Picture: THINKSTOCK
Picture: THINKSTOCK

SO FAR, only Western Cape farmers have been forced to face up to the reality of paying far higher wages in the near future.

With the imminent announcement by Labour Minister Mildred Oliphant of a new minimum wage to apply from March, that reality will soon be something all farmers need to consider. The reaction can be expected to be explosive.

A new paper by researcher Ben Stanwix, of the University of Cape Town’s development policy research unit, shows that agricultural wages in the Western Cape are typically higher than anywhere else in the country and are on average well above the minimum.

Using labour force survey data from Statistics South Africa, Mr Stanwix shows that between 2000 and 2007 farm workers in the Western Cape and Gauteng received the highest wages of all farm workers in South Africa, at levels that were close to or above the rural minimum wage.

But farm workers in North West, Limpopo, Mpumalanga and the Free State were the most poorly paid, with the average employee getting less than the minimum wage between 2003 and 2007.

So what can the country’s farmers be expected to do?

One possible response is non-compliance. Mr Stanwix’s paper shows that although wages have been increasing over time and more farmers are falling into line, compliance with minimum wage legislation has been weak.

This is because, he says, the chances of being visited by a labour inspector are small and the fines – based on a percentage of the underpayment — are insignificant.

This might change in the near future. In the Western Cape, for instance, where trade unions have begun to gain a foothold on the farms since the strikes, the Department of Labour has been somewhat invigorated and, thanks to union networks, is better informed about where to go and when.

Given the political heat that has been generated, noncompliance will become a riskier affair and unions, political parties and the government can all be expected to play a bigger part.

A second obvious response will be to shed labour.

Following the introduction of the minimum wage in 2003, it is estimated that aggregate employment on farms fell about 13%, Mr Stanwix says.

Commodities such as beef and maize, which are both highly mechanised, will be less affected by a sudden escalation in wages than vegetables and fruit, which are dependent on human labour.

Agri SA president Johannes Moller says particular difficulties can be expected in the vegetable sector in Limpopo, which is both labour-intensive and steeped in a low-wage business model.

He predicts that these commodities are likely to migrate over the border to Mozambique, where some Limpopo farmers already have cross-border operations.

The Bureau for Food and Agricultural Policy, a collaboration between researchers at the universities of Stellenbosch and Pretoria, states frankly that the new wage structure for agriculture will be the catalyst for the "structural adjustment" that the sector must inevitably experience.

The bureau’s paper, research conducted at the request of the Employment Conditions Commission, says: "South Africa’s agricultural sector has long been dependent on cheap and unskilled labour.

"However, it is becoming clear that this system will not survive into the future, which will be characterised by fewer, more skilled and better paid workers. The transition between these two production systems is already in motion."

But the outlook for employment in agriculture is not all bleak, says the bureau. It strongly endorses the vision contained in the National Development Plan that if South Africa picked "the winning industries" and expanded the exploitation of its natural resources, there is the potential to create 1-million jobs.

Mechanisation is an inevitable and long-term trend, it suggests. Rather than viewing this as negative and "a threat against manual labour, it should rather be thought of as an opportunity ", in which productivity will increase, the agro-economic sector will be stimulated and "a favourable economic and political environment" will develop, the report says.

Whether a threat, an opportunity or both, what is clear is that agriculture is facing a period of accelerated change.