The labour strikes in the Western Cape have been a long time in the making and anyone who didn’t see this coming has their head buried firmly in the sand. No one in their right mind can deny that the minimum wage is low and one can only imagine how difficult it is to live and support families on R60 a day. Quite obviously, the knee-jerk reaction from a largely misinformed public is for farmers to wave a magic wand and raise this, blissfully unaware of the catastrophe this would cause.
Studies have shown that for more than 75% of farmers in South Africa, farming is a month-to-month struggle to remain solvent. To double or treble labour costs would cause an economic meltdown resulting in massive economic repercussions, job losses and the price of food would climb to levels unimagined. This would further compound the problems of the already struggling masses.
So what is the solution? We live in a capitalist society and the producers and consumers in SA are held to ransom by the middlemen. By middlemen I mean the large supermarket chains, fertiliser and chemical companies, automotive industry and the inefficient government parastatals. The big supermarkets pay their executives bonuses in the hundreds of millions.
The CEO of Shoprite, Whitey Basson was paid a staggering R627 million last year.
We pay 60% more than anyone else in the world for vehicles and there are laws preventing the importing of immaculate second-hand cars from countries like Japan. Sasol was fined R250 million last year for collusion in fertiliser prices. Parastatals such as Eskom and SAA haemorrhage money. Let’s not even begin to discuss how the government wastes money – we have one of the highest ratios of public servant wage to GDP in the world, roughly 13% of GDP.
In Brazil this figure is 4,5% and Nigeria 4%. And what are we getting for it? Weekly service delivery protests! The examples of how middlemen are milking consumers and producers are endless. SA has lost more than 30% of its farmers since 1994. They are not making millions – they are going out of business! Farming is now becoming an economies of scale game and the only way to survive is to get bigger and to mechanise.
If farmers could afford to pay more for labour why are we seeing the painful need for retrenchments and mechanisation? The only way out of this inevitable catastrophe is to reinstitute the agricultural control councils to ensure that farmers are paid a fair price for their produce. This way, foodstuffs would become more affordable and farmers would be able to earn more and thus pay their labour a more acceptable wage.
The Competition Commission must ensure that middlemen stick to acceptable profits. For instance, dairy farmers are paid R2,75 for a litre of milk – one rarely sees milk for under R9 in the supermarkets. While dairy farmers are hoping to break even, the supermarkets have 300% mark-ups. How then can farmers be expected to pay more for labour? Mark-ups on vegetables in supermarkets commonly reach 400% while farmers are hoping to make small profits or at the very least, break even.
The plaintive wailing of farmers has been an unheeded cry in the wilderness for too long now. The time is coming when it will become clear that farmers don’t have the money to pay more for labour – and by then it will be too late. In KZN, large numbers of farmers’ crops have been wiped out by hail; and disease is a major problem in the farming monocultures of today – it is common for total crop losses to result. Trebling or doubling farmers’ wage bills will be the final straw that breaks the camel’s back.
