Labour Minister Mildred Oliphant’s announcement on Monday that she had accepted the Employment Conditions Commission’s recommendation of a new sectoral minimum wage for farmworkers has been greeted with mixed responses. At R105 per day, the amount is way less than farmworkers wanted, but still way more than farmers expected. Farmworkers and their unions expressed qualified satisfaction at the wage jump, but farmers say it will inevitably spell job losses.
“We are happy, farmers are happy, unions are happy!” announced De Doorns farmworker Jurie Scheepers, when contacted by the Daily Maverick on Monday evening. The news that the farmworkers’ minimum wage would rise by R36 per day – a jump of more than 50% – appeared to have spread swiftly through the De Doorns community, following Monday’s briefing from Minister Oliphant.
“Well, not happy as in happy,” Scheepers qualified. “We hoped for R120 a day. But it’s more than R100.”
This perspective was echoed by Annie Lottering, a De Doorns worker interviewed by eNCA. “We actually feel that we should have received R110,” Lottering said through an interpreter. “But R105 is all right.”
Scheepers said most De Doorns farmworkers were back on the job, and things were peaceful. “We have had some disciplinary cases against workers who went on strike, but more like warnings than dismissals,” he said. “It’s okay here. There will be no more strike action.”
Scheepers was partially correct about the positive union reception of the offer – both the Food and Allied Workers Union (Fawu) and Cosatu appeared in upbeat mood in response to the news. Fawu called Oliphant’s announcement “courageous” – perhaps somewhat exaggerated praise, given the minister’s notoriously low profile during the dispute – and described a wage increase of more than 50% as “unprecedented”. However, the union felt it was “the least that could have been expected” given that the previous minimum daily wage (R69 per day) was “enough to buy only four loaves of bread a day”.
Speaking to reporters in Cape Town after Oliphant’s briefing, Cosatu’s Tony Ehrenreich said a daily wage of R105 would “go a long way towards showing workers that they have made strides”. However, Ehrenreich cautioned that this was only the start of a “long journey”, and warned farmers who might contemplate a labour scale-back to offset a greater wage burden that they would not receive a sympathetic hearing. “If they can’t use it [the land], they must lose it,” Ehrenreich said. “They must go somewhere else. Bad farmers will lose their land.”
The most militant wing of the striking unions – the Bawsi Agricultural Workers Union of SA (Bawusa) – was less enthusiastic about the wage raise. The Daily Maverick asked general secretary Nosey Pieterse whether he was happy with the amount of R105. “No, obviously we’re very disappointed,” Pieterse said. He admitted that he didn’t know whether farmworkers felt the same way. “I cannot say that right now. Workers were prepared to make huge sacrifices, and to have done so for R105 is too little.”
Would Pieterse be calling for further strike action, then? “I don’t call for strike action,” Pieterse said flatly. “I lead strike action when it is decided on by workers.”
Pieterse sounded tired and low. Other than his disappointment about the new minimum wage, perhaps he was dwelling on a Carte Blanche investigation into him which aired on Sunday night. The show featured a De Doorns worker called Monica Snyers, who claimed Pieterse had publicly called for non-striking workers to be attacked, following which pronouncement Snyers was driven out of her home. Pieterse dismisses the show as just the latest in the media’s attempt to “demonise” him.
Part of Pieterse’s dissatisfaction with the new wage is due to his suspicion that the Employment Conditions Commission’s recommendations were influenced by what farmers wanted to pay. The figure of R105 was first bandied around in January as the so-called Clanwilliam Deal, hailed as a breakthrough by Cosatu when a Clanwilliam farmer negotiating on behalf of a few other farms agreed to pay his workers this amount. “Of course they may have worked the number out in a scientific way,” said Pieterse. “But I think the Labour Ministry was influenced by the farmers.”
If so, this doesn’t explain why a number of farmers’ unions have thus far expressed grave concern about the extent of the wage increase. Agri WesKaap head Carl Opperman told the Daily Maverick the 52% raise would see the annual labour bill for farmers rise from R13 billion to R20 billion. “This is a massive increase, and South African agriculture will suffer in absorbing these costs,” he said. Agri WesKaap had supported a new minimum wage of between R80 and R85.
Opperman said that the agricultural sector is already jittery about the effects of Eskom’s proposed 16% tariff hike – “farmers use electricity for everything” – and the ongoing uncertainty about land reform. “Farmers may get to a situation where it’s just not profitable to farm any more,” Opperman said. He predicted this year’s harvests would likely go ahead as normal, in terms of labour, but next year farmers would start scaling back.
When pressed for an estimate of job losses to the Western Cape farming industry, Opperman said: “Perhaps 30%”. In January, Agri Wes-Kaap president Cornie Swart told the Daily Maverick that even a raise to just R85 per day would cause about 200,000 job losses in the Western Cape.
Opperman said because R105 would be the “minimum floor level” wage for workers, all salaries would need to be adjusted upwards. “Everything will move up in cost, not just the entry-level wage bill,” Opperman said. “That will have one massive detrimental effect. The realities of agricultural economics are going to force us to have a look at how we do production.”
A Porterville-based farmer, who spoke to the Daily Maverick on condition of anonymity, expressed similar concerns. “My response will be to calculate the financial implications and convene a meeting with all my workers to discuss the situation and lay down a couple of scenarios. I expect them to help me work through these and come up with plans,” he said.
“They will have to help me select those that will, unfortunately, have to be retrenched: a
larger number of lower wage earners vs. a smaller number of higher wage earners. Off the top of my head I'll probably have to retrench at least 5-10 people – 10-20% of my labour force – depending on the willingness of the higher wage earners to accept only small increases in order to keep others, generally family members, employed.”
The farmer said he feared the minimum wage raise would have extremely negative knock-on effects. “My opinion is that it’s a good day for those that will retain employment and a very, very sad day for those that will be joining the ranks of the seasonal workers or unemployed,” he said. “I don't know where they will now find accommodation, because they can’t stay on the farm if I retrench them. I think this is going to have dramatic implications for unemployment throughout the country, and it may spark off large scale unrest simply because of massive layoffs. If agriculture has to let unskilled people go, which other sector of the economy is going to step in to employ them?”
The question is particularly trenchant given Beeld’s report on Sunday that the prescribed minimum wage for workers in the government’s extended public works programme is just R66,34 a day. The newspaper also reported that some provincial departments pay workers in the programme only R30 a day.
Freedom Front Plus leader Pieter Mulder proposed on Monday that potential job losses in the agricultural sector be prevented through the establishment of a subsidy. “A possible solution for this agriculture dilemma is to investigate a government wage subsidy for farmers who create jobs,” Mulder says. “If a youth wage subsidy is possible, such a wage subsidy would help curb job losses in rural areas.”
Meanwhile, Oliphant stressed that farmers who cannot afford the wage raise can apply for an exemption, as long as they provide proof in the form of financial statements. At the briefing it was acknowledged that the 52% rise was significant (occasioning “great debate” among the Employment Conditions Commission, and at least one dissenting party) but it was hoped that this year’s jump would negate the need for “additional great jumps” in 2014 and 2015. As it stands, the idea is that for the following two years, farmers will pay the R105 minimum wage in addition to CPI (the Consumer Price Index, currently at 5,7% from December) plus a 1.5% annual increase.
The Employment Conditions Commission reportedly arrived at the R105 figure by considering evidence from public hearings and CCMA negotiations in conjunction with the findings of the Bureau for Food and Agricultural Policy early last month. The report, disseminated widely, had two main depressing findings: firstly, that even if workers received their hoped-for R150 a day, that wouldn’t be enough to ensure a nutritionally-adequate diet; and secondly, that the ceiling for affordable wage increases from farmers’ perspectives was about R104. If wages rose above this point, the bureau found, “many of the typical farms will be unable to cover their operating expenses, and hence not be able to pay back borrowings or to afford entrepreneurs remuneration.”
The Employment Conditions Commission’s recommendation of a 52% wage jump is certainly very different from its last such report, compiled in 2011. This previous document endorsed an increase of 9,3%. The report noted that though farmworkers surveyed wanted their wages to rise by much more, this would be a “futile exercise” if it resulted in workers being “retrenched due to unaffordability”.
That is precisely the situation which some farmers claim they will face shortly. Talk of greater mechanisation within South African agriculture may to some extent be bluster: after all, there are certain crops and procedures for which you still need human hands. But the effects of the additional wage burden, particularly on currently marginal farms, are likely to mean that less wealthy farmers are indeed faced with some tough choices. We also don’t yet know what further knock-on consequences might result for the rest of us – such as a rise in food costs.
On paper, a wage jump of 52% rings out like a stunning victory for farmworkers. But as usual in a South African context, there is more to consider here. The first is the pitiful base from which the wage is rising. The second is the long-term effects of the raise. If, as farmers claim, it will lead to a much smaller pool of more highly paid workers – that sounds like it might be a recipe for a long term disaster in the already wildly unequal society.
Written by: Rebecca Davis
Picture credit: Daily Maverick online
- Rebecca Davis studied at Rhodes University and Oxford University. This article was published on Daily maverick online.