The minimum wage for farm workers in South Africa had been lifted to R105 a day, effective March 1, with an increase in line with the consumer price index rate, plus 1.5%, from the second year of implementation.

The new minimum sectoral determination, tabled by Labour Minister Mildred Oliphant on Monday, would ensure that employees working nine hours a day would be entitled to wages of R11.66 an hour, R525 weekly or R2 274.82 a month.

This represented a 52% increase from R69 a day, which Nomura International emerging markets economist Peter Attard-Montalto pegged as a negative move.

He stated that the decision would push a large number of farmers into an “uncompetitive state” against import prices.

Further, Attard-Montalto said the decision, once again, revealed “the direct link between violent strike action and capitulation by government”.

The minimum wage was increased following often-violent, illegal industrial action in the agricultural sector late last year, as workers demanded an increase to R150 a day.

Oliphant urged business and labour to “come together to find ways of improving labour relations”.

However, agricultural union TAU South Africa president Louis Meintjes warned that the increase would lead to further disintegration in labour relations which would see farms and businesses buckling under the pressure of higher prices, mechanising their operations and reducing their labour forces “for the sake of survival”.

Small and emerging farmers, in particular, would not be able to afford the increased labour costs, the union stated.

Meintjes further said that the decision was the result of “undue pressure and intimidation by seasonal workers” and created a precedent for future actions in other sectors.

An Employment Conditions Commission report, compiled in conjunction with the Department of Labour (DoL) , found that the average wage base of farm workers was R84.90 a day. However, raising this to more than R104.98 a day would hamper a farm’s ability to afford operating expenses, borrowings or entrepreneurs’ remuneration.

The DoL said it would undertake a study to assess the impact of the higher wages in the sector as the new wage dispensation term ended after three years.