The South African Poultry Association (Sapa) on Friday warned that up to 20 000 jobs could be lost in the domestic poultry industry, as producers would have to resort to retrenchments to mitigate the impact of operational challenges caused by a flood of low-quality chicken imports from Brazil and the European Union (EU).

Sapa CEO Kevin Lovell said in a statement that government would have to act decisively to clamp down on the import of cheap chicken, which he said had a devastating impact on the local market.

“Local poultry producers are losing tens of millions of rands every week. In the last 18 months, five small to medium-sized poultry farms have closed or are in business rescue proceedings, with more than 2 000 jobs lost. Larger poultry producers shed a further 3 000,” he stated.

Lovell added that imports into the South African meat market amounted to over 260-million chickens.

“Should this continue, another 20 000 jobs will be lost in the short term, with fresh investment drying up and no new jobs created. As the poultry industry accounts for around one-third of local maize consumption and almost all soya consumption, the rural economy, its sustainability and future development are also at risk,” he warned.

Further, Lovell said the tariff increase on leg quarters, which was the bulk of imports, was only 30%, with no increase on the mechanically deboned meat used in sausages and polonies.

In March, Sapa applied for an increase in import duties, which the Association of Meat Importers and Exporters (Amie) opposed, stating that the hike could be up to 82%.

“If importers act responsibly and retailers remain price competitive, we estimate consumers will pay 15% more at the most. Tariffs have no direct effect on the price of local chicken,” Lovell indicated, warning, however, that the current tough economic circumstances might make it difficult for hard-pressed consumers to pay more for chicken.

Sapa senior executive Sol Motsepe emphasised that, although imported chicken appeared to be cheap, it was, in reality, quite costly to the country’s economy, not only for jobs, but also in terms of food security.

He said South Africa was among the most unprotected markets in the world, allowing Brazil and the EU “to dump massive quantities of cheap chicken.”

Other countries imposed significant tariffs to protect their industries, with Brazil, for example, effectively closing their market to South African exports, despite exporting vast quantities of chicken to South Africa.

The EU imposes a tariff of between R5/kg and R12/kg, Canada applies a 249% tariff on most imports, while Norway and Mexico impose 306% and 234% tariffs, respectively.

“A slight possible increase in the price of some chicken products is a small price to pay for saving an industry, protecting and creating jobs and, most importantly, safeguarding our nation’s food security,” Motsepe urged.

Meanwhile, the International Trade Administration Commission (Itac) has granted Amie hearings that would take place next week, during which representatives would be allowed to make proposals regarding tariff increases for imported chicken meat.

Sake24 reported that Amie spokesperson George Southey dismissed claims of imported chicken meat having a dire impact on the local market, when he indicated this week that the South African Revenue Service’s import statistics and the financial results of Sapa’s members revealed good growth and profit in the industry.

Amie CEO David Wolpert attributed the loss of jobs in the local chicken meat market to its mechanisation. He also told media that the notion that the local meat market was not being impacted by imports was backed by the fact that 12% of all chicken sold in South Africa was imported, hardly rendering it an import-dominant industry.

Amie further put forward that consumers preferred imported chicken, as local chicken meat comprised up to 30% water, notably higher than the Department of Agriculture, Forestry and Fishieries’ recommendation of between 4% and 8%.

However, Motsepe encouraged consumers of local chicken, not be misguided by what he referred to as Amie’s “smear media campaign to misinform the public about the quality of our chicken and imminent price increases.”

Meanwhile, Southey had indicated that it would be difficult for Amie to deliver its comment at Itac, as it, as well as Sapa, had refused to divulge information on which it based its findings that the local chicken meat industry was in dire straits.

In this regard, Amie would, on June 18, file an application in the High Court in Pretoria against Itac’s chief commissioner and Sapa to access this information and inspect the grounds of Sapa’s application for higher import duties.