Why cutting chicken import tariffs won’t help consumers

FairPlay is forcefully opposing a proposal being considered by the government to cancel or reduce anti-dumping duties on chicken imports in order to ensure South Africa’s chicken supplies at the end of this year and into 2024.

The proposal is currently being evaluated by South Africa’s trade regulator, the International Trade Administration Commission (ITAC). It could result in temporary rebates on general import duties on imported chicken, as well as on the anti-dumping duties in force against nine countries.

The motivation for the proposal, enthusiastically supported by chicken importers, was the fear that a rapidly spreading bird flu outbreak in South Africa would lead to a massive reduction in chicken supplies from local producers.

However, since then, lower infection rates indicate that the bird flu outbreak has been contained, while the chicken industry has said it is implementing plans that would take care of all or most of any shortfall this year, and that supply and demand would be balanced next year.

FairPlay founder Francois Baird has emphasised five main points in a statement published in MoneyWeb and Business Report:

1. The proposal presumes a huge supply shortage which is not going to happen.
2. The local poultry industry and thousands of jobs are at stake. Allowing a flood of dumped chicken imports would imperil an industry which is already distressed because of rising input costs, power cuts and other infrastructure failures, and the R4.8 billion loss so far this year because of bird flu.
3. Reduced tariffs will not lead to lower retail prices because importers have not previously passed on low import prices to consumers.
4. Importers will therefore make even greater profits as cheaper imports are sold at local market prices.
5. Cutting the 15% value added tax (VAT) from local chicken would bring about an immediate price drop for consumers.

FairPlay has appealed to the government to support a R60 billion strategic national industry by retaining tariffs and anti-dumping duties as well as compensating chicken producers for the millions of chickens they are ordered to cull in the effort to curb the spread of bird flu.

Read the original article at https://fairplaymovement.org.

Relevant Agribook pages include “Poultry and chicken farming”

Photo by Sam Moghadam Khamseh on Unsplash