Business slams minimum wage hike
BUSINESS / 05 Feb '13, 08:00amBy: Ann Crotty.
Farmers’ organisations and business slammed the government’s decision to increase minimum wages of farmworkers by 52 percent to R105 a day from R69 a day, which they say will destroy jobs, while Cosatu and community organisers welcomed the move and said they looked forward to further engagement with the government in a bid to improve the living standards of farmworkers.
Carl Opperman, the chief executive of Agri-WesCape, said the move reflected the fact that agriculture “is very low on government’s radar” and warned that it would result in widespread job losses.
Labour Minister Mildred Olifant says farmers can apply for exemption from the sectoral determination of R105 a day. Photo: Masi Losi. Credit: Independent Newspaper Limited
“We will have to shed whatever surplus labour there is on the farms. That will now become the government’s responsibility,” he said.
He said that the agricultural labour bill for one year would increase by R6 billion.
Opperman referred to the uncertainty surrounding the issue of land reform, the continuous steep increases being demanded by Eskom and this wage increase, and questioned: “How serious are they (government) about agriculture and land security?”
A note issued by finance group Nomura International described the increase as “definitely negative”.
“The move is negative both because it probably takes a large number of farmers into an uncompetitive state versus import prices and it also shows once again the direct link between violent strike action and capitulation by government.”
Nomura added that the increase was above the increase in productivity and was likely, given the tight margins in the agricultural sector, to lead to more direct price pressures.
At a press conference yesterday, Labour Minister Mildred Oliphant acknowledged that business and farming organisations had not agreed with the recommendation to raise the daily wage to R105, but noted that because a majority of the members of the Employment Commission had agreed, in terms of the law the minority was bound by the decision.
Tony Ehrenreich, the head of Cosatu in the Western Cape, said that he was shocked that Agri SA had only offered R94 a day. “What is clear is that Agri SA was prepared to risk a low-scale war between farmers and workers.”
He said that the increase “will change industrial relations on farms forever”.
Ehrenreich urged the government and the industry to work with labour to interrogate the value chain and see what section of the value went to different parties in order to determine what scope there was for farmers to get better prices.
He said Cosatu rejected the announcement by Agri SA that farms would retrench workers as part of their “restructuring” process and cautioned Agri SA that these threats would see Cosatu calling for the seizure of farms of “bad employers” to be redistributed to workers and “good farmers”.
A coalition of community organisations welcomed the increase, but noted that many farmworkers “remain adamant that R105 a day does not allow them to feed their families and live in dignity”.
The Coalition of Organisations of Farmworkers Solidarity said that the vast majority of farmworkers believed that the government continued to listen to the farmers and not to the demands of the poor.
The workers believed that the government listened to conservative research institutions and agribusiness that argued that farmers could not afford the increase and that farmers would struggle if they paid a living wage to farmworkers.
The minister said farmers could apply for exemption from the sectoral determination if they submitted proof that they could not afford it. The new wage, which will take effect on March 1, will apply to all agricultural sectors except forestry.