Agri Eastern Cape says new national minimum wage unsustainable

Another bullish crop season outlook despite a marginal hike in planting - FNB

The gazetting on Friday last week of an 8,5% increase on the national minimum wage demonstrates that the current realities of employment and economic difficulties faced by some sectors in agriculture have not been taken into consideration, says farmers’ organisation, Agri Eastern Cape.

While Agri Eastern Cape believes that remuneration, must be fair, reasonable, and commensurate with the job and skill level, it says there is no way that above inflation increases (as been seen over the last decade) in the national minimum wage will not have a significant impact on employment within the sector.

“We are further disappointed that the extensive comment and input that the sector made to the National Minimum Wage Commission appears to have been ignored by the majority of the commissioners. All of this happens against the backdrop of the current logistic problems, road- and harbour infrastructure issues and power supplies challenges,” the organization describes.

“The commercial agricultural sector currently deals with the worst in terms of electricity supply and poor infrastructure – notwithstanding the fact that huge amounts of money are spent on security.

“While the official unemployment rate approaches 40%, the real unemployment rate within many of our rural towns is probably closer to 65%. Commercial farmers have had to absorb huge increases in production input costs. Product prices have not moved accordingly for some of the sectors. The livestock industry is a case in point.”

Agri Eastern Cape says although mechanisation and optimalisation of resources is a worldwide trend, the increased cost of labour above inflation still needs to be factored in.

“Commercial agricultural enterprises are often the only workplace within the rural areas where unskilled job seekers can find work. Already, many extensive farming operations have simply stopped with labour intensive maintenance and land care activities such as alien and invasive vegetation control with dire consequences in years to come.”

Agri Eastern Cape disputes the figures presented in the latest quarterly labour survey by Stats SA.

“The agricultural sector agrees with the sentiments expressed by BFAP in its latest Agricultural Employment Brief,” it notes.

“The numbers presented in the survey do not align with reports on the ground. Of the suggested 83 000 jobs created, 58 000 were supposedly created within the livestock sector. The Eastern Cape supposedly added 23% to this number. The red meat and wool producer prices are significantly down over the last couple of years.

“Input and production cost increased dramatically. The official slaughtering statistics also do not align with the increase in jobs. Agriculture had seen above inflation increases over the last decade.

“If above inflation increases are going to be the norm, the sector will have no option but to explore and invest in labour saving methods to stay competitive – something South Africa can ill-afford.”

Agri Eastern Cape is calling upon Government to review the entire methodology and purpose of the National Minimum Wage in the light of our unemployment crisis.

“The recent increases are simply just not sustainable.”

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