Bó-inflasie verhoging in die nasionale minimumloon is onvolhoubaar vir sukkelende landboubedryf | Above-inflation increase in the National Minimum Wage is unsustainable for an embattled agricultural sector

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21 November 2022

Agri SA het ‘n beroep gedoen op die regering om enige verhoging in die nasionale minimumloon te beperk tot ‘n inflasie-verwante vlak. Die sektor het geweldige terugslae die afgelope paar jaar beleef wat die -voortbestaan van menige boerderye bedreig. Agri SA erken die kostedruk op alle verbruikers in Suid-Afrika. Terwyl ‘n verhoging noodsaaklik is, moet dit egter volhoubaar vir die land se landboubedrywighede wees met die oog op voedselsekerheid vir verbruikers.

Agri SA het ‘n verhoging gelykstaande aan die verbruikerprysinflasie (VPI) minus 2% voorgestel. Dit verteenwoordig ‘n substansiële verhoging terwyl dit ook die uiters moeilike ekonomiese konteks waarin die sektor homself bevind in ag neem.

Die landbousektor het tans ongeveer 874 000 werkers in diens. Die sektor het werksgeleenthede tot bo pre-pandemiese vlakke gegroei. Hierdie syfers is ‘n aanduiding van die kritieke rol wat die landbou speel om werksgeleenthede in Suid-Afrika te skep, ‘n vermoë wat onder druk sal kom indien verhogings in die nasionale minimumloon voortgaan ongeag die ekonomiese realiteite.

Volgens die data wat verkry is vanaf die Bureau for Food and Agricultural Policy (BFAP) het die gemiddelde jaarlikse inflasie ten opsigte van plaasarbeid met 11,6% gestyg sedert 2012, terwyl algemene VPI ongeveer 5% in dieselfde tydperk was. Tot nou toe het die sektor daarin geslaag om hierdie toenames te absorbeer, hoofsaaklik danksy die goeie tye wat arbeidsintensiewe tuinboubedrywe in die pre-pandemiese jare geniet het. Hierdie bedrywe ervaar egter tans ook aansienlike druk met BFAP wat prysafnames oor die volgende dekade voorspel.

Die tendens van bó-inflasie verhogings in die nasionale minimumloon hou kort- sowel as langtermyn gevolge in vir die sektor se toekomstige ekonomiese bydrae tot die Suid-Afrikaanse bruto binnelandse produk (BBP).

In die kort-termyn sal ‘n bó-inflasie verhoging binne ‘n reeds moeilike ekonomiese klimaat die finansiële lewensvatbaarheid van menige boerderye bedreig. Boere ervaar alreeds stygende insetkostes, soos dié van brandstof en kunsmis, asook verswakking in die lewering van noodsaaklike dienste soos vervoer, logistiek en elektrisiteit. Boere in sekere dele van die land herstel ook nog finansieel van die stortreëns vroeër vanjaar en staar potensieel ongekende sprinkaanuitbrake in die gesig. Onder hierdie omstandighede kan boere nie ‘n bó-inflasie verhoging in die nasionale minimumloon bekostig nie.

In die langtermyn sal vinnig-stygende arbeidskostes wat nie gepaardgaan met ‘n verhoging in produktiwiteit nie, Suid-Afrika se globale mededingendheid bedreig. Tans ervaar talle plaaslike markte die bedreiging van goedkoop invoere. Terselfdertyd, staar ons uitvoerders toenemende globale mededinging van meer produktiewe lande met goedkoper arbeid in die gesig, byvoorbeeld Chili en Peru, twee opkomende Suid-Amerikaanse vrugteproduserende lande. Suid-Afrika se vermoë om globaal mee te ding en sy uitvoermarkaandeel te vergroot, en om weereens die landbousektor se bydrae tot die BBP te verhoog, sal grootliks afhang van hoe goed ons ‘n balans kan tref tussen lone, produktiwiteit en die vermoë om genoeg gesonde voedsel vir die plaaslike mark te produseer teen bekostigbare pryse.

Gegewe die inflasionêre druk op die landbousektor asook die voortgesette bó-inflasie loonverhogings, het Agri SA ‘n verhoging gelykstaande aan die VPI minus 2% voorgestel.

Agri SA sal voortgaan om met die regering oor hierdie aangeleentheid te skakel om te verseker dat die aankondiging wat gemaak word teenwoordigend is van ‘n volhoubare verhoging wat werkers se lewens sal verbeter maar ook voedselsekerheid in Suid-Afrika sal handhaaf deur ‘n volhoubare, groeiende sektor vir huidige en toekomstige geslagte te verseker.

Navrae

Johan Wege

Voorsitter van Agri SA se Sentrum van Uitnemendheid: Arbeid

Christo van der Rheede

Agri SA, Uitvoerende Direkteur

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 21 November 2022

Agri SA has called on government to limit any increase in the National Minimum Wage to an inflation-related increase. The sector has faced significant headwinds in recent years which threaten the viability of many farms. Agri SA also recognises the cost pressures on all consumers in South Africa. and therefore, while the need for an increase is clear, it needs to be sustainable for country’s farming operations to ensure food security for consumers.

Agri SA has proposed an increase in the national minimum wage of consumer price inflation (CPI) minus 2%. This represents a substantial increase while also accounting for the especially difficult economic context in which the sector finds itself.

The agricultural sector currently employs around 874 000 workers. The sector has grown employment to above pre-pandemic. These figures clearly indicate the critical role of agriculture in creating employment opportunities in South Africa, but this capacity will come under pressure if the increases in the national minimum wage continue to be untethered from economic reality.

According to data from the Bureau for Food and Agricultural Policy (BFAP), the average annual inflation on farm labour has risen by 11,6% since 2012, while the general CPI was around 5% over the same period. Until now, the sector has been able to absorb these increases largely due to the boom experienced by labour-intensive horticultural industries in the pre-pandemic years. But these industries now face significant pressures too, with BFAP projecting price decreases over the next decade.

The trend of above-inflation increases in the national minimum wage has short- and long-term ramifications for the future economic contribution of the sector to South Africa’s gross domestic product (GDP).

In the short-term, an above-inflation increase in the national minimum wage in an already difficult economic climate would threaten the financial viability of many agricultural operations. Farmers already face rising input costs like fuel and fertiliser, and declining delivery of critical services like transport, logistics, and electricity. Farmers in parts of the country are also still recovering financially from torrential rainfall earlier this year and now face another potentially record-breaking locust outbreak. Under these circumstances, farmers cannot withstand an above-inflation increase in the national minimum wage.

In the long-term, a rapid rise in labour costs that is not accompanied by a rise in productivity will threaten South Africa’s global competitiveness. As it stands, many of our local markets are threatened by the dumping of cheap products. At the same time, our exporters face growing global competition from more productive countries with cheaper labour such as Chile and Peru, two rising South American fruit-producing countries. South Africa’s ability to compete globally, grow its export market share, and once again increase the agricultural sector’s contribution to GDP will depend in large measure on how well we strike the balance between wages, productivity and the ability to produce enough healthy food for local markets at affordable prices.

Given the inflationary pressures on the agricultural sector as well as the prolonged period of above-inflation wage increases in the sector, Agri SA has proposed an increase in the national minimum wage of CPI minus 2%.

Agri SA will continue to engage government on this issue to ensure that the pronouncement that is made represents a sustainable increase that improves workers’ lives and also protects the food security of South Africa by maintaining a sustainable, growing agricultural sector for current and future generations.

Enquiries

Johan Wege

Chair of Agri SA’s Centre of Excellence: Labour

Christo van der Rheede

Agri SA, Executive Director