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SAPA supports Namibia against dumping from Brazil

The South African Poultry Association has noted with alarm that the insidious dumping of chicken from Brazil that plagues the local industry has also taken root in Namibia.

It is increasingly clear that Southern Africa is now in the crosshairs of exporters looking for markets for the unwanted leg quarters that are the byproducts of their lucrative breast-meat exports to the US and Europe. Given similar experiences with the effects of chicken dumping in West Africa, it may be necessary for Africa to stand together to fight dumping from big market players.

Our neighbours to the north have a small chicken industry compared to ours and is even more vulnerable to the devastating effects of uncontrolled dumping, which poses serious risks even to a robust industry. As the South African experience proves, job losses are soon to follow, but what is worse is that the investment in a new industry that Namibia embarked on only six years ago, might bear no more than stunted fruit once this predatory trade practice wipes out any possibility of industry expansion and development.

After historically being a net importer of chicken, Namibia was encouraged by the increase in demand for this popular protein to invest in developing a home-grown chicken industry, and this economic growth potential is now endangered by the actions of Brazil. This follows a disgraceful pattern that saw local chicken industries in other African countries all but wiped out by dumped imports. In Ghana, for instance, what remains of the chicken industry holds only five percent of the market, with imports claiming the rest.

We believe that the time has come for Southern African countries to stand together against this onslaught from Brazil, which is one of the biggest exporters of chicken in the world, and which targets this region with bulk exports of unwanted brown meat. Brazil’s northern hemisphere clients prefer breast meat which enables it to sell the top half of the chicken at a premium guaranteeing their profits, without a care about making anything on the rest of the carcass. The fact that Brazil can adjust prices for these leftovers to rock bottom skews any market where these leg quarters end up being dumped.

South Africa’s chicken industry has been proven to be globally competitive, even without the benefits of massive agricultural and other subsidies that enables Brazilian producers to claim their high productivity. Unlike South Africa, which has never exported chicken below production cost, Brazil has no qualms about invading other markets to the detriment of local industry.

Brazil’s high productivity comes at a price and that price is compromised food safety. The “Weak Flesh” scandal in which food-sanitation inspectors were bribed by a leading Brazilian chicken producer to look the other way is still fresh in the memory, and recent news of a salmonella scare leading to the recall of a consignment of chicken meant for the export market keep the red flags waving high. All the more reason for the South African and Namibian governments to crack down, as the EU and Saudi Arabia have done, in order to protect their citizens from potentially contaminated food.

The Namibian industry is calling for drastic action, and they have the full support of the SA Poultry Association. Our members have already joined other producers in the Southern African Customs Union (SACU) in making an application to ITAC for an 82% import tariff imposed on Brazil, among a number of other countries. The granting of this tariff would give South African producers some room to breathe, while we work alongside Government on a Master Plan for transformation and growth for the industry.

Already, once thriving chicken industries in other African countries have bitten the dust. From Ghana to Namibia, vulnerable, small African nations need help to stand up against big market players like Brazil, to save jobs, encourage small farmers and protect the health of their consumers. The experience in Namibia proves that Brazil is now targeting multiple markets with identical formats and prices, and this intentional predation needs to be addressed as a matter of urgency. Tariffs might be a deterrent, but it is time that South Africa, Namibia and our other African neighbours collaborate to stave off an unfolding crisis for Southern Africa. The African Union would do well to formalise a strategy by setting up and funding an African Poultry Producers organisation to consolidate all efforts.

Source: SAPA

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