“The Bureau for Food and Agricultural Policy research says that R105 a day is the maximum level that agriculture can afford. You can’t set the entry-level (wage) at the maximum”. Agri SA president Johan Moller said commercial farmers who could afford it would be encouraged by Agri SA to “pay more than the minimum wage and to develop proper structures for wages in which a person can move and improve himself”.
If the Minister of Labour sets the entry-level at R105 per day as is being speculated there are more than likely to be massive structural adjustments in the agricultural sector.
Carol Paton’s reports first published in Business Day today are important contributions to the on-going debate about fixing wages.
Links with extracts
Mooted 50% farm wage hike ‘puts jobs at risk’
THE Employment Conditions Commission, which makes recommendations on minimum wages, looks set to suggest a new minimum wage of about R105 a day for farm workers — a hefty rise of more than 50%.
According to research on which the recommendation is based, the wage increase will lead to higher prices for some products in the short to medium term — and significant job losses.
In the long term, it is envisaged that agriculture will experience “structural adjustment” away from the cheap labour model to one that is more concentrated, mechanised and employs better-paid workers.
The commission, comprising independent experts and representatives of the government, business and labour, has not made its recommendation public.
Chairwoman Ingrid Woolard said on Monday that the commission was conveying its recommendation to Labour Minister Mildred Oliphant, who will either approve it or send it back for further deliberation.
Ms Oliphant was expected to make an announcement within days, her spokesman, Musa Zondi, said on Monday.
Speculation is widespread in union and business circles that the recommendation will be for R100 to R105 a day. The daily minimum wage is now R69.
Employers are adamant that any wage higher than R85 a day will result in labour-intensive commodities — such as fruit and vegetables — being rendered unviable and lead to large-scale job losses.
Research for the commission by the Bureau for Food and Agricultural Policy found that even if wages were R150 a day, as some demand, most farm-worker households could not give their families enough nutrition to be considered food-secure.
Farmers must face reality of higher wages
SO FAR, only Western Cape farmers have been forced to face up to the reality of paying far higher wages in the near future.
With the imminent announcement by Labour Minister Mildred Oliphant of a new minimum wage to apply from March, that reality will soon be something all farmers need to consider. The reaction can be expected to be explosive.
A new paper by researcher Ben Stanwix, of the University of Cape Town’s development policy research unit, shows that agricultural wages in the Western Cape are typically higher than anywhere else in the country and are on average well above the minimum.
Using labour force survey data from Statistics South Africa, Mr Stanwix shows that between 2000 and 2007 farm workers in the Western Cape and Gauteng received the highest wages of all farm workers in South Africa, at levels that were close to or above the rural minimum wage.
Agri SA president Johannes Moller says particular difficulties can be expected in the vegetable sector in Limpopo, which is both labour-intensive and steeped in a low-wage business model.
He predicts that these commodities are likely to migrate over the border to Mozambique, where some Limpopo farmers already have cross-border operations.
The Bureau for Food and Agricultural Policy, a collaboration between researchers at the universities of Stellenbosch and Pretoria, states frankly that the new wage structure for agriculture will be the catalyst for the “structural adjustment” that the sector must inevitably experience.
The bureau’s paper, research conducted at the request of the Employment Conditions Commission, says: “South Africa’s agricultural sector has long been dependent on cheap and unskilled labour.
“However, it is becoming clear that this system will not survive into the future, which will be characterised by fewer, more skilled and better paid workers. The transition between these two production systems is already in motion.”
But the outlook for employment in agriculture is not all bleak, says the bureau. It strongly endorses the vision contained in the National Development Plan that if South Africa picked “the winning industries” and expanded the exploitation of its natural resources, there is the potential to create 1-million jobs.
Mechanisation is an inevitable and long-term trend, it suggests. Rather than viewing this as negative and “a threat against manual labour, it should rather be thought of as an opportunity “, in which productivity will increase, the agro-economic sector will be stimulated and “a favourable economic and political environment” will develop, the report says.
Whether a threat, an opportunity or both, what is clear is that agriculture is facing a period of accelerated change.
Recent relevant posts
Farmer paying well above entry-level wages
How refreshing when a genuine farmer tells it like it is. The ‘cost to farmer’ includes many other ‘perks’ and benefits other than the actual base wage. The so-called ‘minimum wage’ is nothing other than an entry-level wage. As this farmer shows none of his employees earn less than 26 % above the basic entry-level wage of R69 per day and some earn 80% more. Wages are 37% of the farmer’s costs and the profit margin last year was below 5%. A farmer could earn a higher return by putting money in the bank and avoid all the risks and hassles of dealing with all the laws and problems related to farming. What is surprising is that there are South Africans who are prepared to farm in the current environment and we should admire them and support them wherever possible.
New minimum farm wages from 1 March ?
According to a report in the Cape Times today it is possible that the Employment Conditions Commission (ECC) will recommend adjusted minimum wage rates for approval by the Minister of Labour before 1 March 2013. According to the report a spokesperson for the Department of Labour stated that ‘affected parties were given sufficient time to influence the process and therefore the proposed wages won’t be published for comment’.