SAFTU statement on government failure to protect the chicken industry

 11 March 2020

The South African Federation of Trade Unions (SAFTU) is deeply disappointed that the government has failed, yet again, to announce new tariffs to stem the tide of dumped chicken imports from the EU and Brazil.

Chicken imports have already killed thousands of South African jobs and are threatening thousands more. Most of these workers belong to the Food and Allied Workers Union (FAWU), which is affiliated to SAFTU. We will not keep quiet while our members’ jobs are threatened and the livelihoods of thousands of South Africans are ruined.

Why is the government doing nothing to help them? On 13 February, in his SONA address, President Cyril Ramaphosa promised that new tariffs would be announced “within two weeks”. Those two weeks have come and gone, Mr President, but the support you promised for the poultry industry and its workers seems to be nothing but hot air.

Let us remind the President and the government that this is about far more than two weeks. Since 2016 FAWU mobilised members about the impact of dumped chicken, from the EU and Brazil, on South African jobs. We have highlighted the plight of workers and their families when imports force retrenchments. We have pleaded with government for action to protect them.

hat happened? Nice words and no action. This is indefensible in a country with one of the highest unemployment rates in the world - the President himself said that more than half of our young people cannot find work.

Yet, when the opportunity arises to protect jobs and create many more, we wait with no action from government to act against the EU and Brazil, which is only a part of the problem we face. If they cannot take on Brazil and its food safety scandals, will they ever have the courage to take on the EU, which is the other part of the pincer movement squeezing South African workers?

The government is not even keeping its word on the Poultry Sector Master Plan, which is supposed to be the solution to the chicken industry crisis.

Government and the labour movement, together with industry and chicken importers, signed the master plan on 6 November last year. It is a plan to save the industry and its jobs through curbing damaging imports, and then to grow the industry and create jobs by increasing local demand and developing an export market.

The master plan hinges on protection against those damaging imports. Unless we can put our chicken industry back on its feet, through tariffs that enable it to compete with dumped and subsidised imports, it will not be able to grow into the substantial exporter envisaged in the master plan.

The master plan recognised that the industry is vulnerable and faces significant threats. It said chicken imports had increased by 73% over the past five years.

“If this trend is not reversed, then the South African industry can be expected to stagnate and slowly decline, affecting jobs and livelihoods across the value chain from maize and soya farming to food processing. It would also threaten our food security in the longer term,” the master plan said.

That is a devastating statement about the future of a strategic national industry and the thousands of workers in it. The poultry industry is the largest component of our agricultural sector, and it consumes nearly half of the production of our important maize industry. More than 100 000 jobs in the chicken industry, and a further 20 000 in the maize industry, are at risk because these industries “can be expected to stagnate and slowly decline” if imports are not stopped.

We in the labour movement support the master plan. The government said they agreed, but where is the action to reverse dumping?

Higher tariffs against Brazilian chicken were applied for in December 2018. A year later, in November, the master plan said tariffs would come “soon”. In February, President Ramaphosa said it would happen in two weeks and would help save 54 000 jobs. The SAFTU is still waiting for any action. Is this the action of a government that is serious about job creation, where is the urgency?

In the year since tariffs against Brazil were applied for, chicken imports have continued to flood onto our market. In 2019, South Africa paid more than R6bn to foreign chicken producers. We are exporting jobs and money to Brazil and the EU, and the government doesn’t seem to care.

The local industry has estimated that 30 000 South African jobs could be created by replacing chicken imports with local production. Again, the government doesn’t seem to care.

The government doesn’t seem to care, either, about the conditions in which huge amounts of chicken is produced in Brazil. Apart from food safety scandals, which led to arrests in Brazil and import bans around the world because Brazilian producers evaded safety regulations, there have been questions about the treatment of Brazilian workers.

FAWU has raised concerns about reports of poor employment conditions and abuses of workers’ rights in Brazil. We said the government should investigate reports claiming that near slave labour conditions exist, or had existed, at some Brazilian producers. Did they investigate? Silence.

SAFTU is also seeing a rising threat from the EU. Once our major supplier before bird flu bans cut its exports, EU producers are now returning to our markets, dumping growing volumes of unhealthy parts of chicken here once again.

SAFTU will support calls for additional tariffs to halt this renewed EU onslaught on South African jobs.

Finally, SAFTU would like to draw attention to the fact that the livelihoods of South African workers and their families are threatened because of the fancy eating habits of rich consumers in the northern hemisphere.

The cause of the crisis in our chicken industry is that consumers in North America and Europe prefer chicken breast meat. Producers there, and in Brazil which is the world’s major chicken exporter, produce vast quantities of chicken to supply this demand for breast meat.

That leaves them with equally vast quantities of unwanted brown chicken meat – the thighs and drumsticks that are popular in South Africa and other markets. So they sell this off, in frozen bulk packs, to our chicken importers at any price they can get.

Our chicken producers can’t compete with chicken that is sold below the cost of production, and below the price it is sold for in its local market. That’s why jobs have been lost and why urgent action is needed.

Imports have taken nearly 30% of the local chicken market, and agricultural experts estimate this could go up to 40% if nothing is done.

SAFTU wants a situation where South African workers produce South African chicken for the South African market and then develop a strong export capability.

We want a situation where South African jobs are prioritised, and where a threatened local industry is encouraged to expand and create thousands more jobs.

That starts with tariffs. Tariffs that have been signed off and promised by the President. This not a capable state, the people and working class is bearing the brunt of this failure by the government. The people and workers are owed an explanation!

Issued by Zwelinzima Vavi, General Secretary of SAFTU, 11 March 2020