The South African Poultry Association (SAPA) 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 by-products 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 fight dumping by big market players.
Our neighbours to the north have a small chicken industry compared to ours that 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 will soon 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 the 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 source to invest in developing a home-grown chicken industry. This economic growth potential is now endangered by the actions of the Brazilians. This follows a pattern that saw domestic chicken industries in other African countries all but wiped out by dumped imports. In Ghana, what remains of the chicken industry holds only 5% of the market, with imports claiming the rest.
SAPA feels that the time has come for southern African countries to stand together against this onslaught from Brazil, a country known to be one of the biggest exporters of chicken in the world, which targets this region with bulk exports of unwanted brown meat. Brazil’s northern hemisphere clients prefer breast meat which means the Brazilians can sell the top half of the chicken at premium prices that guarantee their profits without the need to make a margin on the remainder of the carcass. The fact that Brazil can price these leftovers to rock bottom skews any market where the leg quarters are dumped.
South Africa’s chicken industry has been proven to be globally competitive, even without the benefits of the substantial agricultural, and other, subsidies that enable 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 top of mind, 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. All the more reason then for the South African and Namibian governments to crack down as the EU and Saudi Arabia have done, to protect their citizens from potentially contaminated food.
The Namibian industry is calling for drastic action, and they have SAPA’s full support. SAPA members have already joined other producers in the Southern African Customs Union (SACU) in making an application to the International Trade Administration Commission (ITAC) for an 82% import tariff to be imposed on Brazil, among a number of other countries. The granting of this tariff would give South African producers some room to breathe, while SAPA works with the government on a plan for transformation and growth in the industry.
Once thriving chicken industries in other African countries have gone to the wall. From Ghana to Namibia, small, vulnerable African nations need help in standing up against big market players like Brazil, to save jobs, encourage small farmers and protect the health of their consumers. The current Namibian experience proves that Brazil is now targeting multiple markets with identical formats and prices. This is intentional predation that needs to be addressed as a matter of urgency. Tariffs might be a deterrent, but it is time that South Africa, Namibia and other African neighbours collaborate to stave off an unfolding crisis in southern Africa. The African Union would do well to formalise a strategy by setting up and funding an African Poultry Producers Organisation to consolidate the efforts of all countries. – Press release