Minimum wage will destroy agricultural sector
15 March 2021
The Minister of Labour's ill-considered increase of the minimum wage, especially with regard to farm workers, will not lead to job creation nor address the problem of unemployment. In fact, the opposite will happen.
The question that the ANC government apparently does not understand is not whether farmers want to pay the minimum wage, but whether they are able to pay it.
Agriculture is the only sector in the economy that grew during the pandemic, mainly due to a higher production of livestock and horticultural products as well as crops.
It is, however, relative to the growth of the entire industry and it can, therefore, not be used as a measure for the affordability of an excessive minimum wage increase.
The ANC must also keep in mind that approximately half of the total number of farmers in the country have an annual turnover of less than one million rand. That leaves very little room for making a profit.
A single minister's income is double the income of half of the country's farmers combined. And ministers do not have twenty to thirty workers that they have to pay salaries, which must suddenly increase with 16%.
They do not have livestock losses, pests affected their crops, drought or a high input cost to generate their income. And farmers must pay taxes as well.
Under the burdensome rule of the ANC, South Africa has dropped to the 69th place on the international list for food security. The alarm bells are ringing and yet the ANC government keeps putting more burdens on the agricultural sector.
Farmers find themselves at a point where they have no choice but to increasingly mechanise their farming activities or to throw in the towel, especially small farmers who have a turnover of less than R300 000 annually.
These small farmers constitute the majority of the 50% of farmers who have a turnover less than one million rand per year. The image that the ANC has in its mind that all farmers are rich, is just an illusion.
The government must take note of the large-scale mechanising currently happening in Brazil's agricultural sector at the expense of manual labour. The norm there is already one of larger farms, greater production, bigger profits and, naturally, less workers.
South Africa's farmers are not all rich. Everyone cannot afford an increase of 16% for labour. The ANC's actions will break this sector and then this country might as well shut down completely. Without food at that.
With the rising costs of electricity, water and fuel, it is not possible to afford a sharp increase in labour costs as well. The immediate choice is to either declare bankruptcy or to retrench workers. The choice is obvious.
A government that cherishes its agricultural sector, cherishes its future. This choice should be an obvious one as well.
Issued by Tammy Breedt, FF Plus MP and chief spokesperson: Agriculture, 15 March 2021
