The battle between the local potato industry and global importers has a long-standing history, with South Africa being considered a prime destination for dumping frozen processed potato products. With the recent lapse of anti-dumping duty protection, there is a significant risk that the increased volume of below-cost frozen French fries that land on our shores from the Netherlands and Belgium will cripple South African farmers and producers – and impact our own food security.
Expressing concern for the local potato industry and pleading for local support, Willie Jacobs, CEO of Potatoes South Africa (PSA), shared, “South African producers have been experiencing many challenges brought on by Covid-19, the cost-price squeeze, rising input costs and most recently, the riots in parts of the country. Furthermore, our producers don’t benefit from the financial support afforded to EU farmers by their governments and simply cannot compete with below-cost products being dumped in our country. With less demand for local produce, there will be a ripple effect on livelihoods and job-losses, not to mention the effect on the economy.”
Another critical factor to consider is the longer-term threat that agricultural dumping poses to South Africa’s already concerning state of food security. Because agricultural dumping usually results from a high volume of surplus potato products not usable by the countries of origin, we need to be cognisant of the fact that this occurs in cycles. Once excessive stocks are depleted, South Africa will enter periodic shortfalls, resulting in consumer price spikes. South African producers will need to cater to local demand once more, but price volatility will deter them from entering the market again. Reaction from producers’ level is also very slow and can take years to build up production again.
The extended importation of cheap potato products will have reduced the demand for the local potatoes and our potato farmers will be forced to pull back on planting new crops, leading to a risk of the seed pipeline running dry. Once the seed pipeline is depleted, it takes 5 years before commercial potatoes are available again, considering the time it takes from seed to potatoes being delivered to the factory door. This not only poses a risk of unavailability of potatoes but will naturally drive up costs, ultimately disrupting the supply chain and negatively impacting the consumer.
“The potato industry pleads with South Africans to support the local agricultural sector, as this is the most powerful and promising measure of combating the effects of agricultural dumping, which directly threatens our economy and livelihoods, says Jacobs”.
The South African potato industry provides employment to an estimated 45,000 permanent and seasonal labourers and is worth approximately R7,5 billion at primary level, and R26 billion at secondary level. On average, the industry plants between around 50,000 hectares of potatoes, with the crop accounting for 45% of the total vegetable crops produced in the country. This equates to a contribution of around R8,5 billion to the South African economy.
Another reason to insist on buying local produce is the environmental benefits, with the protection of South Africa’s natural ecosystem, a smaller carbon footprint associated with the distribution of the product, and the knowledge that locally produced products are also typically linked to more environmentally friendly practices.
More than that, by buying and selling locally, we will ensure that the revenue remains within South Africa, allowing us to drive and sustain our local economy, secure and promote jobs, and ultimately rebuild our country. The South African agricultural sector, and more particularly, the local potato industry, depends on the collective efforts of consumers, businesses, and our government to embrace and support local growers and producers.