POWELL, Ohio — Producing around 19.6 million birds per week, poultry is the largest sector in South African agriculture. The South African poultry industry is one of the top 10 most competitive poultry industries in the world. Dumping or importing a product at a price lower than local producer charges is harming local farmers and their communities. As dumping can cause local producers to go out of business, communities may end up without sources of protein. With 27% of children stunted in growth in South Africa as of 2016, having reliable sources of protein is important. By advocating for fair trade practices, organizations similar to the FairPlay Movement understand the importance of small-scale farmers supporting local communities.
As imports make up around 30% of the poultry products in South Africa, importers such as the EU and Brazil can sell chicken for a lower cost than local producers can. Low-income South Africans, who are price-sensitive, may choose to buy the cheaper imported chicken. This can cause small-scale and local farmers to go out of business. Many of the farms are located in rural South Africa, according to the FairPlay Movement founder François Baird, who The Borgen Project interviewed. As a result, people can lose their employment and some communities will lose their source of protein.
Though this dumping is not illegal, Baird refers to it as “predatory trade.” If importers can have more power in the industry, then they may be able to raise prices for more profits. The price of chicken rose and Ghanaian farmers produced less chicken when there were no tariffs or duties on European poultry imports, according to Baird. As a result, chicken may be less accessible to poor or rural communities in South Africa. Without a reliable source of protein, the rate of irreversible stunting in South African children may increase.
Dumping and Inflation
While dumping is not illegal, there are measures such as tariffs that can help regulate it. The Association of Meat Importers and Exporters wants to eliminate those tariffs to lower chicken prices in South Africa. The FairPlay Movement said the elimination of tariffs could make the dumping issue worse.
Additionally, with rising inflation, the price of chicken is increasing as input costs rise. For example, South Africa must rely on imported soybeans and other materials to make chicken feed. The inputs make up around 70% of input costs, causing the price of chicken to rise as input costs do as well. As Baird said, communities in South Africa require more attention as input costs rise.
Baird told The Borgen Project that “Special efforts should be made particularly in rural and vulnerable communities to provide them with access to poultry at a reasonable price.”
The FairPlay Movement has asked to see possible investments importers are giving back to local communities since they are able to sell chicken for such a low price. Baird explained that the benefit importers are gaining is not going back into local communities. However, small-scale farmers have agreed to invest back in their communities. The revitalization of the South African industry will create around 1,300 jobs.
The Poultry Master Plan serves as an agreement with the South African poultry industry, importers and the government to work to expand the exports of South African poultry products. In addition to promoting fair trade practices, there are other efforts that South Africa can take. The South African poultry industry can work to meet international health and safety standards and re-orient local producers’ operations to extract value from different meat cuts that other countries are demanding.
Besides promoting fair trade and efforts to support the poultry market, there are other current efforts to help local communities. Scrapping the value-added tax for low-income families could make chicken more accessible, providing people with a reliable source of protein. Additionally, removing the value-added tax on chicken feed could lower the input costs for farmers, resulting in lower prices for consumers.
By advocating against dumping and promoting fair trade, the South African poultry industry can provide local communities with reliable protein. Additionally, the poultry industry can tap into the global market by exporting their chicken. While it does take time and money to bring formal anti-dumping applications, the world should be more alert to predatory trading practices according to Baird.
Baird told The Borgen Project that “We are very determined that the world trade system should take account of the impact of predatory trade practices on poverty and on development.”
– Abigail Turner