FOOD TARIFFS SUMMIT

Gerhard Neethling (BVSc)
General Manager: RED MEAT ABATTOIR ASSOCIATION
Contact: manager@rmaa.co.za

(An extract of the introduction as chairman of this summit in 2003)

According to economists specializing in strategic research in the agri-business, meat is the most complex commodity in the world and for the following reasons:

• The different nature of each of the slaughter species
• The producer/abattoir interface of the meat chain and the wide difference in supply chain structure
• Protection of producers and the impact of subsidies which distort the natural pasture advantages for beef and sheep of the southern hemisphere producers
• Quotas and sanitary barrier protection
• The wide variation in meat consumption patterns under the influence of socio economic factors, life styles and prices of various cuts.

Food tariffs is a complex matter of which price is not the only factor since the deregulation of the markets. Image and social impact are but some of the factors playing a part.

The South African red meat industry has been fully deregulated during the early nineties. Import control on red meat was abolished in Dec 1994. The only form of government intervention is health and phyto sanitary requirements and tariff protection.

The current tariff dispensation was implemented in 1992. It was concluded that protection through relative uniform and valorem rates would be appropriate. (40% for bovine and mutton and 15% for pork, 30% for liver).

Comments were made that tariffs should be fair. To determine fairness, the following four questions need to be answered in a positive way:

• Does it provide consumer choice?
• Does it stimulate local production?
• Does it provide food for the nation?
• Does it not compromise the accepted quality and safety of the commodity?

The challenge to South Africa and other developing countries, includes the understanding that population growth, urbanization and income growth in developing countries are fuelling a massive increase in demand for food of animal origin. By the year 2020 the developing countries will assume 100 million metric tons more meat than they did in 1993, dwarfing developed countries’ increase of 18 million metric tons of meat.

Exports in the red meat industry are often accused as the reason why the local industry is burdened by unattainable food safety standards. I have a different view… As an industry we have the responsibility to provide a safe and wholesome product to our consumer. Although international standards might not apply to our local industry, those guidelines are used to determine the credibility of WTO phytosanitary measures applied to prevent imports to South Africa. Thus, if a product is prevented from entering the south african market for reasons which are not controlled during local production, it is regarded as a trade barrier and not a SPS measure.

For the south african meat industry to enter foreign markets, SA must comply to a host of requirements:

• Entrepreneurs should acquire a national export culture
• Be in a position to serve the market on a sustainable basis
• Have a number of approved facilities
• Conform to the meat protocol requirements of the foreign market
• Balance the carcass
• Re –evaluate marketing strategies by disclosing niche markets

South Africa as a nett importer of meat, has to balance the interests of the consumer and the producer in providing solutions to a fair tariff structure.