We must protect our borders from the ravages of other countries making our products, stealing our companies and destroying our jobs. Protection will lead to great prosperity and strength."
You’d be forgiven for thinking this opening quote is from a local poultry CEO. But those words were spoken by US President Donald Trump in his January inauguration speech.
The chicken industry has been bleeding jobs. Producers want South Africans to believe that imported poultry is the reason for this problem and that protectionist policies are the only answer to fix it.
These producers are crying wolf. They want South Africans to believe their industry is on the verge of collapse and that only tariffs on imported chicken can steady their sinking ship.
Imports are not to blame, but inefficiencies in the local industry could be. Tariffs won’t save jobs; they’ll just make it more difficult for poor people to buy affordable protein.
On January 4, a Financial Times editorial warned that should Trump persist with such protectionist intervention, he will "not help to boost employment … instead, he will instil a fear of political meddling among business leaders, disrupt efficient international supply chains and risk stoking a protectionist and populist backlash among America’s trading partners".
There are lessons here for SA. When the industry lays off thousands of workers, it hurts the economy and it hurts families whose breadwinners will find it even more difficult to put food on the table.
According to the local poultry industry, job losses are due to cheap imports. This is a seemingly compelling argument, but delve a bit deeper and it makes no sense. Imported poultry constitutes only 14% of all consumed chicken in SA — not a serious enough quantity to have such devastating consequences.
EU chicken is already subject to a newly implemented 13.9% "safeguard duty" and yet the local industry is seeking further tariff hikes. These hikes will only lead to SA’s poorest consumers subsidising the local chicken industry and food inflation.
Individual quick-frozen chicken, now subject to brining regulations, cost consumers R16.99 per kilogram last quarter. Last month, the same product cost R26.99 per kilogram and prices are expected to continue rising.
Benjamin Disraeli’s response to Britain’s 1846 repeal of the corn laws, which imposed restrictions and tariffs on imported grain, was: "Protection is not only dead, but damned."
Protectionist policies won’t fix the domestic poultry industry — they will only paper over the cracks of their inadequate business model.
The US public has realised that Trump is here to stay, for at least four years.
Like all South Africans, I hope the domestic poultry industry will be around for a lot longer. That will, however, require they do a bit of introspection to fix their business. If they don’t, they may soon find, like Trump has, that people will start protesting against their actions.
As long as the local industry wilfully deflects scrutiny from its own systemic problems, SA’s food security remains at risk. South Africans need an affordable form of quality protein, a local poultry industry that is globally competitive and a source of thousands of jobs.
• Southey is chairman of the Association of Meat Importers and Exporters of SA.
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