Sa Poultry Producers Escalate Tariff Rebate Concerns

South African Poultry Association (Sapa) executives escalated the operational challenges facing the poultry industry to Trade Industry and Competition Minister Ebrahim Patel at a meeting last week.

SAPA Broiler Organisation general manager Izaak Breitenbach said the meeting, which was also attended by International Trade Administration Commission (Itac) officials, Marthinus Stander of Rainbow Chicken, and Richard Manzini of Daybreak Farms as part of the SAPA delegation, had focused on two matters of concern to local broiler producers.

These were the governments tariff rebates on chicken imports that were introduced as a safeguard to potential shortages on the back of bird flu outbreaks, and the recently announced Competition Commission market enquiry into the poultry market value chain.

We appreciate the reason that the tariff rebates were published, which is to address a potential shortage of chicken on the market. However, our data indicates that there has not been and is no shortage in the supply of chicken to the market, and thus there is no need for the rebates to continue, said Breitenbach.

He said it was agreed at the meeting that the industry would submit updated data to the International Trade Administration Commission (ITAC) which administers the rebates, and to the Department of Agriculture, Land Reform and Rural Development, which must certify any shortage.

We will do this urgently, as a decision will soon be made on whether to continue the rebates in the second quarter, which begins next month, said Breitenbach.

ITAC has estimated a shortage of 172 000 tonnes of chicken in 2024 and plans to address this with rebates of 43 000 tonnes each quarter. The scheme can be discontinued if it is found that there is no shortage.

The meeting allowed all parties to hold frank discussions, and a good understanding of the respective viewpoints was achieved with mutual commitment and agreement on the way forward. The industry shared insights into how it has been able to mitigate any shortages in the supply of chicken through multiple contingency plans introduced, said Breitenbach.

This included the importation of broiler hatching eggs over the past six months. The industry also reaffirmed its commitment to fully participating in the poultry market enquiry, saying it would use the opportunity to highlight the strategic importance of the industry to local food and job security.

As a stakeholder to the poultry sector masterplan, the industry has committed significant investment in capacity to the long-term localisation of poultry production in South Africa.

Minister Patel recognises the operational challenges faced by local poultry producers in recent times, including the energy shortage, but confirmed his commitment to seeing a profitable and diverse industry by partnering with all stakeholders to the poultry sector masterplan, said SAPA Broiler Organisation chairperson Gary Arnold.