Lloyd Phillips
3 minute read
17 Feb 2021
1:14 pm

Farmer organisations explain opposition to new minimum wage

Lloyd Phillips

New minimum wage for farmworkers could increase South Africa’s average agricultural wage bill to above 30% of production costs.

Picture: iStock

The new R21,69/hour national minimum wage (NMW) for farmworkers, which will come into effect on 1 March, has been met with concern by major organised agriculture bodies in South Africa.

TAU SA’s president, Henry Geldenhuys, said in a statement that the Department of Labour and Employment (DLE) had “pushed through” the 16% increase despite various stakeholders in the agriculture sector having submitted motivations for why the new rate for farmworkers should not be equal to the minimum wage for all other business sectors.

“None of the role players wants workers to earn an unreasonable remuneration or to lose their jobs. We only want government to realise that farmers cannot afford the wage increases.

“We received feedback from a wide range of farmers and other role players in the [agriculture] value chain [to] indicate that they will be forced to make amendments to accommodate these changes.

ALSO READ: Agricultural sector to deliberate on new minimum wage for farm workers

“Unfortunately, most of them have decided to close all labour-intensive divisions, like growing vegetables, to switch to more mechanised ways of producing food.”

He added that TAU SA would be declaring a dispute with DLE minister, Thembelani Nxesi, regarding the “irrational” increase and Nxesi would be asked to place the increase on hold until the dispute was settled.

Farmer’s Weekly reported recently that Agri SA’s executive director, Christo van der Rheede, said the immediate increase in wages for farmworkers would be unsustainable for South Africa’s agriculture sector.

Van der Rheede warned that the new minimum wage for farmworkers would increase South Africa’s average agricultural wage bill to above 30% of production costs.

This increase would, in turn, be passed on to consumers, making food unaffordable for the people that the new minimum wage was ostensibly trying to assist.

Thandokwakhe Sibiya, strategic support executive at the South African Farmers’ Development Association, described the increase as “quite steep” and said it would “definitely hurt farmers”, especially those at small-scale level.

“This is likely going to force farmers to be creative in terms of how they allocate and utilise labour resources, which includes reducing hours worked and stretching [the] reduced workforce to cover more work.

“Sadly, it might also compromise the application of inputs in the [sugar] cane crop, which will result in reduced yield and revenue. Government will need to consider support measures for farmers that are vulnerable,” he said.

Forestry South Africa’s executive director, Michael Peter, said the organisation had made a submission to the DLE to request a “phasing-in period” for the equalisation of the forestry and agriculture minimum wages.

ALSO READ: National Minimum Wage: Unhappiness about increase for farmworkers

This was intended to try and minimise any further major job losses in the forestry sector, following those already lost due to the Covid-19 pandemic’s previous economic impact.

“Given the steep rise in forestry worker wages, some employers might find themselves in a situation where they cannot afford the [minimum wage]. In such a case […] an exemption process has been launched. It is very important to note that if an employer is trading at a loss, the exemption will automatically be granted.

“The exemption process is valid for 12 months and works on 90% of the new minimum wage of R21,69 [an hour]. Our members are encouraged to interrogate the regulations on exemptions and use the process where appropriate,” Peter said.

This article was republished from Farmer’s Weekly with permission 

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