•••• NEWS
Dumping – a worldwide problem affecting South Africa
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DUMPING IMPACTS SOUTH AFRICA ’ S GRAIN PRODUCERS , WITH THE POULTRY INDUSTRY THE LARGEST COMPONENT OF OUR AGRICULTURAL SECTOR . SCENARIO ASKED FRANCOIS BAIRD , FOUNDER OF THE FAIRPLAY ANTI- DUMPING MOVEMENT , TO EXPLAIN ITS IMPLICATIONS .
FRANCOIS BAIRD EDITED BY AUBREY KRUGER
The threat to the South
African poultry industry by dumped chicken imports has highlighted a nasty trade issue affecting countries and industries worldwide .
Dumping is a predatory trade practice that can put producers out of business . Foreign producers sell surpluses at below cost , or below their “ normal price ”. It is sold here at huge profits , but prevents local producers from recovering input costs .
The local industry is being eroded . Small producers go out of business and larger operations cut production and restructure . When the local industry collapses , importers control the market and have pricing power .
Thousands of jobs have already been lost and more are at risk . With one of the highest unemployment rates , dumping imports misery and exacerbates poverty , endangers food security and national security if the price of food becomes unaffordable .
Steel , textiles and sugar are other products where dumping occurs . The EU has raised barriers against dumped steel imports from China . The US has acted against dumped sugar from Mexico , etc .
AUG / SEP 2017 • SENWES Scenario
Dumping is not fair trade and not fair competition . The South African poultry industry has been shown in an independent survey to be far more efficient than the EU , but cannot compete against dumped EU chicken . EU countries subsidise their poultry industries and agricultural input costs .
Dumping contravenes the rules of the World Trade Organisation ( WTO ). The remedies , usually increased tariffs , are to protect industries and allow recovery . In South Africa those remedies have been slow . The country was targeted because it remained open when other countries closed their borders to protect local industries .
Some tariff increases have been granted , but are not enough . Further increases have been applied for and a decision is expected soon .
The loss of 1 350 jobs in KwaZulu-Natal sparked an outcry which focused government and business attention on chicken dumping . Government , the poultry industry and trade unions are part of a task team proposing further measures to protect jobs .
Measures are needed urgently . Avian influenza outbreaks in Europe have temporarily halted chicken exports , but dumping will resume when export bans are lifted . South African production has been limited slightly by two isolated bird flu outbreaks . An HPAI outbreak in June in Zimbabwe was followed by those in South Africa . The first outbreak amongst chicken in South Africa with previous outbreaks being restricted to ostriches .
A statement by the G20 countries recognised the right of countries to implement “ legitimate trade defence instruments ” against unfair trade practices . Less welcome is that there has been little sign that the EU – source of 80 % of dumped chicken portions in South Africa – intends heeding the warning in its own Sustainability Impact Assessment of its Eco nomic Partnership Agreements with countries in Africa and elsewhere .
The report noted that EU exports had the potential for “ damage to local production that could disproportionately threaten the livelihoods and food security of rural populations .”
Poultry is the largest component of our agricultural sector , contributing 18 percent of agricultural GDP in 2016 , and 39 percent of animal product gross value .
The industry employs 110 000 people . If it collapses , 20 000 more jobs would be at risk in the grain industry – poultry producers buy almost half of South Africa ’ s maize and nearly all soya . Logistics and supporting industries in the value chain would be hit . Dumping must be stopped .
Only government can act to impose tariffs and regulatory constraints on dumping ; while affected industries can take hands to support the campaign against dumping . For more information visit www . fairplaymovement . org .