The decisions we take today as individuals will affect our future, sometimes in unforeseeable ways. In the same way, the decisions our government takes now will have long-term, unpredictable effects on many people’s lives. Take for example the decision to raise the farm workers’ minimum wage from R69 per day to R105 a day. While in the short term it will put more food on tables for those lucky enough to be working, there is little doubt that it will also lead to job losses. One cannot hike wages by 52% and expect farmers to keep the same number of workers.
For years, farmers have depended on their workers to do certain manual tasks. With the massive increase in labour costs, they will instead be replacing these people with machinery. Of course, they will have to dig deep in their pockets to buy these technologies, but in the end it will pay them to do so. A friend of mine who sells agricultural equipment told me that he was importing a machine for picking macadamia and pecan nuts. Traditionally, this is a labour-intensive activity. From now on, ever more sophisticated machinery will replace these workers in South Africa.
The decision to increase wages will also influence the crops that farmers plant. Inevitably, these will tend to be less labour-intensive crops, and chief among these are likely to be vegetables, as they are particularly dependent on labour. This is bad news. Because there will be fewer vegetable growers, there will be fewer vegetables on the market, which will mean higher food prices. And the situation will be exacerbated by the fact that vegetables form such a large percentage of the average household’s food basket.
This was emphasised in a recent Sunday Times newspaper article, in which TAU SA president Louis Meintjies explained that although farmers were not price setters, they nonetheless ended up influencing prices through their choice of crops for the upcoming season. As farmers chose less labour-intensive crops, demand for those that were more labour-intensive would outstrip supply and push prices higher. So as labourers appear to gain significantly by their enormous wage hike, they could end up losing their jobs and having to pay much more for basic foodstuffs.
Green Paper: orange light?
The Land Reform Green Paper debate has officially been closed, and decisions must now be taken on how to move forward with land reform. There have already been several suggestions, some good and some not so good! These will form the basis of the White Paper – the government policy document. Much discussion remains on foreign landownership, whether or not the land claims process will be re-opened, and whether or not there should be a ceiling on land size and land holding in communal areas. Another issue is to make a final decision on whether or not to allow those farmers who have been leasing government land to be given the opportunity to own it.
Let us pray fervently that wiser decisions will be made than, for example, raising wages by more than 50% overnight.