By Nathan Geffen.
Minister of Agriculture Willie Aucamp, who took over the agriculture portfolio on 30 June, has confirmed that Dr Jacob Modumo – acting CEO of Onderstepoort Biological Products (OBP) – has been suspended by the board.
“On Friday … I convened an urgent meeting with the board of OBP wherein I presented the board with information of allegations of serious misconduct relating to the pricing of foot and mouth disease (FMD) vaccines against the acting CEO of OBP,” reads a statement released by the minister’s office on Saturday.
The statement said the board gave the acting CEO notice of its intention to suspend him, and has “afforded him five days to provide reasons why he should not be suspended”.
“Should these reasons be insufficient, the suspension will remain in place pending an independent investigation.”
Not supposed to sell ‘at a profit’
OBP, a state institution, is responsible for importing and manufacturing animal vaccines.
It imports and sells FMD vaccines to farms, and is not supposed to do so at a profit.
South Africa currently imports the vast majority of its FMD vaccines from two companies, Biogénesis Bagó in Argentina and Dollvet in Turkey.
GroundUp understands that the allegation against OBP is that it bought FMD vaccines from Biogénesis at R45 and sold them for between R70 and R130.
The ministry stated: “The minister has made it clear that the OBP should not unduly profit from the tragedy of FMD currently facing our farmers. Given that South Africa is experiencing the largest FMD outbreak in the country’s history, the government has a responsibility to protect and support farmers by ensuring that vaccines are procured and made available in the most cost-effective and efficient manner possible.”
“As a government entity, OBP has an obligation to act in the public interest, “it said.
“There should therefore be no exorbitant markup on the sale of FMD vaccines, particularly at a time when farmers are already carrying the significant financial burden of this outbreak.”
Aucamp emphasised the suspension is precautionary and no finding has been made against the CEO.
Legal victory
Farmer organisations took the Department of Agriculture to court to allow farms to purchase vaccines directly.
In May, the Gauteng High Court in Pretoria gave an interim ruling in favour of the farmers.
The acrimonious case was a key factor in John Steenhuisen losing his position as agriculture minister.
Following an agreement with Aucamp, farmers can now buy vaccines via vets and must provide the Department of Agriculture with details on how the vaccines are used.
A history of scandal
OBP has a troubled history. It manufactured FMD vaccines until about 2005.
Through mismanagement, it lost its manufacturing capacity.
Then, in 2013, it was allocated a R500 million grant to develop its capacity. An audit found that a large portion of the money was unaccounted for.
OBP still does not manufacture FMD vaccines.
OBP is not to be confused with the Agriculture Research Centre’s (ARC) institution at Onderstepoort, a separate state entity. The ARC currently manufactures a small number of FMD vaccines – in the tens or hundreds of thousands so far this year.
South Africa has about 12 to 14 million cattle. For optimal protection against FMD, they need to be vaccinated twice a year, which means about 25 million doses are required annually. These volumes can easily be met by Biogénesis and Dollvet.