The Saudi Ministry of Finance has adopted new and updated regulations that retroactively set maximum limits for disbursing subsidies for infant formula and green fodder. This decision reflects the government's commitment to regulating and precisely targeting financial support to importing companies. Grace periods ranging from one to five years have been established, with these periods set to take effect at the beginning of 2026.
The strategic context for regulating infant formula and animal feed subsidies
Historically, Saudi Arabia has sought to achieve a delicate balance between food security and the preservation of natural resources. In this context, the decision to halt the local cultivation of perennial green fodder was a crucial strategic step aimed at conserving groundwater, a priceless national resource. To compensate for the shortfall in domestic production, the government has turned to subsidizing fodder imports to ensure the continued growth of the livestock sector without depleting water resources.
On the other hand, the health and food security of the emerging generations is a top priority, and therefore the state has continued to provide support for basic commodities, which makes regulating the disbursement of subsidies for infant formula and animal feed a necessary step to ensure that support reaches those who deserve it with high efficiency, and to prevent any financial waste, in line with the objectives of Saudi Vision 2030 in achieving financial sustainability.
Details of decisions and specific timeframes
The Ministry of Environment, Water and Agriculture confirmed that it has received official approval from the Minister of Finance, Mr. Mohammed Al-Jadaan, based on the recommendations submitted by the joint working group specifically formed to regulate the disbursement of delayed subsidies to importing companies. The new decision grants companies importing infant formula, as well as new applications for green fodder, a grace period of up to one year to benefit from government support. This coincides directly with the implementation of the decision to halt the local cultivation of perennial fodder crops.
The economic impact of regulating government subsidies
This new regulation carries significant economic importance and is expected to have a positive impact on several levels. Domestically, the decision will contribute to stabilizing commodity prices in the markets, thus easing the financial burden on both Saudi families and livestock breeders. It also enhances the reliability of food supply chains and encourages companies to comply with government standards. Regionally and internationally, these regulatory steps reflect the strength of the Saudi economy and its ability to manage support programs flexibly and transparently, thereby bolstering the confidence of international investors and suppliers in the Saudi market as a stable and well-regulated business environment.
Exceptions for late-arriving companies
Government directives indicated that there are special exceptions for companies that were late in submitting applications for green fodder subsidies prior to 2024. These companies were granted an exceptional grace period of up to “five years”, calculated from the date of the open accreditation, in order to ensure that companies that faced operational or administrative challenges in the past periods are not harmed.
Basic terms and requirements for importing companies
To ensure the highest standards of quality and transparency, the Ministry of Finance requires the submission of a set of official documents to qualify for the subsidy. This includes the original purchase invoice certified by the country of origin, the original customs declaration, and a certificate of released goods specifying the net weight and the actual release date.
Furthermore, the ministry added important and specific requirements, including the submission of the original "Quality Laboratory" certificate. This certificate aims to prove the suitability of infant formula for human consumption, with the requirement to accurately specify the protein and fat content and the precise age of the child benefiting from the product. The instructions also stipulated that feed and barley suppliers must submit an "Agricultural Release Certificate" detailing the energy and protein content, along with a copy of the bill of lading and a certificate from the Ports Authority confirming the exact quantities unloaded.
