AGRI-SA has slammed the move by the Department of Employment and Labour (DEL) to hike the national minimum wage for farmworkers and warned this would lead to job losses.
The organisation said the immediate increase in wages for farmworkers would be unsustainable for the agricultural sector. Agri-SA executive director Christo van der Rheede said the organisation made this clear through its inputs submitted to the department.
He said Agri SA and its affiliates took the needs of farmworkers and their families seriously. However, the poorest households needed access to employment and to retain the employment. The increase would place many jobs in serious jeopardy, which could have been avoided, said Van der Rheede.
The DEL published the annual adjustment of the national minimum wage for 2021 on February 8. In terms of the adjustment, farmworkers were entitled to a minimum wage of R21.69 per hour.
Van der Rheede said the recommendation of the minority report by the business commissioners emphasised the need for a sustainable wage increase.
Agri SA said it had brought to the attention of the department the agricultural sector was multifaceted and consisted of mostly small-scale and medium-scale farmers, with large-scale commercial farmers making up a small percentage of the industry.
“These small-scale and medium-scale farmers have already endured the effects of recent severe drought, compounded by the effects of the pandemic and it is disappointing that these crucial factors were clearly not considered,” the organisation said.
Van der Rheede said most of the commissioners seemed to have taken the incorrect view that the severity of the pandemic on the agricultural sector was minimal.
He said sub-sectors such as the wine industry had endured three bans on sales, while tobacco, wool and barley producers were not declared essential services during the hard lockdown and their activities were seriously hampered during the past months.
Van der Rheede said these industries were yet to recover from losses suffered during the hard lockdown, which had severely impacted demand.
Agri-SA said farmers in drought-stricken areas, such as the Northern Cape, Eastern Cape and Western Cape, continued to face major financial challenges and the Land Bank’s status as a going concern was at stake. The organisation said a 16 percent increase would undermine the economic growth and contribution of this sector to the country.
Van der Rheede said the double-digit increase would almost certainly compromise the role of the agricultural sector in contributing to social stability in the country.
“The Covid-19 pandemic continuous to wreak havoc and unemployment is on the increase. To approve of a 16 percent increase therefore does not make sense. The double-digit increase will grow the agricultural wage bill to above 30 percent of production costs and this cost will have to be passed onto the consumers, making food unaffordable to those the minimum wage is trying to assist.
“South Africa needs farms and farm businesses to remain financially viable during these unprecedented times and farmworkers need to remain employed.”
Union TLU SA earlier this week reached out to role-players, including Agri SA, the Southern African Agri Initiative, the LWO and mega farmers to put their heads together and discuss the situation.
“The goal will be to find solutions without compromising the productivity of agriculture or losing any unnecessary employment opportunities,” it said.
The South African Parastatal and Tertiary Institutions Union (Saptu) general secretary, advocate Ben van der Walt, said it took note of the amendment of the minimal wage for farmworkers.
“With members in the agricultural sector, Saptu welcomes a measure of fair remuneration for farmworkers, but the ability of employers in this sector to sustain the increase must, however, be considered. The affordability of labour will become a major consideration within those enterprises where profitability and sustainability is under pressure.“
“In this regard the unique composition of each farming entity will play a determining role in deciding to which extent the current employment levels will demand adjustment,” he said.
Legal experts at Cliffe Dekker Hofmeyr said next month would see the implementation of the increased annual earnings threshold determined by the Minister of Employment and Labour in the amount of R211 596.30. The experts said this represented an increase of R6 163 from the previous amount of R205 433.30, which had been in effect since July 2014.