SA poultry farmers must boost efficiency to compete, says US official

SA poultry farmers must raise their efficiency to compete, says Ted McKinney, undersecretary for trade and foreign agricultural affairs in the US agriculture department.

McKinney is in SA to lead an agricultural trade mission seeking to expand agricultural export opportunities in Southern Africa. He is accompanied by industry leaders from six US states and more than 30 US agribusinesses.

“This trade mission is part of the US [agriculture department’s] continuing effort to tap into new markets for US agricultural products,” said McKinney. “We are here to promote US products, but it is a two-way street. If trade does not benefit both parties, then it is not a good deal. Besides, trade creates jobs.”

Southern Africa is a net importer of farm products, most of which come from Europe, Asia and elsewhere in Africa. This presented an opportunity for the US to grow its market share and cultivate new customers for “high-quality, cost-competitive” US food and farm products, said McKinney.

SA’s trade relations with the US are complicated. An agreement with the US intended to preserve SA’s wider trade benefits under the US African Growth and Opportunity Act (Agoa) permits the US a quota of 65,000 tonnes of meat to be imported tariff-free into SA. The SA Poultry Association (Sapa) is, however, now litigating to force the SA government to reimpose tariffs following new US tariffs on SA steel and aluminium.

The new US tariffs are in breach of the agreement under Agoa, says Sapa.

McKinney told Business Day in an interview this week that Sapa’s litigation was unnecessary and it was unfair to say the US was dumping poultry in the country. Instead, he said, SA’s poultry farmers should become more efficient, suggesting that SA producers embrace technology, including new genetic strains, into their production.

Agri SA CEO Omri van Zyl disagrees with McKinney’s assessment of SA’s farmers, who he says are very good at what they do. “The US doesn’t understand the effect of the difference in scale between production in SA and the US. At the US’s volumes, it is easy to achieve economies of scale.”

Such inefficiencies as there were happened in the handling of products and in the bureaucracy managing food safety and quality, also with other products such as citrus, Van Zyl said on Tuesday. This was complicated by the compliance of SA’s food safety standards with European standards, which were different from that of the US, he said.

blomn@businesslive.co.za