Consumers question benefits of poultry industry protection

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Edgar Brandt

Windhoek-It will be another four years before the government reviews protective restrictions on the local poultry industry, which have left consumers questioning the supposed benefits largely due to the high prices of local poultry products, as a result of their past four years of implementation.

Interestingly, the 2013 poultry infant industry protection scheme has done very little in terms of growing the number of jobs, contrary to its aims of accelerating job creation and industry growth.

“Unfortunately the protection did not necessarily lead to the reduction of prices at retail level,” admitted Dr Michael Humavindu, deputy permanent secretary in the Ministry of Industrialisation, Trade and SME Development. In fact, in an exclusive interview with New Era, Humavindu says the dominant players in the poultry industry have “maintained their employment profile at about 600 employees” since the 2013 application of the eight-year infant industry protection (IIP) that ends in May 2021.

However, the upside is that a number of new entrepreneurs, were able to enter the industry, according to Humavindu.

He pointed at a few smaller entrants into the industry, mainly in small-scale poultry production, which he describes as a positive outcome of the protection. There are now roughly 10 small to medium scale poultry farmers supplying local demand and one major commercial supplier in the form of Namib Poultry, which falls under the Namib Mills stable.

Yet it is the prices of poultry products that have consumers doubting the benefits of the infant industry protection legislation – retail prices for eggs has constantly remained at about N$44 per one and a half dozen (18 eggs), while frozen chicken retail at a price that is double the price before restrictions kicked in. The prices of live chickens have even doubled and in some instances tripled.

Humavindu however said the retail prices ought to be mirrored against the inputs of production on different value chains of poultry production.

“The local chicken is relatively pricey compared to South Africa. However, this is underpinned by different cost factors such water, electricity, labour and transport,” he said.

“The input prices are relatively expensive as compared to South Africa and this has a spinoff effect on prices.

“Additionally, the South African industry has massive economy of scale due to huge investments in the industry over the years.

“What we need to do as a country is to continue investigating the marketing margins accrued at each stage of the value chain and explore options of reducing such margins, where feasible,” said Humavindu.

The protection, based on Article 8 of the Southern African Customs Union Agreement on Infant Industry Protection, was imposed in May 2013 for an eight-year period and is supposed to end by May 2021.

The rationale for the protection of the industry is to “preserve and nurture our economic and industrial growth and in turn accelerate jobs and wealth creation, and equalise wealth distribution by cushioning and creating policy space for existing economic value chains to get off the ground and build the requisite competitive capacity”, he added.

Humavindu nevertheless said that aside from the retail prices and the non-growth in job numbers, the protection “has had a positive impact in the sense that many people have grabbed great opportunities to stimulate production and supply the domestic market”.

Currently a steering committee, which meets monthly, consisting of both producers and importers together with the ministries of Industrialization, Trade and SME Development, Finance, and Agriculture, Water and Forestry, reviews the performance of the industry.

Humavindu’s revelations follow the chief veterinary officer in the Ministry of Agriculture, Water and Forestry, Dr Adrianatus Maseke, announcing an amendment to the ban of poultry products from South Africa. The amendment allows the importation, under strict conditions, of live poultry, live ostriches, raw poultry, ostrich meat and table eggs originating from areas approved by South Africa’s Department of Agriculture, Forestry and Fisheries (DAFF), provided such areas are outside a 90km radius around the Vaal Dam.

“The certifying veterinarian should endorse on the health certificate that the compartment tested negative on PCR (or any test approved by DAFF for the surveillance of the compartments) for avian influenza and that the results are not older than 30 days of endorsement,” Maseke explained in a statement. All other poultry, wild birds, domestic birds or products derived from poultry remain ineligible for imports from the region into Namibia.

South Africa’s DAFF last week placed a general ban on the sale of live chicken throughout that country as the contagious H5N8 avian flu spread to more provinces and confirmed cases of avian flu were reported in Mpumalanga and Free State provinces. DAFF also moved to control further outbreaks and was concerned about bird flu in Zimbabwe.

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