Whilst an increase to the minimum wage was largely necessary and unavoidable, and to be welcomed, the roughly 52% increase in one step and with one months’ notice, is a knee-jerk reaction that I fear is unsustainable in the agricultural sector in the long-term. I feel such an increase should rather have been phased in incrementally over the medium term, through increases from R69 to say R80 at the end of Feb 2013, followed by a further R15 after say a year and a further R10 after say 18 months. Thus, the ultimate wage increase objective would have been achieved, but in a sustainable way for the farmers, the farm-workers, the broader agricultural sector and in providing food security.
Phasing the increases in, in this kind of way would have allowed the farmers much needed time to make the surely necessary and significant adjustments to their business and management processes and projections to retain business viability whilst retaining as many permanent and casual farm-worker jobs as possible.
I fear that, in order for farms to remain competitive and viable, the Ministers decision as it stands now, will necessarily and at least force farmers to immediately pursue a range of drastic cost-saving measures including, inter alia, the phasing out (non-renewal) of farm-worker contracts when they expire, cutting the number of employment contracts in the medium term, increasing productivity expectations and forcing an immediate shift to mechanisation, etc. Even if these prove successful in terms of farm viability and food security, they will surely exacerbate and even worsen unemployment levels (which are already unacceptably and unsustainably high) in the affected farm-worker communities, in turn escalating employer/employee tensions within the agricultural sector.