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Agriculture department prefers 'measured approach' to poultry industry crisis

23rd March 2017

By: African News Agency

  

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The department of agriculture preferred a more measured approach to dealing with the crisis in the South African poultry industry as opposed to the “trade war” with the European Union proposed by the Food and Allied Workers Union (Fawu), MPs were told on Wednesday.

“As a department our view that any measure that is to be taken from the department’s point of view…has got to take into cognisance the provisions of the WTO [World Trade Organisation], specifically to agreements on phytosanitary measures and other on technical barriers to trade…,” said Mooketsa Ramasodi, department deputy director general for agricultural production, health and food safety, while briefing Parliament’s portfolio committee on agriculture along with Agriculture Minister Senzeni Zokwana.

“As long as it’s [trade war] in those confines, we will be comfortable.”

Less than two weeks ago, Fawu briefed MPs on the crisis, saying more than a thousand jobs had already been shed due to the EU selling breast portions to their member countries at premium prices and “dumping” leg quarters in South Africa at “ridiculously low prices”.

The unions wants South Africa reciprocal measures to be imposed on the EU, saying the country may have no choice but to implement technical barriers for chicken coming from Europe “in the same way they are doing for our chicken going into their shores”.

Zokwana suggested the crisis, which Fawu believes could lead to tens of thousand of job losses, was due to a number of problems including high input costs, last year’s drought, the low production of one day chicks, and “dumping”.

“We seem to be a dumping field for different countries in terms of brown meat, which they call in-bone meat from the EU, from America, so those compound the situation so that poultry industry is under strain,” Zokwana told MPs.

“Most of the companies, especially in KwaZulu-Natal, are on the verge of being run down.”

Responding to calls to raise tariffs and impose anti-dumping duties, Ramasodi said the government had in December last year implemented a “safeguard duty of 13.9% on all bone in portions from the EU”.

The department denied that it was letting chicken from the EU, which recently experience a swine-flu outbreak, into South Africa without ensuring that the imports were in line with international phyto-sanitary standards.

Responding to claims by the South African Poultry Association (Sapa), Ramasodi said while the department disagreed with some of its short and long term aspirations like reducing imports by half because “imports were a necessary evil” as the country also trades in other commodities, it did agree on some suggestions.

“There were proposals that came, specifically dealing with disease management coming from Sapa which we agree with…and also the development of what is called a Poultry Disease Management Agency which we welcome which gives us way of leveraging private sector funds…”

Ramasodi said the poultry sector task team, comprising of representatives of the department of trade and industry, the departments of economic development, agriculture, forestry and fisheries, the Industrial Development Corporation, Poultry South Africa, and Fawu, and was meant to find ways to resolve the crisis, had not yet completed its work.

On March 10, Fawu had informed Parliament that South Africa’s biggest poultry company, Astral Foods, had reduced hours for workers and closed some shifts, reducing the weekly pay of its employees instead of retrenchments.

At Rainbow chicken, the second biggest poultry company in the country, 1,350 jobs were lost due to the firm closing some of its farms in KwaZulu-Natal and down-scaling of its processing operation. The third biggest company, Country Bird Holdings, had announced the closure of three of its abattoirs, meaning several hundred workers are likely to be laid off.

Parliament’s portfolio committee on trade and industry is set to hold public hearings on the poultry industry on Thursday.

Edited by African News Agency

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