Senwes Scenario Augustus / September 2017 | Page 52
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NEW S
Dumping – a worldwide
problem affecting South Africa
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
T
he 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 unem-
ployment 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.
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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 coun-
tries subsidise their poultry indus-
tries 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 target-
ed because it remained open when
other countries closed their bor-
ders 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 poul-
try industry and trade unions are
part of a task team proposing fur-
ther measures to protect jobs.
Measures are needed urgent-
ly. Avian influenza outbreaks in
Europe have temporarily halted
chicken exports, but dumping will
resume when export bans are lift-
ed. South African production has
been limited slightly by two iso-
AUG/SEP 2017 • SENWES Scenario
lated 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 pre-
vious 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 wel-
come 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 Econo
mic 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 compo-
nent of our agricultural sector,
contributing 18 percent of agricul-
tural GDP in 2016, and 39 per-
cent 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.