Cape Town – Increased poultry tonnages shipped from the US under the Agoa agreement will negatively affect job retention, according to the Food and Allied Workers Union (Fawu)
“It is clear that the much higher ‘dumped’ poultry will negatively affect job retention and may cause major downward pressure on wages. It will also push certain local firms to the edge, and some may close shop,” Fawu said in a statement.
In his budget speech in Parliament on May 21, Minister of Trade and Industry Rob Davies said that the US Senate passed a bill for the African Growth and Opportunity Act to be extended for a period of 10 years and for SA to be included.
READ: Value of Agoa is diminishing, says Rob Davies
South Africa has imposed anti-dumping tariffs of above 100% since 2000 on certain products derived from a chicken carcass. SA’s rationale for imposing duties is the fact that, due to the local market, all cuts of the chicken are valued equally.
In the US white meat - more commonly known as chicken breasts - fetches a premium price due to market demands. Brown meat, known as bone-in chicken, is a surplus product which allows the US to enter the SA market with cheaper prices.
The South African Poultry Association has entered negotiations on the premise that an unrestricted influx of US poultry undermines the SA market and will essentially “remove the third largest producer from our market in volume terms", the association's CEO Kevin Lovell told Fin24 in an exclusive interview in March.
Fawu has warned that the new Agoa arrangements shouldn’t undermine economic development and employment sustainability, directly or indirectly, in the poultry sector of South Africa.
“Fawu’s stance is informed by its policy decisions that the manufacturing industry in this country must be defended and expanded and food security needs to be entrenched as a matter of government policy imperative.
“Our Government is now being asked to subject our poultry sector to increased dumped poultry tonnages from the USA, more than
double the allowable tonnage limit under the current Agoa agreement,” Fawu said.
At a Parliamentary briefing on April 10 Davies acknowledged that the issue was “far bigger than chicken”, and said it did not mean that SA would dismiss the interests of the large poultry industry and its thousands of jobs.