Irrational trade laws threaten chicken supplies

As avian flu rages across the globe, irrational trade laws threaten to further tighten the supply squeeze on chicken and add fuel to skyrocketing food prices.

Since the beginning of 2022, severe outbreaks of bird flu have spread to nearly every continent, including countries in Europe, Asia, North America and South America, resulting in the culling of hundreds of millions of chickens.

To manage chicken and egg supplies, most countries therefore abide by the trade regulations outlined by the World Organisation for Animal Health (WOAH), formerly known as the OIE. These recommend resuming trade in poultry products with countries three months after they have been declared free of bird flu. Furthermore, some countries even resume trade in poultry products with countries one month after they have been declared free of bird flu.

But, in contravention of international trade standards, the Department of Agriculture, Land Reform and Rural Development (DALRRD) refuses to reopen trade with international chicken suppliers unless an official has personally inspected and reapproved their facility, notes Frederick Hume, Managing Director of major import-export company Hume International.

“This rule has effectively permanently locked South Africa out of trade with major international chicken suppliers, because the department has then informed importers that it does not have the funds needed to send inspectors overseas.

“In response, importers and food producers have offered to pay for trade missions ourselves, but we’ve been refused on the grounds that it would be a conflict of interest,” he says.

“To strengthen supply chains, government urgently needs to consider public-private partnerships in order to fund and facilitate inspections or abide by international trade law norms. Private businesses, and even various consulates would be more than willing to help fund these trade missions to overcome the challenge.”

Chicken imports crucial to local plates and pockets

Chicken remains the country’s most affordable animal protein aside from milk and is an essential part of South African food baskets, especially for low and middle-income households. Emphasising its importance to local diets, recent statistics from the South African Poultry Association (SAPA) reveal that the average per capita consumption of chicken stood 38 kilograms – more than the consumption of beef, pork, mutton, and goat combined.

Meanwhile, global shortages resulting from the epidemic have already impacted prices in countries such as Japan, where egg prices had risen 70% year-on-year in February, and in the United Kingdom, where food inflation reached a 45-year high of 18.2% last month.

In South Africa, latest CPI figures show that the price of food and non-alcoholic beverages has already risen 13.6% year-on-year on the back of soaring energy and animal feed costs. And the situation will only worsen if government does not increase the pool of potential poultry suppliers – particularly if the bird flu outbreak reaches Brazil, which is the country’s biggest supplier, warns Hume.

“The local poultry industry simply does not produce enough chicken and eggs for household needs, and imports represent a vital complement to South African supply. But, as demand outstrips supply, chicken prices could sail through the roof – particularly impacting vulnerable households who are dependent on chicken for protein.”

Alternative solutions to looming shortages.

In addition to public-private partnerships, government could also consider regionalisation as a possible solution to avoid potential shortages.

The terms of South Africa’s trade agreement with the United States of America (USA), for example, sets an important precedent, enabling importers to continue trading with specific states that have not been impacted by bird flu outbreaks.

“In many ways, regionalisation represents a far more rational alternative to managing bird flu trade restrictions than a country-wide ban. For example, in terms of our current approach, a producer just kilometres from the border of a neighbouring country facing trade restrictions may be in closer proximity to a reported outbreak in the banned country yet can still supply chicken. By contrast, a producer on the opposite side of the same country who is actually further from the reported outbreak cannot,” explains Hume.

Regionalisation would enable importers and food distributors to obtain supply from a wider pool of producers from different states, or government could even consider limiting restrictions to producers within a certain radius of bird flu outbreaks.

“The fact of the matter is that the rules dealing with bird flu were written in a bygone age, long before the disease became endemic in almost every country around the globe. Relying on these rules is akin to following traffic laws written in the time that horse drawn carriages were the favoured mode of land transport.”

Another alternative solution would be to permit the heat treatment of poultry in DALRRD-approved facilities under the same rules and conditions applied to certain imported pork products. These regulations prove that a protocol already exists, is in place and would only require minor modification for poultry products. 

“Ultimately, it is imperative that the South African authorities ensure an uninterrupted supply of mechanically deboned poultry meat (MDM), which is not produced in any volume in South Africa, if we are to ensure the continuous supply of polonies, Russians, Vienna’s and other staple meat products. Without the uninterrupted supply of this key ingredient, cold stores will stand idle, factories will close, shelves will empty, and countless people will lose their jobs,” he argues.

“The risk to our supply chains is very real and we simply cannot afford to do nothing. Our current regulations are irrational and have created impenetrable non-tariff barriers to trade, which are threatening local supply and prices. Government and DALRRD need to come to the table and discuss potential solutions to avert a looming crisis.”