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Poultry Sector Seeks Government Aid

31 May 2013

SOUTH AFRICA - The government must come to the aid of South Africa’s poultry sector through providing long-term support including subsidies, if farmers are to withstand the steep rise in cheap chicken imports.

BusinessDay reports that this is according to Kevin Lovell, CEO of the South African Poultry Association in an address to its annual Avi Africa conference in Johannesburg on Wednesday (29 May).

Mr Lovell’s comments come as the industry is appealing for protection from Brazilian exports which they consider to be dumping.

Mr Lovell said state intervention would have to be on the same principles as its support for the motor industry. "We need a comprehensive strategy with long-term support. The state has to be a direct participant, otherwise things won’t change."

South Africa imported 265-million chickens a year. "That is 265-million chickens that could be grown in South Africa," Mr Lovell said.

Poultry imports contributed 4 per cent to the country’s trade deficit.

Mr Lovell further said five small and medium-sized farms had closed in the past 18 months, taking 2,000 jobs with them. Larger producers have shed 3,000 jobs.

Government intervention was the only way an investment into the local poultry industry could be successful, Mr Lovell said.

However, the South African Association of Meat Importers and Exporters would support subsidies if they were export-based, according to CEO David Wolpert. He believed better state support would grow South Africa’s ability to export.train rails

"But we will object to protectionist policies because we don’t believe they work. The poor are going to end up financing this."

Mr Lovell conceded to Business Day that locally produced chickens would be more expensive. However, a locally supported poultry industry would bring social benefit to South Africa by generating new jobs and skills.

Poultry producers were still the largest segment of the local agricultural sector. It accounted for 17.4 per cent of all agricultural production and 37 per cent of all animal products. Mr Lovell said the industry was already working with several state departments to develop a strategy to address the growth of the sector. Special attention would have to fall on emerging farmers, who produced a fraction of the output of large producers.

They could not compete and the government would have to consider special exceptions and subsidies for them to survive.

The poultry association had taken its objections to imported chicken to the International Trade Administration Commission, which gazetted its tariff review application last month.

ThePoultrySite News Desk

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