Agriculture department teams up with STC to import animal feed |16 May 2023
- Livestock subsidy scheme to be phased out
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The Agriculture department in collaboration the 91Ï㽶ÊÓƵ Trading Company (STC) will, as from the end of June 2023, import and distribute animal feed to local livestock producers. Consequently, the animal feed subsidy, that was in application since 2020, will be phased out by June 30, 2023.
According to the Agriculture department, the forecast price for feed, for both poultry and pigs, will be below the current prices that farmers are paying before application of subsidy.
The department and STC intend to engage in such imports for an initial period of 6 to 12 months, or until there is an improvement in the market for animal feed.
This decision to intervene on the market was found necessary as the current situation of feed supply in the country is not sustainable, and is hindering access to feed by a significant number of farmers.
The Ministry of Finance, National Planning & Trade and Cabinet have been informed of this decision.
Failures of the current system of subsidising feed include:
• the fact that despite improvements after the Covid pandemic, namely in the cost of raw materials, stability in forex rates, improvements in the cost of shipping, feed prices on the local market have not reduced. The ministry has approached suppliers regarding this issue, but so far, no significant reduction in price has been offered, requiring continued application of subsidies to allow farmers to purchase feed;
• the current system leaves out many small livestock farmers who because of their size and non-registered status did not qualify for subsidies, resulting in less local production;
• the subsidy system is a major expense for government budget. To date, the cost of feed subsidies stands at R15 million, and it is forecast to reach R95 million by end of the year if it continues under the same conditions. The Minister for Finance has made it clear that this level of subsidy can be supported under the budget only as a temporary measure, and should reduce by mid-year 2023.
The Agriculture department has been allocated appropriate storage facilities at Providence, and will work with STC for import and sale logistics. It is expected that the undertaking will not create additional cost to government as all feed would be sold for a profit and all expenses recovered.
The department will, during the coming period, provide all farmers with information on the location and the manner that feed sales would be carried out.
Other entities wishing to participate in sales can also contact the department or STC.
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Press release from the department of Agriculture