South Africa’s poultry industry could lose close to 900 million rand ($72 million) in turnover and about 6,500 jobs as a result of an agreement to allow duty-free imported chicken from the United States, an industry association said on Tuesday.
The scrapping of 15 years of punitive duties on US chicken imports on Saturday will allow a quota of 65,000 tonnes a year into South Africa. South African Trade Minister Rob Davies said the impact would be manageable.
(READ MORE: S.Africa & US settle chicken business dispute)
The local chicken sector has an annual turnover of about 35 billion rand and employs around 13,000 people, according to the South African Poultry Association (SAPA).
“If we had done what we were entitled to do, which is to say we’re not interested in talking about this. More jobs could have been lost,” said Kevin Lovell, chief executive of SAPA.
The agreement will secure South Africa a place in the African Growth Opportunities Act program (AGOA), a trade benefits programme that would give duty-free access to billions of dollars of African exports for the next 10 years.
“There was no easy way out for South Africa. Either you defend the poultry industry or you defend AGOA. We had to find a balance,” Lovell said.
Under AGOA, African products such as cars, base metals, chemicals, citrus fruit, wines and nuts enter the world’s number one economy free of duty.
Davies said the government and the industry were working on minimising the impact of the deal on local producers such as Astral Foods and Quantum Foods.
“We agreed within the framework of the agriculture policy action plan that we’ll work with local poultry producers to create new opportunities for the industry in export markets,” said Davies.