Give poultry industry protection
A Namibia Trade Forum official has defended proposed government plans to grant interim protection to the local broiler industry against cheap imports.
Ndiitah Nghipondoka-Robiati, the National Coordinator at the Namibia Trade Forum, allayed fears of a price increase in poultry products if interim protection is given to the financially-troubled Namib Poultry Industries’ N$600 million project. She told the Economist that there are mechanisms in place to deal with the manipulation of prices by a monopoly.
She said: “When prices increase, it is not only because of the abuse of dominance by a monopoly. From the discussions I have had, the Ministry of Trade and Industry has made it clear that there will be a monitoring mechanism in place to ensure that prices are not driven by dominance of the firm. In this regard, the Namibian Competition Commission will play a crucial role in the monitoring as public interest is crucial to ensure that consumers are not exploited.”
Namib Poultry Industries (NPI) has been arguing that it is not in a position yet to compete with South American and EU imports that are subsidized and being dumped in Africa, hence it needs infant industry protection. However, some members of the public are against the granting of protection for the local broiler industry, arguing that such protection will lead to high poultry prices as NPI will dominate the market.
But Nghipondoka-Robiati believes that protection of the poultry project is important as it is aligned to the goals of the fourth national development plan (NDP4). “NDP4 has clearly articulated that sustained economic growth, employment creation and increased income equality are our overall national objectives.
“It goes on to say that the economic priorities are logistics, tourism, manufacturing and agriculture. This [ poultry project] is an initiative that addresses two of the economic priorities, namely agriculture and manufacturing. It also addresses the issue of employment by creating the X number of jobs that NPI has created and the downstream effects.”
The Namib Poultry Industries’ recently revealed that its N$600 million investment is in jeopardy if no protection is given to it against cheap imports mainly from South Africa and Brazil. The chicken project is said to have already run up losses amounting to millions since it started mid last year. Confusion has surrounded the status of the Infant Industry Protection given to the broiler industry. Namib Poultry Industries last year announced that the Ministry of Trade and Industry had already granted it infant industry protection for the next eight years only to announce early this year that no such protection was ever in place.
Namibia Mills CEO Koois Ferreira told the Economist recently that he can only speculate on the reason why Government has not implemented the Infant Industry Protection for the broiler industry despite confirming the approval in writing to NPI and its financiers through the Ministry of Trade and Industry on 28 July 2011. “We got insurance from the ministry [Trade and Industry] that it has been granted, but I can not tell you why the ministry has not implemented it yet,” he said. In the mean time, Government has agreed to utilise the Import Export Control Act, 1994 to give the poultry investment interim protection. The protection is expected to be in place sometime next month.