AT LEAST 2,000 farm workers were issued with retrenchment notices on Wednesday as the agricultural sector shed jobs ahead of the implementation of a new minimum wage, and as mechanisation on farms gathers pace.

Agriculture has shed hundreds of thousands of jobs since minimum wages were first implemented in 2000. Analysts warn that thousands more will be lost when the new wage — increased by 50% by Labour Minister Mildred Oliphant — comes into effect on March 1.

Industry insiders warned on Wednesday that mechanisation on farms had begun some time ago and was picking up pace.

Farmers in Limpopo and Mpumalanga and milk producers were said to have started serving workers with retrenchment notices, but Western Cape farms were quiet with no reported threats of dismissal.

The reaction of farmers to the new wage has been most marked in Limpopo, where Agri South Africa said 730 workers had been given notice in George’s Valley and Magoebaskloof. Farmers in Mpumalanga have said they would follow the Magoebaskloof example and cut back on labour.

The move to mechanise has lit a fire under farm implement sales. Last year was "exceptional", said Agricultural Machinery Association secretary Jim Rankin.

"We sold nearly 8,000 units," Mr Rankin said. About 60% of those machines were tractors.

He said, however, that the mechanisation of South Africa’s farms was "a process, not an event".

Over the past three years, the farm machinery industry had outperformed each year by 50%, he said. In 2003, there were 3,200 units of agricultural machinery sold in South Africa, and by last year nearly 7,800 units were sold.

Mr Rankin said this was evidence of a "mechanisation impetus" in agriculture, despite the fact that "the area under cultivation in South Africa has, in fact, reduced".

He expected farmers to look more closely at mechanisation "in the light of the last six months" — during which workers went on strike and unions demanded big wage rises — but said the process "started a long time ago".

Johan van der Merwe, MD of Northmec, a leading tractor and machine distributor, agreed on Wednesday that business was very good. "We’re expecting a very good year," he said.

Callie Human, the head of sales and marketing at agricultural equipment distributor Argo Industrial, described the market in the past six months as "quite lively", but he pointed out that some sales could be attributed to "good commodity prices on the grain side".

Farmers were abandoning labour-intensive sectors to focus on those that were easily mechanised, Transvaal Agricultural Union of South Africa chairman Louis Meintjes warned on Wednesday.

He described the past few months as a "tragedy", but asked: "What can farmers do? We started to mechanise some time ago, to get rid of labour, or to move to another sector."

Mr Meintjes warned that farmers were being squeezed "from all directions", citing the cost of electricity, the price of diesel, taxes and the cost of labour.

As a result of new minimum wages for farm workers being set at R105 a day, farmers in Limpopo and Mpumalanga had issued notices of retrenchment to their workers "in order to survive".

"Our information is that at least 2,000 workers have received notices. It’s done on a financial basis for survival. The minister put us in this position," he said. The flight from labour-intensive agricultural practices had already severely affected the price of foodstuffs — such as vegetables — produced in a manner that cannot be mechanised, Econometrix chief economist Azar Jammine said.

"This will be inflationary. Fruit and vegetable prices have already risen more than other foodstuffs," he said on Wednesday.

Mr Jammine said there had been extensive shedding of jobs on farms since minimum wages were introduced in 2000.

According to the old labour survey methodology, the sector shed about 700,000 workers between 2000 and 2007 — from 1.84-million employees in 2000 to 1.16-million in 2007.

Mr Jammine said the decrease was attributable to the implementation of minimum wages, although "some might say that the broadening of the social grant net would have had an impact as well".

He warned the new minimum wages were a "classic knee-jerk blunder" that would act as a "counter to land reform".

This was because "only the big commercial farmers will survive, and emerging farmers will struggle", Mr Jammine said.

Congress of South African Trade Unions Western Cape secretary Tony Ehrenreich said on Wednesday several government incentives and schemes existed to help farmers retain their workers, but "some old farmers" wanted to carry on paying "slave wages".

No farmers had taken up the offer of a reprieve from the minimum wage, the Department of Labour said.

With Carol Paton