South African government has set up a joint task team and has delegated it to look into the troubles with the poultry farmers
The joint task force is expected to map the way out of the poultry farmers economic challenges related to the influx of poultry products from foreign countries.
An investigation is currently under way 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 government, business and labour.
This decision by the government follows an outcry from local poultry farmers after Trade and Industry Minister Rob Davies imposed a provisional 13.9 percent duty in December.
This also comes after Rainbow Chickens Limited, the country’s biggest chicken producer, indicated that it would be retrenching 1 350 farm workers and close four farms in Hammarsdale, KwaZulu-Natal.
Davis also instructed the International Trade Administration Commission (Itac) to review the duty, taking into account the impact it would have on other Southern African Customs Union members.
The poultry industry criticized the provisional duty as hopelessly inadequate to deal with the crisis caused by the mass import of bone-in-chicken portions from the EU. It applied for a 37% duty.
SA government has, at a meeting attended by about 40 representatives of various government departments, industry, trade unions and state entities such as the Industrial Development Corporation in Pretoria, promised to enter into into bilateral negotiations with chicken producers such as Rainbow Chickens Limited (RCL) to look at ways to avoid plant closures and retrenchments.
The joint task team would work on a plan to salvage the industry in a way that was compliant with obligations under the World Trade Organisation and trade treaties.
Excite by government’s decision to support the poultry sector, Garth Strachan, Department of Trade and Industry deputy director-general said the industry would have to make reciprocal commitments in return for government support.
These could include producers committing themselves to improving their competitiveness through investment in technology so that the tariffs did not simply serve to keep prices and profits high at the expense of consumers.