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Prepare for the price of food to rocket following the 52-percent minimum-wage increase for farmworkers announced on Monday.
After negotiations with farmers, the Department of Labour and workers, Labour Minister Mildred Oliphant almost doubled the minimum wage from R69 to R105 a day, promulgated for a three-year period. During years two and three, wages would be increased by the consumer price index plus 1.5 percent.
However, she said, the wage did not amount to a “balanced daily food plate” for workers but her department and the Employment Conditions Commission were mindful of the findings of the Bureau for Food and Agriculture Policy report, which stated that the increase meant farmers “were unable to cover their operating costs or pay back borrowing”.
The announcement follows two months of uncertainty in the agriculture sector after violent strikes in November by seasonal workers in the Western Cape.
Consumer activist Ina Wilken said the increase would have a “huge impact” on ordinary people.
“Food prices are going to go through the roof.”
She added imminent fuel and electricity increases were already beyond what people could bear.
“The problem is, where is this all going to stop? The increase will compound into next year and each year thereafter,” she said.
KwaZulu-Natal Midlands egg producer Robin Barnsley said it would affect pork, poultry, vegetable, fruit and dairy producers the most, with retailers turning to cheap imports.
“Farmers will have to increase their prices and retailers will go overseas. Consumers must brace themselves for big trouble.”
While he agreed that farmworkers required a living wage, he said that the government had to protect local producers from cheaper imports and consider the introduction of a wage subsidy for farmers.
While Food and Allied Workers’ Union head Katishi Masemola welcomed the adjustment he was sympathetic to farmers who, he said, were exploited by retailers.
“Retailers are making a killing. When you see farmers getting less than 15 percent of the end price and retail margins at 65 percent, that is not fair. Farmers just don’t have the power to negotiate.”
He said the minimum wage announcement would put pressure on labour negotiations with retailers.
Spar’s Mike Prentice said the wage increase would have an inflationary effect that would show up in shelf prices within six months. Fresh produce would be the first to rise.
Kwanalu chief executive Sandy la Marque said farmworkers were celebrating yet cautious about job losses.
KZN’s biggest sugar cane farmer, Charl Senekal, who employs nearly 2 000 workers, said his wage bill would go up by R4.5 million next month.
However, instead of retrenching, he said he would actively pressure the government. “The government must realise what our margins are and start protecting farmers, and looking to wage subsidies. Otherwise there is going to be chaos. The government knows our industry could lay off 100 000 workers,” he said.