers in the industry from losing their jobs, it says.
Scott Pitman, MD of the consumer division at RCL, says 1,355 workers, staff and management will lose jobs at the end of January. This is because exports of dumped chicken leg quarters are in great oversupply globally.
"Northern hemisphere consumers, who consume most of the chicken meat in the world, only desire breast meat and wings, and therefore the leg quarters are in oversupply - and Africa is one of the few places they can still sell it," he says. "But because of the oversupply they must lower their prices by whatever new tariff is imposed, otherwise they won't sell it. Hence the uselessness of the 13.9% new EU tariff," he says.
Government aware of crisis
Trade and Industry Minister, Rob Davies, who in December increased tariffs on imported chicken portions, says the government is aware of the crisis facing the poultry industry and is considering designating chicken as one of the products that state entities will be required to buy locally.
The deputy director-general of the industrial development division of the Department of Trade and Industry, Garth Strachan, says the department has assembled a task team of experts to assess the depth of the crisis and its effect on the poultry industry.
Policy instruments that could be deployed to support the industry and protect jobs would also ensure that the interests of consumers are safeguarded. "A meeting between government - representative of a number of departments - business and labour will be convened in the very near future to share and discuss this," Strachan says.
Raising aggregate demand for domestically produced chicken is a key policy objective, he says. "Engagement with public sector procuring agencies has already taken place to ensure that the relevant clauses of the Public Finance Management Act are utilised to procure locally produced poultry and poultry products," he says.
A call for hefty tariffs, similar phytosanitary barriers as the rest of the world
The Food and Allied Workers Union (Fawu) has also criticised the Department of Trade and Industry over the new safeguard duty. It is not enough to stop thousands of workers in the industry from losing their jobs, it says.
