Government ignores sector inputs on minimum wage

SA Graan/Grain editorial staff
Published: 26 February 2021

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Minister of Employment and Labour, Thulas Nxesi, gazetted the new national minimum wage for farmworkers early in February at an increase of 16% to R21,69 per hour. This means that the minimum wage for farm workers is now for the first time equal to the national minimum wage.

Following the announcement, Agri SA brought to the attention of the department that the agricultural sector is a multifaceted sector that consists of mostly small-scale and medium-scale farmers, with large-scale commercial producers only 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,’ Agri SA said.

‘If farmers cannot produce food affordably and employ agricultural workers on a large scale, this will result in a food crisis and large-scale social upheaval as food insecurity and unemployment start to take root. The government will need to decide whether it is serious about addressing unemployment. The COVID-19 pandemic continues to wreak havoc and unemployment is on the increase. To approve a 16% increase therefore does not make sense,’ the statement further read.

Agri SA highlighted the fact the double-digit increase will grow the agricultural wage bill to above 30% of production costs. This cost will have to be passed on to consumers, making food unaffordable to those the minimum wage is trying to assist.

In December 2020 TLU SA commented against implementing an increased minimum wage and suggested the government should completely set aside the minimum wage until the economy and employment rates picked up. Various other role-players also commented against the amendment.

‘It seems that the National Minimum Wage Commission paid no heed to any of the comments from the agricultural sector,’ said Henry Geldenhuys, the president of TLU SA. ‘The ability of employers – farmers – to absorb these levels of remuneration, is impossible. We shudder when thinking of the consequences of unemployment in South Africa when the government implements the increased hourly rate.’

‘More than ever before, what the country needs now is increased employment, resulting in counter-poverty outcomes. The agricultural sector – and all other private industries – should rather be supported by the government to create sustainable employment opportunities,’ he added.