Wage increases will hurt agriculture, warn farmers

Commercial farmers have warned that increased minimum wages for farm workers will result in further job losses in the sector and weaken South Africa's ability to maintain agricultural output to satisfy both domestic and export demands.

Labour Minister Membathisi Mdladlana announced the increases of between 9 and 10 percent in minimum wages for farm workers on Wednesday, effective from 1 March 2004.

The new increases should be regarded as "a people's contract to create work and fight poverty, because it protects the most vulnerable of workers by setting minimum wages and acceptable working conditions", said a statement from Mdladlana's office.

Farmers' union Agri SA believes the increases will lead to further job losses in the sector, which is already struggling to come to terms with the effects of drought and the rising cost of inputs.

"More job opportunities will be lost, which the country and agriculture cannot afford. Smaller, upcoming farmers really are battling to survive and cannot afford all these minimum wage proscriptions ... they are going to have to lay off labour," said Agri SA president Japie Grobler.

He stressed, however, that "we'll have to abide by the law, we'll have to pay the minimum wages".

Mdladlana acknowledged the impact drought has had on farmers in many areas and indicated that those farmers who were unable to introduce the increases would have to present their cases to the Department of Labour and apply for an exemption. These would be dealt with on a case-by-case basis.

He noted that "there is a level of flexibility within the [minimum wage] determination, so as to ensure conditions are in place that allow for job creation. Examples of this flexibility include the split wage levels, recognising the different economic challenges facing farmers in different parts of the country, and the room given to farmers to apply for variations [from the set minimum wage]".

Mdladlana warned that "the African National Congress government remains committed to the protection of these vulnerable workers, so legislation will be enforced". He added that the level of compliance by farmers to the minimum wage since 2001 had been generally good, with a compliance rate of between 65 and 90 percent.

When the farm worker wage determination was first promulgated in December 2001, minimum wages were set at R800 (about US $120) for workers in those areas of the country where average household income was more than R24,000 (about US $3,600) per annum - categorised as Area A - and at R650 (about US $98) for areas where average household income was less than R24,000 per annum - Area B.

"The annual increment to the minimum wage means that workers on a minimum wage in Area A will receive a 9 percent increase, calculated on an hourly basis, or a R71.58 [about US $11] increase per month, while minimum wage Area B workers will get a 10 percent increase, calculated on an hourly basis, or R63.65 [about US $9] increase for a full month's work)," the labour department said.

Grobler said the wage increases, coupled with the cost of inputs and the impact of drought, were "making it impossible for commercial farmers to make money, and impossible for new emerging farmers, black farmers, to abide by all these rules and regulations".

"We want to be self-sufficient and export food but ... on the one hand we work in a free market environment when it comes to our inputs, and on the other when it comes to your labour you are told what to do," Grobler said.