Western Cape - Farmers who threaten that the new minimum wage in the sector will lead to job losses will lose their land, Cosatu said on Monday.
The trade union federation was responding to warnings from Agri-SA and Agri Western Cape that the increased minimum wage for farmworkers would lead to “restructuring”, including mechanisation of labour and decreased demand for unskilled labour.
Western Cape Cosatu secretary Tony Ehrenreich said: “The farmers who make these threats must keep on making these threats. The restructuring will happen and part of that restructuring will lead to them losing their land.
“If they can’t use it then they must lose it. They must go somewhere else. But this is a country now that understands that workers are an essential input, that their interests and their best futures must also be taken into account.”
He said the time for “old baasskap attitudes” was over.
Ehrenreich was speaking after the announcement on Monday of a new minimum wage for farmworkers of R105 a day.
Agri Western Cape CEO, Carl Opperman, said the increasing labour costs would lead farmers to shed surplus labour. “We will have much more high-productive labour, much more skilled labour. So, we will not accommodate a lot of the unskilled labour on the farm anymore, and that will be moved back to the government and we will see how they can handle it,” he said.
Labour Minister Mildred Oliphant announced the R36 increase on the current minimum of R69 a day on Monday, saying it would take effect from March 1, followed by increases of consumer price inflation, plus 1.5 percent, for the following two years.
But, as suggested in a specially commissioned study, this is likely to stretch some farmers’ finances to breaking point, while coming nowhere close to a living wage for their workers. The increase follows violent strikes last year in some parts of the Western Cape, when workers demanded a minimum of R150 a day.
But Oliphant quoted the Bureau for Food and Agricultural Policy (BFAP) economic analysis commissioned by parties to negotiations in the sector to explain the paradox faced by the Employment Conditions Commission in making a recommendation to her on a new minimum wage.
It found that “if the average wage increases to more than R104.98 per day, many farms will be unable to cover their operating expenses, and hence not be able to pay back borrowings or to afford entrepreneurs remuneration”.
It also found that “the real problem is that even at what seems to be an unaffordable minimum wage of R150 per day; most households cannot provide the nutrition that is needed to make them food secure”.
Oliphant appeared to acknowledge the possibility of job losses when she said farmers who ran into difficulties should use the government’s training layoff scheme, which provides skills to redundant workers. She also said farmers could apply for an exemption to the minimum wage “provided they submit proof” in the form of financial statements showing they couldn’t afford the regulated minimum.
But Professor Adriaan van der Walt, a member of the Employment Conditions Commission, said such exemptions had not “significantly been granted” in the past “because the principle of the minimum wage is really to bring… the minimum wage up to a level that is a little bit closer to a living wage”.
Freedom Front Plus leader Pieter Mulder said South Africans faced the “unfortunate” choice of a minimum wage or no work at all.
“It should be expected that South Africa’s agriculture will in the next couple of years undergo a total restructuring where farmers will be changing to less labour-intensive products or will mechanise in an effort to balance their books,” Mulder said.
“Where permanent workers will not be affected so much by the new wage determination, it will lead to the dismissal of tens of thousands of seasonal and temporary workers. The decision will also directly work against the government’s intention to create more jobs in rural areas. It will also very negatively affect emerging farmers.”
DA spokesman on labour, Sej Motau said the party hoped the new determination would put an end to the “disruptive farm strikes that have torn at the fabric of our rural heartland in the past few months”.
“We trust that (Oliphant) and the various parties, including Cosatu, have factored in the potential job losses,” Motau said.