FARMERS will have to close shop if they were to pass on the cost of the wage increases demanded by labourers to consumers.
This was the view of Absa's head of AgriBusiness Brienne van der Walt when he delivered a paper on the agricultural outlook for next year, in Johannesburg.
His comments came while wage negotiations were under way in about 15 towns across Western Cape, which had been subjected to violent strike action just more than two weeks ago.
Workers are demanding that their daily wages be raised to R150. They also protested against their living conditions.
The farmworkers returned to work this week pending the outcome of a revision of the national minimum wage, expected to be presented in the first week of next month.
Van der Walt said wages currently made up about 30% on average of a farmer's budget.
And if farm labourers' wages are raised to R150 a day it would result in the wage costs rising to 50% of a farmer's budget.
"Farmers do not determine the prices of grapes and wines. The prices are mainly determined by the international commodity pricing. If farmworkers secure the pay rise it will render South Africa an expensive producer of grapes and wines compared with other countries," he said.
"This could eventually mean that it will be cheaper for the international market to import wine and grapes from other countries like Brazil, for instance."
Van der Walt described the labour unrest in Western Cape as the most challenging in the history of farming. He said if the unrest was not resolved swiftly, international investors would regard it as anarchy.
High wage demands will force farmers to close shop
FARMERS will have to close shop if they were to pass on the cost of the wage increases demanded by labourers to consumers.
This was the view of Absa's head of AgriBusiness Brienne van der Walt when he delivered a paper on the agricultural outlook for next year, in Johannesburg.
His comments came while wage negotiations were under way in about 15 towns across Western Cape, which had been subjected to violent strike action just more than two weeks ago.
Workers are demanding that their daily wages be raised to R150. They also protested against their living conditions.
The farmworkers returned to work this week pending the outcome of a revision of the national minimum wage, expected to be presented in the first week of next month.
Van der Walt said wages currently made up about 30% on average of a farmer's budget.
And if farm labourers' wages are raised to R150 a day it would result in the wage costs rising to 50% of a farmer's budget.
"Farmers do not determine the prices of grapes and wines. The prices are mainly determined by the international commodity pricing. If farmworkers secure the pay rise it will render South Africa an expensive producer of grapes and wines compared with other countries," he said.
"This could eventually mean that it will be cheaper for the international market to import wine and grapes from other countries like Brazil, for instance."
Van der Walt described the labour unrest in Western Cape as the most challenging in the history of farming. He said if the unrest was not resolved swiftly, international investors would regard it as anarchy.
Would you like to comment on this article?
Register (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Trending
Latest Videos