Chicken dumping in South Africa and the long-term effects on local commercial chicken farming industry: a review

Abstract

The aim of this article is to highlight the effects of chicken dumping trade on South African local commercial chicken farming industry. The high cost of farming in South African has risen and this has created a fertile ground for overseas countries where chicken production costs are low to intensify their exports to South Africa for their excess chicken products at a lower price. South African chicken farmers are already facing domestic challenges which includes high-cost feed, high cost of importing chicken lines and resources to produce the meat chicken. A local single fertilised Ross 308 / Cobb 500 Fertile egg cost at least R2.50 ($0.12), whereas international, local breeders source these genetic lines at over a $1 an egg. Locally, there is persistent drought, chicken diseases, high electricity cost and electricity shortages (load shedding). These challenges inevitably raise costs of chicken production in South Africa whereas the US, Brazil and EU countries farming industries are highly subsidised and experience no high electricity costs or load shedding. In perspective, imported chicken from Brazil cost R9 per kg as compared to locally produced chicken at R25 per kg. To mitigate the chicken dumping trade, the South African government imposed legally sound chicken import tariffs of up to 62 %, however in August of 2022, the government suspended these tariffs due to rising food costs in the hope that the cheap dumped chicken would provide a relief to the financially stressed consumers. This move has raffled feathers within the local chicken farming sector which is struggling to sustain their farms due to stiff competition with the low-priced chicken, predominantly from Brazil and the US. More chicken farms in South Africa are shedding jobs. As of 2023, the poultry industry in South Africa employs an estimated total of 70,000 people, and others are questioning the sustainability of their enterprises going forward if the chicken dumping in the country is not controlled via stringent legislation that include appropriate dumping tariffs. This article suggests that both the chicken farming industry, the chicken importers and the government should hold regular dialogs to get common ground before the majority of local chicken farmers close shops due to chicken dumping. The regular engagements between the government and the chicken industry could avoid seemingly unilateral suspension of import tariffs. Subsidies that could absorb some of the operation cost, as is the case with US or Brazilian farmers should be introduced. Key words: Chicken dumping, chicken farming, sustainability, chicken production challenges