It is alarming to see reports today that the ZA poultry producers are seeking tariffs of up to 91% on poultry imports from Europe. They insist there is dumping of chicken in the SA market, causing harm to the ZA industry, and they appear to have persuaded the authorities that this is the case. Of course, we should all be concerned if a local industry is facing unfair competition. And the European Union has long had an agricultural policy which has poured billions of Euros into the pockets of its farmers through all sorts of subsidies, fair and fowl. However, I cannot but be worried that the cure will do more harm than the disease. Harsh and even unfair competition helps to make ZA farmers more efficient, and if they cannot take advantage of being in such close proximity to a market which loves their product, then maybe they are not yet performing as well as they should be? And it is inevitable that if the government does slap new duties on EU chicken, the consumer will see the impact in higher prices. At a time when food inflation is already scarily high. Our government has shown an inclination towards protectionism, and can argue that any new anti-dumping duties will follow a detailed investigation. And will be compatible with existing trade agreements. As for the poultry industry? They will be laughing all the way to KFC.
ZA Confidential is a subscription newsletter. For subscription details or any other communication, please contact: zaconfidential@gmail.com Follow us on twitter: @zaconfidential
ZA Confidential 