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Jeremy Maggs: In the meantime, let's talk about poultry. As you know, the International Trade Control Commission (ITAC) has confirmed that punitive duties on imported chicken meat have been removed. This decision was made in the wake of the highly pathogenic avian influenza HPAI, also known as avian influenza, which, needless to say, has devastated global and regional poultry supplies.
Joining us now is Ayabonga Kawe, Chief Executive of ITAC. We warmly welcome you all. First, a little background. Can you tell us more about the decision-making process you went through?
Ayabonga Kawe: I think the starting point is to help the public understand the nature of our work. Most of our work, yes, some is done on our own initiative, but most of it actually comes from policy statements and policy directives from the executive branches of government. In this case, pursuant to Article 16 of the International Trade Control Act, the Minister of Trade, Industry and Competition (Ebrahim Patel) directed his Itac to consider temporary rebates on various categories of poultry products. Now, this follows the culling of millions of chickens and of course the announcement by the Department of Agriculture, Land Reform and Rural Development (DALRRD) of the HPI Bird Influenza outbreak. Since the outbreak was announced in the second half of last year, we have already seen millions of chickens culled across the value chain, from breeders to egg collectors.
In other words, this was a directive that sought to pre-empt what many had probably predicted would be a shortage of poultry products that would impact poor and working-class households for whom poultry is the main protein. I think. Really that was the motivation behind this. We were instructed to look into it and in the process we identified a number of stakeholders including importers, wholesalers, domestic poultry producers and of course national bodies such as the National Agricultural Marketing Council (NAMC) and government agencies. should have been given an opportunity. Department of Agriculture, Land Reform and Rural Development.
Now, late last year and early this year, we recommended to the Minister of Trade, Industry and Competition, and then to the Minister of Finance (Enoch Godongwana), that such a temporary system be considered. The rebate will be informed by an assessment of the occurrence by the Ministry, which is the Ministry of Agriculture, Land Reform and Rural Development. It is therefore very strange that there are certain comments to the public, suggesting that this is a reckless decision made without engaging with the suggestions that various stakeholders would have made. seems to be aimed at. We continue to be guided by the epidemic in this process, and given many of the DALRRD proposals, that is very much the case for us as well.
Jeremy Maggs: So can you give us a concrete sense of how this will impact chicken prices in the short and long term? Have you hit that number?
Ayabonga Kawe: Well, Jeremy, I think two things will help in this case. In general, this will not only alleviate the scarcity of chicken meat and the availability of chicken meat, but also have the effect of cushioning the price increases in the food basket of many poor households that may continue to be observed. is expected. Now, consistent with this, there are other factors that determine whether the lower prices seen at the port for containers bringing in poultry products translate into lower prices when consumers hit the shelves. A big part of this has to do with ensuring that importers, wholesalers and retailers are not actually passing on unfair price increases to consumers.
That is why, in the recommendations we made to the Minister, we asked him to also consider certain other tools at his disposal to monitor whether these prices are passed. If that doesn't happen, I think we'll respond accordingly. So I don't think it makes sense to calculate that number in advance. Because the people at the port have to pass the price to the wholesaler and make all sorts of assumptions about whether the wholesaler will defer that price or not. It's passed on to the retailer, who in turn passes it on to the consumer. Many other things could potentially happen in that chain.
Jeremy Maggs: fair enough. So, as a result of what you just told me, are there other measures ITAC could consider to mitigate the impact of bird flu and other external factors on rising food prices?
Ayabonga Kawe: So, Jeremy, what we have in our toolbox is investigative skills. In this example, we conducted a study that allowed us to calculate the expected poultry shortage in the South African market in 2024. This will tell you the quota of poultry you are allowed to import. I recommend to the members of the committee. I want the public to actually read the report. Itac is available to the public on his website.
That's what we have in our toolbox. But as you might imagine, other state agencies have other tools that they can also call upon. In this example, I believe we flagged a price monitoring tool that the department might have access to. But in addition to that, part of the response to this outbreak is to ensure that veterinary services are entrusted to the DALRRD, and also to ensure that vaccinations are available here to deal with this outbreak. think.
Jeremy, this isn't the first thing we've experienced, and it certainly won't be the last. I think we need a coordinated response between governments.
As far as trade instruments, we just have a toolkit, but I think there are many other national institutions that can do this to respond. It is reassuring to see that domestic industry has also joined the party, proposing all the contingency measures it has taken and will continue to take, and really suggests a whole-of-society approach as far as this is concerned. think.
Jeremy Maggs: I would like an answer to this immediately. Of course, the concern is that the benefit of the rebate will be passed on to the consumer, but that's outside of your scale and remit, right?
Ayabonga Kawe: Indeed, it will be. That's why I'm saying there are two laws, one is a consumer protection law and one is a competition law, which in this case allows for the ability of the executive branch to intervene, and one is Authorizes you to monitor prices and prices. Behind this moratorium is an unconscionable and unfair price, and we need to intervene accordingly. These laws address that, and I think we noted that in our recommendations.
Jeremy Maggs: I'll leave it there. Thank you very much for your participation.