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Increasing imports could jeopardise the local agricultural economy

Screen Shot 2020-07-13 at 6.06.00 PM

Source: Agri SA media release, 13 July 2020, photo credit: A & A Contract Customs Brokers

Agri SA calls on government to be vigilant around produce trade.

Globally, the decline in demand for agricultural produce has resulted in stock surpluses and over-capacitated storage facilities. Consequently, this has led to increased export volumes to low value markets, which poses a potential threat to the South African agri sector, and also creates opportunities for illicit trade.

“Surges in the imports of frozen produce such as chicken and potatoes will place increased pressure on local farmers, negatively impacting their livelihoods and those of the people they employ,” warns Omri van Zyl, Executive Director of Agri SA. “Dumping could endanger the growth outlook of one of the country’s most viable industries.”

Simultaneously, the risk of importing under incorrect tariff lines enables illicit trade. This is compounded by the risk of dumping and should be guarded against. It is imperative that trade rules are enforced at points of entry to avoid unfair practices.

“Farmers are price takers and with margin pressures mounting, dumping would be catastrophic to several commodities,” said Van Zyl.

As the economy opens up, the pressure caused by the closure of Quick Service Restaurants (QSR), hospitality and tourism industries will be alleviated to an extent, however, the chicken and frozen industry remains at risk. Under lockdown levels 5, 4 and 3, the demand for frozen chicken declined by 18%, 13% and 7% respectively.

“We are committed to contributing to the competitiveness, resilience, and long-term development of local growers, producers and their supply chains, which unfortunately stand to be comprised by ongoing, international dumping practices. It is vital that all industry stakeholders work together to ensure enhanced food security, the empowerment of emerging farmers and the sustainable growth of the South African agricultural sector, said Van Zyl.

Agri SA would like to work alongside government, international trade partners and all stakeholders in the value chain in protecting our local market and welcomes the introduction of necessary measures to promote fair and ethical trade activities.

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