BRAZILIAN POULTRY BAN COULD HIT SOUTH AFRICA’S POOR HARDEST, ECONOMIST WARNS

Tue 20 August 2024:

South Africa – The ban on Brazilian poultry could have a significant and potentially detrimental effect on South Africa’s economy, particularly impacting low-income households. The trade restrictions were imposed following a recent outbreak of Newcastle disease that affected poultry farms in the Brazilian province of Rio Grande do Sul.

In response to the outbreak, which was detected in July, Brazil voluntarily decided to halt exports to some countries after thousands of chickens died from the disease.

However, economist Dawie Roodt has raised concerns about South Africa’s ban’s necessity and potential consequences, especially for low-income households who rely on affordable protein.

He pointed out that trade restrictions, like the one on poultry, often result in higher consumer prices, further stretching these households already limited financial resources.

“Always ask the question: is this really necessary? Because if you ban trade, then inevitably, you’re going to affect prices. If you affect prices, of course, that will have an impact on everybody. In the case of chicken, that is very important to South Africa, especially for lower-income people who are very dependent on chicken as a source of protein.”

“That’s crucial for low-income people. If there’s a ban on chicken, then chicken prices are likely to go up. And if chicken prices go up, it will impact the pockets of poor people, inflation, and all sorts of things.”

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Are The Restrictions About Health or Something Else?

South Africa imports chicken from countries like Brazil to meet its domestic demand at competitive prices, as local production often needs to catch up. Brazilian chicken is a major imported food source in South Africa due to its affordability and reliable output.

However, Roodt is sceptical about the ban, mainly since he views the poultry industry as controversial, as this isn’t the first time imported poultry has been restricted. He suggests that the ban might not solely be about health concerns but could also be an attempt to shield local producers from foreign competition.

While such barriers might temporarily benefit local poultry producers, they likely result in higher prices for consumers and could stifle economic growth. This could lead to increased inflation, reduced consumer purchasing power, and potential job losses in the poultry industry.

“I talk to the poultry producers in South Africa quite often. When I say there should not be any import restrictions, they get quite upset because they always tell me that if there’s no ban on the importation of poultry, it will undermine the local industry.”

“But in the end, it’s not about the industry, or any industry for that matter; it’s about the end consumer. And in this instance, the end consumer is, in fact, usually—not always, but usually—quite poor people.”

written by Thaabit Kamaar

This article originally published in Salaamedia Click here