Farmers expressed their disappointment with what many have labelled an unaffordable minimum wage. Unions were upset that the Department of Labour (DoL) did not adjust the minimum wage to R150/ day demanded during negotiations. Farm workers were worried about losing their jobs as farmers restructured operations to accommodate the higher minimum wage. The 52% increase to the minimum wage will increase the agricultural sector’s current annual wage bill of R12,9 billion by an additional R6,9 billion to R19,8 billion.
Labour Minister Mildred Oliphant announced changes to the sectoral determination for farm workers saying it would apply for a three-year period and that during year two and three, wages would increase by CPI (Quintile 1) plus 1,5%. Oliphant said the decision to increase the minimum wage by 52% was made based on a study done by the Bureau for Food and Agricultural Policy (BFAP) about the impact of farm worker wage increases on the agricultural sector.
However the study, headed by Dr Ferdi Meyer of the University of Pretoria, found that if farm worker wages increased to about R104/day, many farms would not be able to cover operating expenses. Johannes Möller, president of Agri SA, said farmers were frustrated by the fact that although research information indicated that a minimum wage of R104/day was largely unaffordable, the entry level wage had been raised to R105/day.
The Agri-Sector Unity Forum (Asuf), a representative body of all major agricultural unions, released a statement noting its disappointment with the increase in the minimum wage. “It is especially the enterprises of smaller scale and developing farmers that are now being placed under undue and unmanageable strain,” said Ntombi Msimang, chairperson of Asuf.
A day after Oliphant announced the new minimum wage, Agri SA’s deputy president, Theo de Jager, said at least 730 farm workers in Limpopo had already been dismissed.
According to reports, Agri SA indicated that the sector could shed up to 100 000 jobs as a result of the minimum wage increase. Meanwhile, farmers’ union TAU SA said the increase was neither fair nor reasonable. Louis Meintjes, president of TAU SA, said they had instructed their legal team to investigate all options to have the announced minimum wages amended.
“We believe the minister may have exceeded certain limits. A sectoral determination, valid for three years, was implemented last year.
Despite this, TAU SA and other agricultural organisations agreed to raise the minimum wage to R80/day, an increase of more than 15%. The labour minister said an exemption from the new minimum wage would be granted to farmers who could prove they were unable to afford the higher minimum wage and would be forced to shut down operations if their wage bill rose accordingly.
