|Mamaponya Motsai (SABC News) 13 March 2016
About 16 million kilograms of American chicken arrived in South Africa last week as part of the Agoa deal.
Under its preferential trade programme on agricultural goods under the African Growth and Opportunity Act (AGOA), American poultry should be allowed into South Africa by 15 March 2016. Is the deal a good or bad for SA farmers?
For many South African chicken farmers, the American poultry arriving in South Africa from the United States is a threat to their livelihoods and those of their employees.
According to Geoffrey Anderson, the CEO of Mikon farming, a local medium sized poultry company, American farmers will be benefiting from the deal, because the American poultry is by-products to dump at a profit.
Anderson says about 16 million kilograms of American chicken arrived in South Africa last week as part of the Agoa deal. This is only a portion of the 65 million kilogram expected annually for the next nine years. 65 million kilogram of chicken they can do without, Anderson explained.
He says American poultry farmers make most of their money from selling “premium” chicken parts in their country; what they sell to South Africa is just “by-products” so they can dump at a profit.
“They have already made their premiums from breast meat and wings. They have a huge market in America for breast meat and wings. They use it for burgers, chicken nuggets, schnitzels and buffalo wings,” says Anderson. He says in the American chicken industry, the leg quarter, which is the thigh and the drum, are considered to be by-products.
“So they are transporting them to South Africa at below cost prices. They don't have a market for it - so they dump it here. Basically they are dumping, that's what it is,” Anderson explained.
He says continued rising costs in producing chickens and increased international competition, make it difficult for local farmers to produce high quality products at profitable prices or even stay in business.
They don't have a market for it so they dump it here. Basically they are dumping, that's what it is.”
South African chicken farmers pay double what American farmers are paying for their chicken products and make about three times what they do for their products, he defended. This means they are not able to compete with their American counterparts.
In fact, some South African farmers are already moving towards buying chicken from international markets, re-injecting it and reselling it to South Africans. This would be cheaper for them than producing the poultry themselves. This however, would not only mean the closure of many businesses that act as support for poultry farmers but low quality chicken for South Africans.
Already by the time it reaches your supermarket, the chicken from America will be at least six week older than locally produced chicken.
“The shipping will take about six weeks to arrive here, immediately you have a product that is two months older,” says Anderson.
That means South Africans could in March, be eating chickens killed in January. Eating chickens killed months prior is only the beginning.