The Emerging Black Importers and Exporters of South Africa (EBieSA) is calling on the domestic poultry industry to urgently implement the transformation commitments contained in the Poultry Master Plan.

Unati Speirs, chairperson of EBieSA says, “To date, far fewer than 50 black contract farmers have been helped to secure access to market, a pitiful number when compared to the vast number of black farmers in South Africa.  These desperate farmers are unable to open the door, because the key is being held by a small group of oligopolistic white-owned producers who are doing virtually nothing to transform their own ownership.   

This is despite what was agreed on in the Poultry Master Plan, and which was signed by the local poultry industry and the President of South Africa. As soon as any measure to drive transformation is raised, the local industry counters this by saying it will lead to job losses. We see this as nothing more than a diversion strategy and amounts to blackmail.”

Speirs is also member of Poultry Master Plan Pillar 2 and Transformation Committee, and the Head of Lobbying and Advocacy for the Farmers’ Association of South Africa. 

EBieSA has also made a submission to DTIC, warning that further tariffs on imports could impact food security for the poorest of the poor. The submission was made in response to DTIC’s Poultry Tariff Structure Review. 

Speirs says, “We are afraid that DTIC’s new poultry tariff structure could increase tariffs through specific tariffs rather than ad valorem, which could further increase applied tariffs more than the current bounded tariff of 82%. Specific tariffs are not preferred as they would be for certain cuts or from certain sources and potentially exceed the bounded rate.

“As a result of the domestic industry failing to transform and grow the domestic industry, South Africa has to import chicken to meet the protein needs of the country. Poultry imports allow low income families to access protein. We are generally opposed to any tariff increase, as it places an unnecessary cost burden on consumers.  Adding any additional restrictions or measures will have a further negative impact on price for consumers who are already under significant financial pressure. We know that imports provide critical price competition that mitigates against market consolidation and price increases for consumers.  Without them, domestic producers can raise their prices at will.  This is a matter of great concern to the DTIC.” 

“The role of widening the production and supply of poultry to include small scale black farmers and imports becomes even more critical when the country is faced with a crisis such as that of Avian Influenza (AI), which is currently spreading across the country. The spread of AI, if left unchecked, will lead to the mass culling of birds, which will lead to a constrained market where prices will undoubtedly increase.  This serves nobody, but especially the poor South African consumer.”

The DTIC recommends that there is an 80/20 split between locally produced and imported goods.  The poultry industry is already compliant in this regard.  Currently, South Africa only imports 20% of poultry consumed in the country, a vast proportion of which is mechanically deboned meat (MDM), which is not able to be produced in substantial amounts in South Africa.  Imports are necessary as domestic producers are not able to produce enough volume to meet consumption demands.  

Imports under quota from the USA are limited to 70,000 mt p.a, which constitutes 50% of bone-in imports. This means that non-USA imports are split between MFN countries and the EU. There is a zero percent duty on imports from the EU, and exports to the EU, due to the European Partnership Agreement (EPA) between the EU and South Africa. 

Speirs says, “The impact of the initiatives contained in the Poultry Master Plan need to be carefully weighed up against the impact of the increase in MFN duty rates levied in March 2020 (from 37% to 62% for bone-in cuts and 12% to 42% on boneless cuts) and the impact of Covid-19 on the local and global economies locally.  These factors have distorted the chicken market.  It is thus critical that the market is allowed to settle and understand the true impact of the increased tariff regime before there is any consideration given to any further changes or modifications to the tariff structure.”