Farm worker lay-offs the tip of the iceberg

2013-02-10 10:01

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Analysts fear the sector will undergo a wave of job losses that could reach 200?000 as the wage bill almost doubles in the long run

The more than 2?000 farm workers given retrenchment notices in the wake of the agricultural sector minimum wage hike could be the tip of the iceberg.

Analysts expect hundreds of thousands of job losses over the next five years.

Following widespread violent protests in the Western Cape late last year and early last month for a minimum wage of R150 a day – up from R69 per day – which left three people dead, Labour Minister Mildred Oliphant’s announcement of a new minimum wage of R105 per nine-hour work day from March 1 has sparked fears the sector could shed up to half its workforce.

Agriculture SA says the 2?000 farm workers in Limpopo who received notice following the announcement this week were an indication of what is to come.

According to calculations by the SA Institute of Race Relations, the agricultural sector has already shed 331?000 jobs over the past 12 years, from 969 000 in 2?000 to 638?000 in 2012.

SA Institute of Race Relations deputy chief executive Frans Cronje believes a further 20% to 30% of people would lose their jobs by year-end in a sector spurred towards mechanisation as a result of violent protests and the R105 per day minimum wage.

“The latest sectoral determination has just accelerated a long-term trend,” he said.

“The 2?000 job losses reported this week are just the beginning of a figure to grow to 100 000, perhaps 200 000, over the long term.”

Cronje’s estimates are echoed by Agri Western Cape CEO Karl Opperman and DA shadow minister of finance Tim Harris, with Opperman saying if solutions could not be found, up to 50% of the agricultural workforce could be out of work in five years’ time.

Yet R105 per day is not a liveable wage. A study by the Bureau for Food and Agricultural Policy, commissioned during the recent negotiations to assist in the minimum wage determination, notes that even if workers were to get the R150 per day they were demanding, it would be barely enough for them to afford sufficiently diverse and nutritious food, and then only if both parents in a two-child household were working. Without any other income, they would still have to supplement their nutritional intake with additional staple food portions.

But the “dilemma” was that many of the “typical farms” surveyed would be unable to meet their operational costs should the minimum wage be hiked to R104 – R1 less than the labour department’s stipulation this week.

“The potential conflict between what we have termed the dilemma of the farmer and the dilemma of the worker can be highly disruptive, as has been witnessed in these past weeks, and will have to be managed with circumspection.”

The report also predicts an increase in food prices as a result of increased labour costs, putting an additional burden on food security.

However, Cosatu Western Cape provincial secretary Tony Ehrenreich said while the 50% minimum wage increase was welcomed, it was not enough.

Ehrenreich was unapologetic over job losses, saying farmers who could not afford the minimum wage could apply to the labour department for exemption, as provided in the legislation.

He maintained his call this week for land to be expropriated from farmers who “do not work towards a better South Africa” and for such land to be given to workers in order for them to continue farming operations.

This has unsurprisingly raised the hackles of farming unions, but Ehrenreich’s call for protest action against “profiteering” food retailers paying farmers “a pittance” for produce has some merit, says Institute for Poverty, Land and Agrarian Studies director Andries du Toit.

Du Toit said neither the farm workers nor the farmers were to blame for the current dilemma.

“The core of the problem is in the power relations between retailers and farmers.”

The retailers buying our export produce put “huge pressure” on farmers and externalised their risk, with the result that for every British pound, 20 pence went to the producer and 40 pence to the retailer.

“The British consumers are benefiting from poverty in South Africa,” he said.

While the South African supermarkets were also part of the problem, they had a vested interest in social cohesion in South Africa and there was a lot of goodwill in the higher echelons of Spar, Woolworths and Pick n Pay, he said.

Meanwhile, Harris has called on the minister of finance to save jobs in the sector by implementing the youth wage subsidy – currently blocked by Cosatu’s opposition.

However, Cronje holds that subsidies of any sort are only a short-term solution while longer-term solutions addressing the issue of skills and productivity are put in place.

A youth wage subsidy would simply deplete a fiscus already under pressure as it would be paying more in subsidies than the employed youth are contributing, argued Cronje.

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