South Africa Agoa threat sees calls for creation of small-scale poultry farmers

South Africa’s largest poultry producers should maintain their dominance in the market so that the country remains globally competitive, the SA Poultry Association (Sapa) said on Sunday.

This comes as the US threatened on Friday to suspend South Africa’s benefits from the African Growth and Opportunity Act (Agoa) unless there was agreement on outstanding issues around meat, poultry and pork within 60 days.

 

The surprise move prompted discussion about the state of the poultry industry in SA, with voices raised in favour of encouraging the development of black, small-holding chicken farmers to enter the space to feed the country’s ever-growing demand for chicken.

Sapa CEO Kevin Lovell said curbing imports would create more domestic opportunity, but economies of scale still applied. "Small producers won’t necessarily have the economic efficiencies required to compete," he said.

Mr Lovell proposed that the government should manage imports. The association is also pushing for poultry to be declared a designated product for government procurement.

This would benefit smaller players as they would require permanent government support, he said.

According to a Sapa submission to Parliament, South Africa is the ninth-biggest poultry importer in the world, importing 20% of consumption, mostly as surpluses and waste products, and exporting 2% of production.

Mr Lovell said small farmers could be supported in different ways. All chicken production was based on an oligarchic model and small did not fit into the "volume game". In SA, the margins were lower than in other countries.

"Small not just in poultry, but in farming, is not good; it represents a utopian view of the world," Mr Lovell said.

The Food and Allied Workers Union expressed its support for the poultry industry in SA, saying it employed between 60,000 and 80,000 people and these jobs had to be protected. General secretary Katishi Masemola said while the union would support small-scale entrants to the market, the barriers to entry were high.

"The issue is will they survive in the market; will they gain access to the big retailers; will they meet health and safety standards?" he said.