03 August 2022

Why is Minister Patel abandoning his signature master plan?

Submitted by Matimu Define Mabunda
Why is Minister Patel abandoning his signature master plan?

Statement by Francois Baird, founder, FairPlay

Trade, Industry and Competition Minister Ebrahim Patel made a poor decision to open the SA poultry market to unhindered dumping. He should seek expert opinion and then rescind his decision to delay for 12 months the implementation of anti-dumping duties on chicken imports from Brazil and four European Union countries.

The Minister based his decision on a supposed concern that anti-dumping duties on these five countries would raise the price of chicken, particularly for the poor.  His concern is wrong and misplaced; experience shows that higher import tariffs have little or no effect on chicken prices for consumers but helps create SA jobs.

What the delay will do is to negate the progress that has been made in implementing the poultry master plan, which Minister Patel has driven since he signed it in 2019. By inviting Brazil and other countries to dump as much as they like in the next 12 months, Patel has left exposed the poultry producers who signed the master plan in good faith and with high hopes.

SA producers have invested some 1.5 billion in expanded production based on the master plan’s objective to curtail imports by acting against dumping. Now Minister Patel’s year-long delay gives five countries a huge incentive to flood South Africa with dumped chicken products for the next 12 months. They have Patel’s licence to dump, and they are likely to use it.

The result will be job losses, and job creation postponed, in the local chicken industry, and in particular small-scale black poultry farmers.

At the moment, this licence to dump applies only to Brazil. The four EU countries – Denmark, Ireland, Poland and Spain – cannot export to South Africa because of bird flu bans. Those bans are temporary, however, and may well be lifted long before the 12-month “duty-free” period is up.

The unintended consequences of Minister Patel’s poorly conceived decision are increases in unemployment and misery in already impoverished rural areas. He needs to rethink, reconsider, and reverse his decision.

If he really wants to help the poor, Minister Patel should urge his cabinet colleagues to remove the 15% value-added tax from the chicken portions most consumed by low-income households. And he should encourage importers, wholesalers and retailers to pass on to consumers the benefits of low-priced and dumped imports.

Chicken dumping has made the middle men rich, but it has not aided the poor. And now, thanks to Minister Patel’s decision, for the next 12 months profits for importers will keep rolling in at the cost of South African jobs.

1 August 2022

Published in Agricultural

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