To quell the ongoing crisis between South African poultry farmers and the European poultry sellers, the ANC has suggested that poultry farms should be included in the list of government sectors.
The African National Congress executive committee lekgotla is proposing that the government buys poultry farms in order to salvage them from being forced to close down because of chicken imports.
Gwede Mantashe confirmed the party’s agreement on the matter. While briefing the media on the NEC lekgotla at Luthuli House, he said government must intervene to stem the job losses currently being experienced in the poultry industry.
“Government must buy the poultry farms that are being closed down and continue producing. This will not only require the state to buy‚ but it also means that the state will have to find new markets for the poultry that is produced in those farms‚” he said reminding government about how 1‚200 workers were left jobless after Rainbow Chickens‚ renamed RCL Foods‚ was forced to sell 15 of its 25 Hammersdale poultry farms just to stay afloat.
The party’s decision came at a time when KwaZulu-Natal town of Hammarsdale turned out to be the centre of a trade war between South Africa on one side, the EU, Brazil and the US on the other.
The retrenchments will have a devastating effect on the KwaZulu-Natal town as the poultry farms were the major employers in the area following the closure of the textile industry in the mid-1990s.
“It will create huge unemployment and affect migration. There are nearby industries that could offer employment but one doesn’t know if workers are mobile enough to get there,” says Economist Azar Jammine
Poultry imports for the first half of 2016 amounted to 288081t, with the EU accounting for 45.5% and Brazil 43.2%. Most of the rest came from the US.
To this, analysts warn that for every 10,000 tonne of chicken imported, 6,000 jobs could be lost. But, the ANC claims the situation can only be saved if government comes to the aid of locally produced poultry products and buys the entire farms.
Meanwhile, South African government has set up a joint task team delegated to look into the troubles with the poultry farmers.
The joint task force is expected to map a way out of the poultry farmers economic challenges with regards to the influx of poultry products from foreign countries.
An investigation is currently underway to establish the impact of imported chicken portions from the European Union on the domestic market. There’s also talk of a hike in the safeguard duty of bone-in chicken imports from the European Union as was discussed between the government and the departments of business and labour.
The joint task team would also work on a plan to salvage the industry in a way that is compliant with obligations under the World Trade Organisation and trade treaties.