South Africa needs to cushion sector from US chicken deal
South Africa has described the deal struck on the African Growth and Opportunity Act (Agoa) with the US poultry industry as a win-win situation, despite the risk of job losses and the possible forfeiture of almost R1 billion in income for the local poultry sector.
While there had been concerns about the impact the 65 000 tons of US poultry exports would have on the local market, South African Poultry Association chief executive Kevin Lovell said yesterday that measures were being taken to minimise the impact on jobs and production.
Lovell said, during a briefing by the government and the poultry industry in Parliament, that if no mitigating factors were implemented, the industry would lose R900 million a year and 6 500 jobs.
He said they had a window of four to six months, before the new Agoa deal came into effect, to address the question of jobs and minimising losses in the local poultry market.
South Africa’s special envoy on Agoa, Ambassador Faizel Ismail, said the deal with the US on chicken exports had come after months of intense negotiations.
He added that the two parties had been far apart when talks on the chicken exports began, with the US pushing for 110 000 tons of exports and the South African poultry sector demanding a maximum of 50 000 tons in imports.
Compromise
At the end of the day a compromise was reached in Paris last week, where both parties had agreed on 65 000 tons.
In a statement, Trade and Industry Minister Rob Davies said the deal was a milestone. “The framework agreed by the two industries, facilitates South Africa’s continued participation in Agoa, and is a commendable effort by the poultry industry in the interest of the South African economy.”
At the press conference, Lovell admitted that they would lose about 1 million chickens a week, but the situation could have been worse if the deal had not been reached.
He said in instances where there were job losses there would be lay-off schemes for the affected employees.
However, over the next few months the industry would adopt a wait-and-see approach before assessing the situation.