BL Premium reports that Agri SA has warned that an above-inflation increase in the national minimum wage (NMW) in a difficult economic climate will threaten the financial viability of many farmers.

The agricultural industry body said further increases should be CPI (now about 7%) minus two percentage points to ensure operations remained viable. The organisation has previously warned that the rising cost of labour could see farmers speed up adoption of technology and mechanisation to cut costs. The agricultural sector contributes about 3% to GDP and provides nearly 900,000 jobs. Earlier this year, the Department of Employment & Labour published a further increase in the NMW, pushing it to R23.19 an hour, or a hike of nearly 7%. According to Bureau for Food and Agricultural Policy (BFAP) figures, the average annual inflation on farm labour rose 11.6% since 2012, while the general CPI was about 5%. “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,” Agri SA’s Johan Wege said in a statement on Tuesday. He warned that the trend of above-inflation pay rises in the NMW would affect the sector in the short and long term.

• Read the full original of the report in the above regard by Bekezela Phakathi at BusinessLive (subscriber access only)
• Lees ook, Beleërde landboubedryf vra vir beperkte loonverhoging, by Maroela Media

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