Farmers take stock of wage hikes

Almost 1 000 farmers have applied to be excluded from the new minimum wage required for farmworkers, which kicked in on March 1, according to the department of labour.

Figures released by the department on Thursday revealed that 918 farmers had applied for an exemption, covering over 76 000 workers. The majority of applications came from Mpumalanga and the Western Cape.

The minimum wage has risen from R69 a day to R105 for a nine-hour day, or R2 274.82 a month.

“The department is focusing on capturing the data and responding to the applications,” department spokesperson Page Boikanyo told the Mail & Guardian earlier this week.

Most application were received after March 1 2013, which could delay the finalisation of the applications before the end of the month according to the department.

Meanwhile farmers are concerned that the department will not be able to cope with the flood of exemption applications.

Under the Basic Conditions of Employment Act, the minister of labour can replace or exclude any basic conditions in the law.

Farmers who wish to be excluded from paying the higher wages prescribed by the sectoral determination have to meet a number of conditions before they can qualify.

These include providing documentary proof of consent to the application by a registered trade union, or a sworn affidavit including the names and signatures of employees who are not registered with a trade union, according to Boikanyo. Farmers are also required to provide audited financial statements to prove they cannot afford to pay the new wages.

The Food and Allied Workers’ Union (Fawu) has called on the government to carry the costs of exemptions to ensure that workers do not receive less than the set minimum wage.

The farmers’ unions have encouraged their members to apply for the exemptions. Henk van de Graaf, assistant general manager of the Transvaal Agricultural Union, said his organisation had advised its members to apply. Although the union had yet to determine how many farmers had followed this advice, he estimated that 60% of them would.

The full impact of the new wages would only be felt some months down the line, Van de Graaf said, but some farmers had already begun to restructure their businesses in several ways, such as reducing the number of hours worked or look to mechanise.

The organisation believed that problems would begin to emerge at the end of March, when the first round of new payslips were received and farmers had an opportunity to take stock of the increases.

Sandy la Marque, the chief executive of the KwaZulu-Natal Agricultural Union said that many of the union’s members had applied for the exemption and, in consultation with their workers, had begun to restructure their enterprises to avoid retrenchments.

“[But] there are concerns about the department’s capacity to deal with the applications,” La Marque said.  These included the level of expertise of department officials, who would have to analyse financial statements submitted by farmers and calculate forward projections to quantify the impact the new determination would have on famers’ businesses, she said.

There had already been a number of incidents because of misconceptions about the introduction of the minimum wage, she added. The Government Gazette stated clearly that the sectoral determination was R105 a day for nine hours worked. But owing to poor communications by the department and misreporting in the media, the expectation had been created among workers that they would be paid R105 a day regardless of the hours worked, La Marque said.

The introduction of the new minimum wage had also elicited “a cry of desperation” from emerging farmers, particularly from medium-sized and small growers, she said. “A number of vegetable growers have indicated that they will have to look to grow something [else]. This could have an impact on food security, as well as cost, since prices will rise if certain products become scarce.”

Neither Fawu nor Cosatu in the Western Cape responded to phone calls requesting their comments. But it has been well documented that even with the increase in the minimum wage many farmworkers will still be unable to buy enough food to maintain a healthy diet.

The price of maize, which has been relatively stable in recent months, rose sharply last week because of concerns about drought in some areas of the country, such as the North West and the Free State, according to Christo Joubert of the National Agricultural Marketing Council.

The quarterly food price monitor released by the council this week showed that consumer price inflation for food and nonalcoholic beverages had dropped year on year from 10.3% in January 2012 to 6.2% in January 2013. But the cost of a monthly food basket, as a proportion of the average household income for the poorest 30% of the country, increased from 38% to 40.4% year on year. The cost for the richest 30% of the country rose from 3% to 3.2%.

The council warned that the local maize market was on a “knife’s edge” because the crop in the North West and Free State was “in critical need of rain”. The current crop estimates put the total at 12.3-million tonnes but the data was several weeks old and conditions in those provinces had “deteriorated rapidly”. “Experts argue that one million tonnes could be lost within the next two weeks if no rain falls,” the report said.

The local maize price has been trading at below the export parity price, which was R2 380 a tonne mid-week. With speculation that approximately 1.5-million tonnes has been booked for export, the maize market could become “highly volatile” in coming weeks. The maize price could increase by more than 20%, the report noted, which would lead to increases in maize meal prices of more than 10% in the second half of the year.

But if sufficient rain fell within the next few days, the price was likely to settle and “even tend to decline on the back of significantly lower world prices that will be driven by a much larger anticipated maize harvest in the United States towards the end of the year,” the report said.

Lynley Donnelly
Lynley Donnelly
Lynley is a senior business reporter at the Mail & Guardian. But she has covered everything from social justice to general news to parliament - with the occasional segue into fashion and arts. She keeps coming to work because she loves stories, especially the kind that help people make sense of their world.
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