Growth in the agricultural sector may bode well for some, but farmers are insisting the 16% increase in the minimum wage for farm workers will lead to retrenchments.
GDP data released this week by Stats SA called the agricultural sector "one shining star in 2020", reporting that commercial agriculture expanded production by 13.1% that year. In the last quarter of 2020, the sector grew by 5.9% (annualised seasonally and adjusted quarterly).
Despite this, farm workers are in a precarious situation with regards to the increased minimum wage in the agricultural sector - the rise in the hourly rate may offer those who retain their jobs some financial respite, but for others it may cost them their jobs.
Last week the national minimum wage for farm workers was increased by employment & labour minister Thulas Nxesi from R18.68 to R21.69 an hour. This equates to a salary of R4,229.75 a month based on an average 195 hours worked.
According to a South African Human Rights Commission report on farm workers and human rights published in 2019, the minimum wage for the period March 1 2018 to February 28 2019 was R16.25 an hour.
810,000
The number of people employed in commercial agriculture in SA
SA's commercial agriculture industry currently employs 810,000 people, which increased marginally in the fourth quarter of 2020 compared to the previous quarter, according to the Quarterly Labour Force Survey. Agri-producers are adamant they have no option but to cut staff even though the consequences will be dire.
Last month Agri SA presented results of a survey it had conducted among 546 farmers, of whom 456 indicated that they would have to retrench staff. This would lead to a total of 4,384 jobs lost - almost 10 jobs a farm.
The desktop study was across the horticulture, crop, animal production and mixed farming sectors.
Christo van der Rheede, executive director at Agri SA, said this week that though there may have been bumper crops for citrus, deciduous fruit, macadamia nuts and table grapes, not all farmers had been this fortunate.
Van der Rheede said there were still parts of SA, namely parts of the Western, Northern and Eastern Cape, that were experiencing drought.
Wool and cotton farmers had battled to export during the level 5 and 4 lockdowns last year - restrictions that also caused serious damage to the wine and tobacco industries.
He said that the increase in the minimum wage would place an additional strain on the agricultural sector, which was recovering from an extended drought and rising input costs. These include increases in Eskom tariffs and fuel prices, which with a proposed increase in water tariffs and a stronger rand are all diminishing farmers' income.
These factors have also placed strain on SA's food security, Van der Rheede said, a trend he expects to continue as farmers are forced to reduce or change crops that are labour-intensive to plant and harvest, such as vegetables.
This week the global food security index showed SA's ranking to be 69 out of 111 countries. In 2019 it ranked 44 out of 111, the collaborative index between the Economist and agricultural company Corteva said.
Wage rise must be
— Lelona Mxesibe, Researcher, Studies in Poverty and Inequality Institute
balanced with ability
to absorb a doubledigit
hike ...
Van der Rheede said SA's food security is being threatened not by limited production but by a rising number of unemployed consumers who are unable to afford food.
Civil society agrees that the wage rise is a double-edged sword.
Lelona Mxesibe, researcher and budget analyst at the Studies in Poverty and Inequality Institute, said the idea behind increasing the minimum wage for farm workers was welcome but had to be balanced with the sector's ability to absorb a double-digit hike.
She said that in the long term this meant there would no longer be large-scale employment for farm workers and this spelt trouble for many families.
"We will inevitably see an increase in the number of households living below the poverty line," she said.
Van der Rheede said farm workers were "more valuable than gold" and that the effect of more unemployed labourers would increase poverty.
While farmers face rising costs, so do workers.
The Pietermaritzburg Economic Justice & Dignity Group's survey on food prices from September 2020 to November 2020 found that the cost of a household food basket had risen from R2,065.71 to R2,167.41, excluding the cost of hygiene and cleaning products.
Farmers can apply for an exemption to paying the minimum wage.
Lebogang Sethusha, labour centre of excellence head at Agri SA, said this could only be granted if the employer could not afford to pay the minimum wage and trade unions representing the affected workers had been consulted or, if there was no union, the workers had been consulted.
She said the department of labour's test for affordability looks at the profitability, liquidity and solvency of the business. An employer must submit comprehensive financial statements for three years, including predictions for the current year.
The department is required to grant or reject the exemption within 30 days.
Gerrit Willemse, organiser in the Boland area for agriculture in the Western Cape for the South African Clothing and Textile Workers Association (Sactwu), said though he was aware that farmers were saying they would need to retrench staff, none of the employers at the 11 farms at which Sactwu represents workers had responded negatively to the increase in the minimum wage.
Sactwu has only recently started working in the agriculture sector and represents about 650 workers on grape, apple, citrus and pear farms in the Western Cape.
