Minister Willie Okhanp, who took office as Minister of Agriculture on June 30, confirmed that the executive director of Onderstepoort Biological Products (OBP), Dr. Jacob Modumo, has been suspended by the OBP board of directors.
A statement released on Saturday by the minister's office stated that on Friday, he held an emergency meeting with the OBP board of directors, where he presented information regarding alleged serious irregularities related to the pricing of foot-and-mouth disease vaccines concerning the OBP executive director.
The Minister reported that the board of directors notified the executive director of the intention to suspend him and gave him five days to explain why he should not be suspended. The minister's office added that if the reasons provided are deemed insufficient, the suspension will remain in effect until an independent investigation is concluded.
OBP, being a state institution, is responsible for the import and production of veterinary vaccines. It imports and sells foot-and-mouth disease vaccines to farmers, and under its terms of operation, it should not profit from this. Currently, South Africa imports the vast majority of its foot-and-mouth disease vaccines from two companies: Biogénesis Bagó from Argentina and Dollvet from Turkey.
According to GroundUp, the accusation against OBP is that it purchased foot-and-mouth disease vaccines from Biogénesis at a price of R45 and subsequently sold them for between R70 and R130.
The Ministry emphasized that the Minister made it clear that OBP must not unduly profit from the foot-and-mouth tragedy currently facing farmers. Given that South Africa is experiencing the largest outbreak of foot-and-mouth disease in the country's history, the government is obligated to protect and support farmers by ensuring the procurement and availability of vaccines in the most economical and efficient manner.
Okhanp stated that as a state entity, OBP is obliged to act in the public interest, meaning there should not be excessive markups when selling foot-and-mouth disease vaccines, especially during a period when farmers are already bearing a significant financial burden from this outbreak.
He stressed that the suspension is a precautionary measure and no conclusions have yet been drawn against the director.
Two institutions in Onderstepoort are involved in vaccine production: OBP and the Agricultural Research Council (ARC). OBP handles the procurement of vaccines (including foot-and-mouth disease vaccines) and the production of some vaccines (but not foot-and-mouth disease vaccines). In 2013, OBP received a grant of 500 million rand for the development of production capacity, but an audit revealed that a significant portion of these funds was unaccounted for.
ARC produced foot-and-mouth disease vaccines until approximately 2005 but lost its production capacity due to mismanagement. This year, ARC resumed the production of foot-and-mouth disease vaccines and is currently producing small quantities, in tens or hundreds of thousands of units.
South Africa has approximately 12–14 million head of livestock. Optimal protection against foot-and-mouth disease requires vaccination twice a year, which translates to an annual need of approximately 25 million doses. These volumes can easily be supplied by Biogénesis and Dollvet.
Furthermore, farmer organizations sued the Department of Agriculture to allow farmers to purchase vaccines directly. In May, the Gauteng High Court in Pretoria issued a temporary ruling in favor of the farmers. This intense legal battle became a key factor in the loss of the position of Minister of Agriculture by John Steenhuisen. After reaching an agreement with Okhanp, farmers can now acquire vaccines through veterinarians and are required to provide the Department of Agriculture with information on how these vaccines are used.