By Paul Matthew
Access to affordable and high-quality protein is important in South Africa. For all except the affluent households, that protein is chicken.
Why then do punitive tariffs chicken imports loom when the local poultry industry cannot supply demand?
Only for affluent households is beef the meat that most food money is spent on. Low-income households spend 13%, lower middle-income household 14%, and upper middle-income households 12% of the food budget on chicken.
The threat comes from the looming reinstatement on August 1, of paused anti-dumping duties (ADDs) on bone-in chicken. Imported bone-in chicken, particularly from countries like Brazil, South Africa’s largest importer of chicken, plays a pivotal role in ensuring food security in the country. In recent years, consumption of white meat has clearly outstripped production.
The domestic poultry industry clearly cannot meet the growing demand for this source of protein, making imports an integral part of the nation's food supply solution. By diversifying the range of poultry products available, imports serve as a reliable source of high-quality protein, essential for the health and nutrition of the population. Imposing tariffs on these imports disrupts the delicate balance of the food supply chain, putting at risk the achievement of food security objectives.
Prioritising consumer welfare is paramount. Protectionist measures, such as ADDs, aim to shield domestic industries but too often at the expense of consumer affordability and choice. Tariffs can result in reduced market competition, limited consumer options, and inflated prices, disproportionately impacting vulnerable households and exacerbating existing inequalities. Balancing the need to develop domestic industries with the importance of ensuring immediate, affordable access to high-quality protein is crucial.
What is needed is a comprehensive approach that goes beyond import restrictions. Policymakers must find ways to enhance domestic production, foster market competitiveness, and optimize supply chain management.
Moreover, structural weaknesses in the economy cannot be ignored. The ongoing energy crisis affects all sectors including the value chains supporting the poultry industry. A holistic approach is needed that promotes a sustainable and inclusive industry that ensures affordable access to high-quality protein for all South Africans. The public and private sector could join forces to developing optimal conditions for a domestic export industry, while ensuring that imports continue to contribute to food security. These two solutions are not mutually exclusive.
As the Department of Trade Industry and Competition makes the decision on whether to reimpose ADDs on poultry imports in August 2023, transparent and evidence-based decision-making is key to formulating fair trade policies. Common ground can be found through constructive dialogue among industry stakeholders, consumer advocates, and policymakers.
Suspension or cancellation of ADDs on bone-in chicken imports are necessary to ensure accessibility to affordable protein sources. Such punitive instruments only serve to alienate our trading partners. By adopting evidence-based policy recommendations, promoting informed decision-making, and prioritising consumer welfare, South Africa can create a trade environment that safeguards both the industry and the well-being of its consumers.
Paul Matthew is the CEO of the Association of Meat Importers and Exporters.
BUSINESS REPORT