What the 2026 Budget Means for Agriculture and Food Security

When Finance Minister Enoch Godongwana tabled the 2026 National Budget in Parliament on 25 February 2026, the speech marked what Treasury itself called a “turning point” in South Africa’s fiscal trajectory. After years of expanding debt and slow growth, government finances are stabilising, the budget deficit is narrowing, and economic growth forecasts are modestly improving. 

But for South Africa’s farmers, agribusinesses, and the millions of households dependent on food security, the scorecard is mixed.

THE ECONOMIC BACKDROP: STABILITY FIRST

Fiscal consolidation featured prominently in the 2026 Budget. Treasury projects the national debt to peak and then decline over the medium term; unemployment remains stubbornly high, and economic growth is expected to rise from around 1.6% this year to about 2% by 2028. 

For agriculture, a stable macro-economic environment matters, as it can lower interest rates, improve investor confidence and enhance the terms on which farmers and agri-businesses access credit and working capital. But stability alone doesn’t assure growth — especially when structural risks such as logistics bottlenecks, energy constraints and disease outbreaks remain. 

INFRASTRUCTURE INVESTMENT – A CRITICAL POSITIVE

One of the undeniable positives of the 2026 Budget is the government’s continued emphasis on infrastructure spending, particularly in logistics and water resource management. Investments aimed at beefing up bulk water systems, refurbishing ageing infrastructure and enhancing distribution networks have direct relevance to agriculture. Water security is central to crop production and livestock farming, which in turn underpins national food availability and economic resiliency. 

In sectors where logistics networks are poor — affecting everything from maize shipment to fresh produce exports — better infrastructure can reduce cost burdens and improve market access for both large and small producers. This is a long-term game, but a necessary one.

A CRUCIAL OMISSION: BIOSECURITY AND DISEASE RESPONSE

Perhaps the most glaring gap in the Budget — and one that has drawn sharp criticism from agriculture stakeholders — is the limited attention paid to biosecurity and disease control.

Foot-and-mouth disease (FMD) continues to disrupt livestock value chains, yet detailed, ring-fenced funding for disease surveillance, veterinary services, vaccine procurement or public-private partnership mechanisms was largely absent from the speech. 

This omission matters deeply. Biosecurity failures not only weaken export competitiveness but also directly erode household food security, particularly in rural areas where livestock are both a source of income and nutrition. Unless strategic investment in animal health systems is prioritised, the sector’s resilience — and by extension broader food system stability — will remain vulnerable.

FOOD SECURITY, SOCIAL PROTECTION AND HOUSEHOLD PRESSURES

On the social front, the Budget maintains funding for critical programmes such as the National School Nutrition Programme and social grants, which help mitigate food insecurity for vulnerable households. Social grant allocations will reach nearly R293 billion in 2026/27, cushioning millions from the worst impacts of inflation and food price pressures. 

Yet many families — especially those earning minimum wages — still spend a disproportionate share of their income on food, often without enough left for other essentials. Recent analysis highlights that the rising cost of basic food baskets continues to stretch household budgets, reinforcing the need for targeted economic support measures that go beyond macro-economic readings. 

TAX MEASURES AND AGRI-BUSINESS ENVIRONMENT

The Budget also delivered relief rather than increases in taxes, with personal income tax brackets adjusted for inflation and previously proposed tax hikes withdrawn. While this may support consumer spending — and by extension domestic demand for food — it does not directly translate into incentives for agricultural producers or processors themselves. 

Calls from industry groups for specific VAT changes — such as making staple foods like chicken VAT-free to enhance affordability — were not met in this Budget. That’s an area where future policy adjustments could make a tangible difference to household food security and dietary outcomes. 

THE WAY FORWARD: STRATEGIC ALIGNMENT IS ESSENTIAL

The 2026 Budget does many things right in the context of macro-economic management — it stabilises debt levels, narrows fiscal deficits and channels funds into infrastructure that matters for agriculture. But where it falls short is in strategic sectoral investment that targets the root causes of vulnerability in South Africa’s food systems: biosecurity gaps, fragmented value chains, limited access to competitive inputs and persistent cost pressures on smallholder farmers.

For sustainable agricultural growth and improved food security, the sector needs more than macro stability — it needs focused, measurable interventions that strengthen productivity, market integration and resilience in the face of shocks.

Budget 2026 may lay the fiscal foundation for future growth — but without a sharper sectoral focus, the road to a food-secure South Africa remains only partially paved.

____________________ _____________________________ _________________________

Dr Thulasizwe Mkhabela is a Director and Senior Researcher at Outcome Mapping (thula@outcomemapping.co.za;  thulasizwe.mkhabela@gmail.com). He is alsoan Honorary Research Fellow with the African Centre for Food Security at the University of KwaZulu-Natal (MkhabelaT1@ukzn.ac.za) and an independent agricultural researcher and policy analyst with extensive experience in South African and African agricultural & development issues.

Disclaimer: The views expressed in this article is solely that of authour, and does not necessarily reflect the views of Mzansi Agriculture Talk, their employers, or other associated parties.