Following the State of the Nation Address (12 February 2026) and the subsequent National Budget Speech (25 February 2026), South Africa’s agricultural sector finds itself at a key turning point. While the President’s address earlier this month laid out an ambitious roadmap for growth, the Finance Minister’s budget yesterday provided the “reality check” that industry leaders were anticipating.
The Biosecurity Crisis: FMD in the Spotlight
A major headline from SONA (12 February) was the classification of the current Foot-and-Mouth Disease (FMD) outbreak as a national disaster. President Ramaphosa committed to a centralized vaccine strategy, aiming to secure 28 million doses to protect the national herd of 14 million cattle.
However, experts are calling the financial follow-through in the Budget (25 February) reactive.
The Funding Gap: Wandile Sihlobo (Chief Economist at Agbiz) noted that while the intent is clear, the budget lacks a new, ring-fenced funding model for long-term biosecurity.
Expert View: Dewald Olivier (CEO of Red Meat Industry Services) criticized the reliance on redirecting R400 million from existing departmental funds. He argued that the industry requires stable, multi-year funding and a robust national traceability system to move beyond “crisis management” and restore international trade confidence.
The Diesel “Give and Take”
Diesel costs were a major focus of yesterday’s Budget (25 February). From 1 April 2026, fuel levies will increase by a combined 21 cents per litre (9c for the general levy, 7c for the RAF, and 5c for the carbon tax). For logistics and road freight, this is an immediate hit to the bottom line.
However, there is a significant win for primary production: the Diesel Refund Scheme has been adjusted.
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The Refund Boost: Effectively from 1 April 2026, farmers can now claim a 100% refund on qualifying diesel use, up from the previous 80%.
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The Catch: SARS is modernizing the system, decoupling it from the VAT system. Experts warn that this “relief” comes with a price: stricter audits. Farmers must now maintain meticulous digital logbooks to qualify for the full refund.
The “Sin Tax” Reprieve for Wine
The wine industry received a rare, inflation-linked reprieve in yesterday’s Budget (25 February).
The Hikes: Excise duties on wine and spirits were increased by 3.4% (strictly in line with CPI), avoiding the double-digit shocks of previous years.
Per Bottle: Still wine increases by 15 cents per 750ml bottle, while sparkling wine goes up by 65 cents.
Expert View: Rico Basson (CEO of South Africa Wine) welcomed the move, stating that “policy certainty is vital for a labor-intensive industry” and that CPI-linked adjustments allow for much-needed long-term planning.
The Chicken VAT Controversy
A significant point of contention for both farmers and consumers was the “Chicken VAT” decision. Despite a high-profile campaign by FairPlay and the SA Poultry Association (SAPA) to zero-rate bone-in chicken portions, the Budget (25 February) declined the request.
The Snub: While the Minister added edible offal (heads, feet, livers) to the VAT-exempt list, he kept the 15% tax on the frozen bone-in portions most consumed by low-income households.
Expert View: FairPlay’s Francois Baird described the decision as “starving our future,” citing the national child stunting rate of 28.8%. Experts from ENSafrica noted that zero-rating these portions would have cost the fiscus roughly R5 billion—less than 1% of total VAT revenue—making it “fiscally affordable.”
Human Capital and Tax “Wins”
Extension Officers: In SONA (12 February), the President promised to deploy 10,000 new extension officers. Agri SA has welcomed this “knowledge infrastructure” but specifically cautioned that the quality and technical specialization of their training will be the true decider of productivity gains.
Tax Thresholds: In a major win for small farms, the mandatory VAT registration threshold was increased to R2.3 million (up from R1 million), providing immediate cash-flow relief.
Capital Gains: The exclusion for the sale of small business assets was raised to R15 million in the Budget (25 February).
The 2026 policy season has highlighted a government that recognizes agriculture as a primary engine for the South African economy. However, as industry experts point out, there is a lingering gap between the ambition of SONA and the allocation of the Budget. For the livestock and poultry sectors, the road ahead remains uphill, while the wine and small-business sectors can find some comfort in the return to predictable, inflation-linked fiscal policy.