Protective poultry industry shows South African weaknesses

Poultry prices in South Africa could soon jump 50 percent, pushing some low-income consumers away from their favorite white meat.

JOHANNESBURG -- Chicken is served everywhere in South Africa. It's one of the only foods that can be found throughout this disparate country, from the Muslim suburbs outside of Durban to the pulsating ‘Shisa Nyama' barbeque shops in nearly every black township. On average, South Africans households consume as much of the bird as almost any other nation on earth -- Americans edge out the country by only two pounds a year. Yet structural weaknesses in the South African food market and political infighting could soon see a 50 percent increase in the cost of the poultry here, pushing some low-income consumers away from their favorite white meat.

Last week the local Association of Meat Importers and Exporters (AMIE) went to the High Court in Pretoria in an effort to stop the increase. They aimed to block a tripling of the current tariffs on imported poultry proposed by South African producers.

The South African Poultry Association has said that the increase is necessary to protect 20,000 local jobs from foreign companies that import low-quality, cheap chickens. The group also says local producers are threatened by a lack of trade agreements with other nations. South Africa only exports poultry to Mozambique, Zimbabwe, Angola and the Democratic Republic of the Congo.

Opponents of the tariff argue that local chicken producers are scapegoating foreign fowl, which make up only 15 percent of the market. David Wolpert who heads the meat importers and exporters association, said that the tariff is an "effort to blame imports for [the local chicken industry's] self-created woes and poor performance."

But some of the reasons for the chicken industry's troubles are more complex and rooted in South Africa's struggle for freedom.

Since the coming of democracy to South Africa nearly two decades ago, trade unions have made up part of a ruling tripartite government. The power of organized labor -- that was so skillfully harnessed to combat Apartheid -- now saddles local industry with burdens that make South African markets uncompetitive, and South African poultry more expensive than birds from other developing and developed countries. Collective bargaining of wages and rigid labor laws have helped create a high-cost, low-skilled workforce.

Since 2000, real wages across all industries in South Africa have risen 53 percent. Over that same period, South African productivity fell 41 percent.

"Local poultry producers are losing tens of millions of rand (millions of dollars) every week," Kevin Lovell, CEO of the group behind the proposed tariff, told the local paper Business Day. "In the past 18 months, five small- to medium-sized poultry farms have closed or are in business rescue proceedings, with more than 2,000 jobs lost. Larger poultry producers shed a further 3,000 more."

Lovell said that while 62 percent of the value of a chicken goes to farmers, much of the money spent on fowl ends up in the hands of middlemen. "If the okes in the middle decided not to take such massive bonuses then the prices would be lower," he told the Mail & Guardian.

South Africa's trade commission is reviewing the application for the new tariff and a ruling is expected soon.

Photo: Flicker/Farm Sanctuary

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