Cosatu backs the DTI tariff increase on imported chickens

28 Nov 2014


The Congress of South African Trade Unions commends the DTI decision to increase tariffs on selected chicken imports. The poultry industry directly employs 48 000 employees with another 60 000 indirectly employed in supporting sectors. Five companies alone (Rainbow, Astral, Sovereign Food, AFGRI poultry and Supreme Poultry) employ 22 166 of these employees. Tariffs are important in order to guarantee jobs and food security. South Africa should not be reliant on imports for basic necessities such as chickens. Increasing tariffs will ensure that jobs are sustained, as imported products will not be allowed to be sold at lower prices than local chickens. Any price-rising effect should be compensated for by the creation and retention of decent jobs and the long-term survival of the poultry sector.

A protected market for local producers should be accompanied by conditions, including creation of decent jobs and the five companies have claimed that 11 995 direct jobs and 14 892 indirect jobs are likely to be created when tariffs are imposed to their maximum rates of 82%. COSATU hopes that government will hold producers accountable for this promise to increase jobs. Prior to this determination there was a dispute between importers and producers. COSATU commends the Minister in choosing the side of the producers, as required by SA's Industrial Policy framework. We should eat what we produce and should encourage production- and not consumption-led growth. By supporting producers the government is supporting creation of jobs on a sustainable basis.

Assertions that tariff increases will automatically result in price increases of chickens are not true. Prices of products, including chicken products, have increased in the absence of tariffs. It is not correct that cheap imports are always sold at lower prices in local shops. Most imported products are imported at lower prices in order to reduce the tax on imports and to destroy local industries. Once the imported products have obtained a significant market share they would start to raise prices.

COSATU is mindful that tariffs alone will not ensure the transformation and sustainability of the sector. One of the major inputs in producing chickens is high feed costs. According to the International Trade Administration Commission (ITAC) this represents about 65% to 70% of the total costs of producing chickens.