The recent signing of the poultry industry master plan by trade, industry & competition minister Ebrahim Patel together with representatives of the poultry industry, importers, trade unions and other stakeholders is a critical initiative that will help achieve coherence and stability for this strategic industry. However, the real battle for survival will be decided by how SA gets to grips with the multiple and complex challenges of international trade.
It starts with the fact that agricultural trade is the least free trade in the world. Many countries offer support to their farmers and food-processing industries for reasons that range from food security to the political clout rural communities still have in many older democracies. All too often, these concerns have more to do with domestic agendas than actual health issues. Citrus black spot, which the EU uses to keep SA citrus out of their markets, is a case in point. While import restriction measures such as these may not always be permanent, their effect on exporters is real as it leaves them with fewer export destinations.
As part of the new poultry-industry master plan, the SA poultry and grain sectors have now come together to increase production of both chickens and grains and decrease feed prices for producers to further increase the efficiency of the SA poultry sector. Poultry producers also plan to work with retailers to package cheaper brown meat to reduce prices to consumers.
Other indicators, from the currency to inflation and particularly the price of protein, will also be affected. Once a country has no more local poultry production due to dumping, as has already happened in some African countries, the exporting countries will revert to charging actual cost of production plus transport of the product — countries that are small poultry producers with high import volumes generally have far higher retail prices.