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Jimmy Moyaha: The International Trade Administration Commission Itac has approved rebates on the import of poultry, especially chicken meat. The rebate appears to have gone down too well with some industry players, particularly local councils such as the South African Poultry Association. We look at it and try to understand the rationale that was applied and what happened.
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To that end, I will join Commissioner Ayabonga Kawe of the International Trade Control Board by phone to consider this. Good evening, Secretary. I am always grateful for your help.A total of 43,000 tons of chicken meat imported [are] As a result of these rebate announcements, 65 permits were approved and issued. Can you tell me what's going on there?
Ayabonga Kawe: Good evening, Jimmy, and good evening to all our listeners. Thank you very much for inviting me. Yes, we did issue 65 permits based on this rebate provision. It might be helpful to just give some background and context, Jimmy.
Towards the end of last year, ministerial instructions were issued to consider poultry rebates in response to shortages that may or may occur due to the peak of H5 and H7 avian influenza. Ta. In South Africa, outbreaks have probably occurred around September or October, and in some cases up to 12 outbreaks a week have been reported to state veterinarians.
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Admittedly, the amount is gradually decreasing, but this rebate has effectively been applied since around January this year, with some permits being issued to cover imported goods that would be brought into the country. Therefore, it may be worth explaining a little bit of the background. Even back then. So this is really more of a response to a veterinary issue, apparently, rather than the typical trade issues that we normally intervene in.
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Jimmy Moyaha: Now, when it comes to rebates, it is understood that there are two conditions for rebates. One is a shortage of chicken meat, and the other is a shortage due to avian influenza. Although it has now been proven that avian influenza has indeed occurred, local stakeholders such as the South African Poultry Association and Fairplay say there is no shortage in the local market. Therefore, the rationale for providing rebates and giving tailwinds to foreign importers rather than relieving pressure on the local side is a bit questionable.
Ayabonga Kawe: Well, Jimmy, no one seems happy with this rebate, not even domestic producers or importers. I have seen some reports that claim that it is based on statements made by a certain importer's organization, but in this case, we believe that we will be visiting domestic producers to confirm whether or not there is production, so feels dissatisfied.
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So there appears to be some dissatisfaction with this decision on both sides. But let me tell you this: Jimmy. I think this gives the impression that some of the more controversial tariff items are subject to full tariff rebates, but this is not the case. Since 2019, anti-dumping duties for certain markets have increased from 37% to 62% for bone-in cuts, thighs, drumsticks and thighs. Harmful imported goods were coming in.
And this rebate covers only regular duties, not anti-dumping duties, some of which are partial rebates against specified tariff quotas.
Now let's move on to the point you raise about scarcity. One of the conditions of the rebate is the issuance of permits in consultation with the DALRRAD Department of Agriculture, Land Reform and Rural Development and one of its agencies, the National Agricultural Marketing Council.
The reason is precisely that it can give indicators of recovery as far as veterinary point of view and production are concerned. It determines the amount and scope of permits subsequently issued.
In this case, the industry says there are no shortages, but I think it will be interesting to hear what the outcome of the discussions with DALRRAD and our company will be insofar as stocks are building up. . The suggestions are there.
But I think [from] According to the reports we received from DALRRAD (many of which were published in January and February of this year), it appears that bird flu is affecting us very much, with some of the outbreaks being As long as it remains unresolved, their own objective assessment seems to be so. I think especially around the epicenter, around Gauteng, the debate about introducing this as a way to avoid shortages is becoming very relevant.
Jimmy Moyaha: Mr. Secretary, I would like to take a look at the situation regarding the avian influenza outbreak last year. This has proven to force many producers, especially local producers, into additional culling that they were not expecting. There was no response from a concessionary or relief perspective.
Read: Rainbow owners cull 410,000 chickens during bird flu outbreak
Now, I realize that may not be within your purview. Maybe that's under the jurisdiction of the Department of Trade and Industry and needs to be discussed there, but was that the way to support local farmers? As an Itac, I know you're focused on protecting the local economy, but it's a dual role that you also have as a development economist, and you have to put local markets first. And that's what you did in this case.
So if there was anything we could have done, shouldn't we have said, “Let's take some of the pressure off from that perspective.''
Ayabonga Kawe: Well, Jimmy, I actually imagine that some of the interventions from a biosecurity perspective to contain the outbreak would have been very costly to many producers. I'm sure you've heard from some of the news reports that there have been statements from many of our counterparts in other national institutions about discussions and considerations regarding this. Unfortunately, I don't know. Because, I think you're correctly aware, this probably doesn't fit into the category of trade remedies that we have in our toolbox.
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But as you rightly say, we should be interested in what that means for many producers. I hope that these discussions will continue.
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But in this case, we certainly have certain tools in our toolbox, and one of them is this type of rebate measure, but also the trade defense measures that have supported and protected this industry and even more. will also be part of the tariff increase measures. Certainly since 2019, we've seen that even with things like boneless cuts and chicken breasts. [these] increased from 12% to approximately 42%.
So these are the levels of protection that the industry has enjoyed. Imports also decreased during this period.
I think a lot of times, some of the statements are like throwing out the baby with the bathwater.
This is a temporary intervention, and from some of the reports we are hearing from the domestic industry, it would appear that this is an Armageddon moment for the industry. I think we never do.
Jimmy Moyaha: Mr. Secretary, before I leave, I would like to hear your thoughts on Saudi Arabia's announcement regarding beef imports.
I know we are talking about the poultry sector, which affects international trade, and I haven't had a chance to hear your opinion on this yet. Obviously, from an export perspective, whether it's beef exports, whether it's citrus exports, whether it's wine exports, the fact that we're able to export to the market is further evidence of the quality that exists within South Africa. . The high quality of agricultural space in South Africa is evidenced by this type of development.
Ayabonga Kawe: Definitely, definitely, Jimmy. I think many of our listeners know that South Africa's agro-processing sector is comparable to some of the best sectors we've ever talked about. But in that case, in the case of exporting red meat to Saudi Arabia, I think it's great that that particular market has opened up for export. Not only because we can generate a lot of foreign exchange, but also to make the tastes of many consumer markets around the world aware of the quality of the products we produce here.
Read: Saudi Arabia begins importing South African meat as embargo ends
And we always support South African agricultural processing. The company is South Africa's largest manufacturing employer. It employs people in the steel sector, which has traditionally been the mainstay of South Africa's manufacturing industry.
Great news, Jimmy. And we certainly hope that's one story among many. Taking the macadamia market, soybeans, South Africa is moving from being a net importer to becoming a net exporter in soybeans, a key input to poultry production, as a result of investments to date. It is still made with macadamia, [SA] It is one of, if not the world's leading producers.
So I think there's a lot to talk about when it comes to South Africa and agro-processing. I hope we get a chance to talk about those things instead of bickering over rebates and tariffs.
Jimmy Moyaha: One thing that you and I will certainly discuss, and I would love to have the Minister join us on, is when we will get clarity on the export of medical cannabis. Because it's a whole area that we're geared up and ready for. and local councils are waiting with bated breath.
Ayabonga Kawe: Oh, Jeepers, yes. But, Jimmy, I would encourage you to invite both the convener of the Cannabis Master Plan, as well as your colleagues in the department, and the Department of Justice, who are driving it, on this issue.
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But I think that's another area where South Africa certainly has a unique comparative advantage and competitive advantage. Yes, I will definitely convey the message.
Jimmy Moyaha: Thank you, Chairman. Leave it at that. That's Commissioner Ayabonga Kawe of the International Trade Administration Commission, who joined me to consider the poultry rebate recently approved by Itac, but also other trade and export opportunities that exist within the South African market. I joined in to consider some things.