• July 5th, 2020

New poultry import restrictions meant to grow local capacity

WINDHOEK - The Minister of Industrialisation, Trade and SME Development Tjekero Tweya this week confirmed he will soon introduce new poultry product import restriction measures aimed at supporting domestic production, which in turn will restrict the issuing of the import quotas. The goals of the new measures are to support the “Growth at Home” strategy that aims to upgrade, modernise and add value to raw materials to ensure market access at home and abroad, and to create a conducive environment for the Namibian industry to grow exponentially and to achieve high levels of productivity. Although no specific date was given for the implementation of the new measures, they are expected to be enacted by no later than March next year. 

During a media briefing on Tuesday, Tweya explained that on a macro-economic level, the goal of initially providing Infant Industry Protection (IIP) to the poultry industry was to reduce the trade balance deficit, creating much needed employment and to diversify the economy. At a micro economic level, however, the fundamental aim was to ensure food security, affordability and access of poultry products in Namibia.

Tweya further noted that a ministerial committee was established to agree on the standard operating procedures for the importation of poultry products, as well as the monitoring of the new import restriction measures. The committee is made up of officials at the trade ministry; Ministry of Finance [Customs & Excise]; Ministry of Agriculture, Water and Forestry [Directorate Veterinary Services]; Namibia Competition Commission, and Agricultural Trade Forum and the Namibia Trade Forum. The terms of reference of this committee is to develop the rules of procedure, monitoring prices [farm gate and retail], collecting statistics, identifying a champion to ensure unity of vision and enforcement, as well as developing a poultry industry master plan.

The ministry of industrialisation, trade and SME development, through a cabinet decision, instituted quantitative restrictions on the importation of poultry products into Namibia from May 2013. The restrictions initially made provision for the importation of a maximum of 600 tons of poultry products per month and was later increased to a maximum of 900 tons per month in November 2013 and again increased to 1500 tons in May 2015, 

“This was an interim measure considered to allow the local industry to penetrate the Namibian poultry consumer market and to protect the Namibian poultry industry against foreign dumping and unfair trade,” Tweya explained. 

It is estimated that the Namibian population consumes an average of only 13kg per capita of chicken meat, which is much lower compared to other African markets exceeding 26kg per capita. The aggregate demand in Namibia is estimated at 3 100 tons of broiler meat per month. 

Only one large-scale chicken meat producer presently operates in the Namibian industry, catering for 67 percent of Namibian demand. In terms of commercial Namibian broiler meat production, this represents a mere 1.2 percent of total South African production. 

Said Tweya: “In this regard, 600 SMEs since 2013 have developed in the meantime as a result of the industry in Namibia and 730 in full employment from only two operations, namely Oyeno & Namibia Poultry Industry (NPI)”.

According to a study conducted by Cirrus in 2018, the NPI investment contributed 0.71 percent to Namibia’s GDP, which Tweya hailed a significant amount, particularly in a time of recession. 
“This contribution to the GDP is consequence of a government decision imposing Infant Industry Protection to the poultry industry by way of implementing the Import Export Control Act,” said Tweya. 

Meanwhile, the trade ministry, in consultation with the minister of agriculture, water and forestry authorised the Meat Board of Namibia to administer the poultry scheme of the Gallus domesticus species in terms the Import and Export Control Act. 

Tweya, however, noted that subsequently, his ministry received complaints from importers regarding the administration of the poultry quota by the Meat Board of Namibia and a legal opinion was sought from the Office of the Attorney General in February 2019.  

“In this regard, the AG provided an opinion on the matter, advising the MITSMED minister to withdraw the authorisation of administering the poultry scheme from the Meat Board of Namibia. The Meat Board of Namibia, as a result, relinquished its authority on June 30, 2019, and the delegated authority was subsequently returned to MITSMED under the Import/Export and Trade Measures subdivision as of 1st July 2019,” said Tweya. 

He added that the opinion of the AG that restored the administration of the poultry quota from the Meat Board to MITSMED triggered a legal challenge brought in front of the government, Meat Board and Namibia Poultry Industry by the South African Poultry Association, and the matter was in court since 2014. 

“This created uncertainty in the market environment, and investors were unsure about the legal instrument which created the lack of legal certainty. Since then, there was a sudden increase in the number of importers and complaints of discrimination on quota allocation. This paved the way for an increase in stocking piling, which the measures intend to address. This triggered high domestic prices in the industry, followed by the lack of a master plan to coherently address and enhance productivity and growth of the poultry industry,” said Tweya. 

The trade minister elaborated that in mitigating the problems, the industry was consulted on two occasions: in August and September 2019, respectively, focusing on the interim measure and standard operating procedures to be applied. 

“The registration criterion was announced through the media detailing all the application processes, including being duly registered with BIPA, and that these companies were expected to be in good standing. The most pressing matter would be to increase local buy and any proposed allocation should address this requirement,” Tweya concluded. 

Edgar Brandt
2019-12-05 08:19:33 | 6 months ago

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