Opinion / 18 December 2019, 10:30am / Paul Matthew
JOHANNESBURG - In a column titled “SA trade policy is a dumping gateway to our neighbours” (December 9), fair trade advocacy movement FairPlay pointed the finger at South Africa’s exporters for “allowing chicken imports to cause untold damage to the poultry industries, and the economies of (South Africa’s) neighbouring countries”.
The movement identifies unscrupulous importers and exporters who have exploited South Africa’s inadequate regulation and policing regime to “dump” imports in neighbouring states, thereby endangering the chicken industries in those countries.
AMIE, the acknowledged voice of meat and poultry importers and exporters in South Africa, finds this sentiment deeply troubling Not least because of the unwarranted aspersion it casts on all importers and exporters.
It is also highly concerning because it assumes - and peddles the notion - that protectionist tariffs and duties will protect the chicken industries of South Africa and its neighbours.
The issue of duties and tariffs is a highly emotive one which has long divided - and paralysed - South Africa, generally to our detriment.
The position of FairPlay and other players in the sector that tariffs will protect the broiler industry is without foundation and merit. Research into the impact of trade and trade protection on the broiler industry and the broader South African economy finds that it does the opposite of what tariff proponents argue it will.
It harms the South African broiler industry - and South Africans - more than it helps. The study, commissioned by AMIE and carried out by global multi-disciplinary business advisory group FTI Consulting, found that, despite almost continued tariff protection granted to South Africa’s poultry producers over the past decade, domestic broiler production remained flat in spite of increasing consumer demand.
Protection appears to have reduced - not increased - the incentive for domestic producers to find solutions to the problems it faces and encourage competitiveness.
Import protection, the study concluded, not only has a net negative impact on jobs across the economy, but also leads to losses in economic welfare and gross domestic production (GDP).
With load shedding causing untold misery for South Africans, SAA in business rescue and unemployment unacceptably high, South Africa Inc does not need another industry to self-destruct through self-defeating protectionist measures.
As indicated, FairPlay’s identification of exporters as being hindrance rather than a help is also incredibly unhelpful.
While AMIE does not pretend that there might not be unscrupulous exporters out there as there are in any industry, the majority are law-abiding entities who do not flout the law, engage in round-tripping or other tax-evasion practices, and do not export chicken to South Africa’s neighbours.
Exporters and importers are a vital part of South Africa’s broiler value chain, employing tens of thousands of South Africans and contributing to South Africa’s GDP.
Exporters also have much-needed expertise and understanding of international markets and import/export regulations, which will be vital for South Africa’s broiler industry to identify and expand into new markets.
Emphasis needs to move from differences between producers and importers to creating a shared future in which all parties have opportunities for growth.
We all need to pull together, rather than in different directions.
This is the beauty of the poultry master plan.
The master plan is an industry framework that resolves several structural and other problems within the industry.
The master plan has identified “five pillars” that are instrumental to grow South Africa’s broiler industry.
The first pillar includes the establishment of partnerships to increase production and availability of feed, while simultaneously ensuring that workers are provided with training and development opportunities.
The second pillar entails driving domestic demand and the affordability of local broiler products.
The third concerns the establishment of the safety and veterinary requirements within markets and offering producers opportunities for exporting their chicken products.
The fourth introduces measures to enhance the regulatory environment and ensure compliance. This includes making products traceable and announcing measures to ensure that the industry as a whole complies with trade requirements.
The final pillar aims to protect the local chicken industry by considering specific, rather than ad valorem tariffs; simplifying trade systems; undertaking anti-dumping measures where appropriate; and considering the introduction of import licenses to support compliance.
AMIE fully supports the master plan. We also welcome FairPlay’s support for the plan and its implementation.
We believe that only such unity of purpose and action will allow South Africa to refocus and build its future. We therefore call on all parties to desist from finger-pointing, mudslinging and casting unwarranted aspersions - and to instead work together in the interests of the industry and South Africa.
Paul Matthew is the chief executive of the Association of Meat Importers and Exporters (AMIE).