The Department of Agriculture will apply for funding via the Treasury’s Budget Facility for Infrastructure to expand and accelerate Onderstepoort Biological Products (OBP) production of its foot-and-mouth disease (FMD) vaccine, confirmed Dr Duncan Pieterse, director-general of finance.
By Francois Williams, senior journalist at African Farming and Landbouweekblad
The National Treasury has also helped the department identify about R400 million within its existing budget for use in the FMD campaign, Pieterse said at a media conference ahead of the budget speech on Wednesday, 25 February.
There was underspending in certain programmes within the department and some of those funds have been redirected to the fight against FMD. According to Pieterse, this will provide the department with sufficient funding until the end of the financial year.
As President Cyril Ramaphosa’s announcement of the national state of disaster due to foot-and-mouth disease was made relatively late in the current financial year, additional funding for the FMD response will only be allocated in the new financial year’s adjustment budget, according to enquiries directed to a Treasury official.
For agriculture and rural development as a spending function, the National Treasury has set aside R39,5 billion this year. This represents consolidated expenditure for both the national and provincial departments.
Of this amount, R16 billion (R13,3 billion last year) is allocated to compensation of employees, R15,3 billion (R9,8 billion last year) to goods and services, and R2,5 billion (unchanged) to capital expenditure and transfers. Current transfers and subsidies amount to R5,6 billion (R3,8 billion last year).
Over the medium term, the Treasury expects the consolidated agricultural budget to grow by 3,6% per year.
Although the fight against FMD is not explicitly mentioned in the Budget Review, the agriculture budget for medicines and medical supplies for the current financial year to the end of March has been sharply increased from just R6,6 million in the previous financial year to R127,4 million. This is likely funding used to import current consignments of FMD vaccines. In the next three financial years, the allocations for medicines and medical supplies are R108,5 million, R106,7 million and R114,8 million respectively.
The expenditure review for the department shows that spending on consultants for business and advisory services was reduced significantly in the past financial year.
When asked, a Treasury official said that the Department of Agriculture has requested additional funding from the National Treasury for the FMD response, but this is still under consideration. The matter will be addressed in the adjustment budget to be announced in the Medium Term Budget Policy Statement later this year.
It appears that there was a request for an additional R300 million. The department is also considering an application to the Treasury’s Budget Facility for Infrastructure to expand production facilities for the local manufacture of FMD vaccines.
According to the official, the national state of disaster due to FMD was declared late in the financial year, which means that the allocation of additional funds can only be considered in the adjustment budget.
In addition to the planned application via the Treasury’s Budget Facility for Infrastructure, the department has allocated R580,1 million to OBP over the medium term to develop and manufacture new vaccines and to improve product availability.
OBP is currently working to increase production of its FMD vaccine to assist in addressing the current outbreaks. Up to 18 new vaccine distribution points are planned over the medium term.
The primary source of income for OBP is the sale of animal vaccines. Revenue from vaccine sales is expected to grow at an average annual rate of 14,9% over the next three years to reach R514,9 million in the 2028–29 financial year. This growth is largely attributed to anticipated increases in export sales, improved production and marketing, and expanded access to vaccines for smallholder farmers.
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Land Reform
Of the R39,5 billion budget for agriculture and rural development, R1,113 billion has been earmarked for land reform this year, R1,203 billion for the agricultural land account, R3,947 billion for restitution and R3,687 billion for farmer support.
Over the medium term, R8,2 billion has been allocated to settle approximately 985 land restitution claims. The agricultural land account will spend R3,4 billion to purchase and redistribute 144 000 hectares of land.
The Department of Agriculture will support 180 000 land reform beneficiaries through the Comprehensive Agricultural Support Programme and the LandCare Programme. A total of R7,7 billion has been budgeted for this over the next three years.
Land Bank
The Land Bank achieved a net profit of R468,9 million in the 2024–25 financial year, which was significantly higher than the previous year’s revised profit of R61,3 million, Treasury said in its report on state institutions.
The profit mainly arose from interest earned on the state’s previous capital injection.
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