Temporary suspended anti-dumping poultry duties are just that – a temporary measure

Growth in domestic poultry production is being hampered by competitiveness and efficiency challenges in the poultry value chain. Photo: Supplied

Growth in domestic poultry production is being hampered by competitiveness and efficiency challenges in the poultry value chain. Photo: Supplied

Published Mar 11, 2024


By Sifiso Ntombela

Poultry products, that is meat and eggs, are an essential source of affordable and nutritious animal protein for the majority of South Africans, in particular the low- and middle-income households.

South Africa is currently a net importer of poultry meat, implying the country does not produce sufficient volumes to satisfy local consumption. Imports account for roughly 20% of domestic consumption, and imports have been gradually declining in recent years underpinned by effective safeguards measures. These measures include anti-dumping duties imposed against certain countries that distort the domestic market. The decline in imports can also be attributed to local investment fuelled by the implementation of the Poultry Master Plan.

While protecting domestic producers against trade distortion practices is crucial for the sustainability of the poultry industry, safeguarding the competitiveness and efficiencies in the local poultry industry are equally important.

Since the adoption of the Poultry Master Plan, there have been positive sentiments in the industry, which triggered a rise in investments in local production and creation of jobs.

However, the growth in domestic production is being hampered by competitiveness and efficiency challenges in the poultry value chain.

At the apex of challenges are the rising input costs, which affect the competitiveness of the local industry. Globally, the price of raw feed materials such as oilseeds and maize has been impacted by global conflicts, which constrained supply and tempers with trade flows.

As a result of global constraints, the world poultry price increased sharply to reach a peak in mid-2022, but since then it has gradually declined. Similarly, domestic poultry prices rose sharply for most of poultry products between 2022 and 2023.

The outbreaks of avian flu do compound the availability of poultry products and tend to have long-term effects on farmers’ income. In 2023, the South African poultry industry, in particular eggs, experienced significant losses due to the outbreak of the avian flu virus. Adding to the hardships of the poultry industry in the country is the persistent issue of electricity supply, which remains a thorny problem for farmers. The launch of the Agro Energy Fund is a welcomed intervention to incentivise farmers to invest in alternative energy sources.

There is a need to prioritise the growth-stimulating measures in the industry to ensure that competitiveness and efficiency gains are sustained. In the main, access to affordable finance for farmers to rebuild their poultry flock following the outbreak of avian flu in 2023 is important. This can be achieved through the blended finance scheme and other funding solutions that are innovative and accessible to all farmers. Parallel to the blended finance is the provision of the Agro Energy Fund to help farmers invest in alternative energy sources.

Over and above access to finance is the issue of water supply. Access to clean and reliable water is increasingly becoming a challenge for farms and agribusinesses. Deteriorating water infrastructure underscored by limited new investments and poorly maintained existing water infrastructure is part of the problem. To address the water challenge, municipalities and water authorities must invest in the maintenance, repair, and expansion of the water infrastructure, prioritising the supply to farms for food security purposes.

Parallel to addressing the finance, electricity and water issues is the need to continue supporting the industry against the unfair competition from the subsidies or dumped imports.

In recent months, the imports of chicken meat have surged on the back of temporary suspended ant-dumping duties. The outbreak of the avian flu also compelled breeders to import fertile eggs to rebuild the breeding stock. While rebuilding parental stock is important, this should not impact the growth of the domestic market.

Sifiso Ntombela (PhD) is an agricultural economist. He serves as the Special Adviser to Minister Thoko Didiza, in the Department of Agriculture, Land Reform and Rural Development. He is also an elected President of the Agricultural Economics Association of Southern Africa.