Minimum wage, after-effects
Proposed national minimum wage in the agriculture sector can have serious consequences on sustainability and profitability for farmers.
It is generally anticipated that the proposed national minimum wage will come into effect on 1 May 2018. Indications are that the agricultural sector would be required to pay at least 90% for the first year after implementation to facilitate a gradual transition from the sectoral determination to the new dispensation.
By 1 May 2019 the full national minimum wage should be in effect. This implies that farmers should calculate the increased financial impact on sustainability and profitability because the serious consequences thereof might require timely alternative adjustments.
“The continued interference of government in the options available to entrepreneurs of how production factors should be managed to result in profit, is a cause for concern,” says Mr Louis Meintjes, President of TLU SA.
According to Meintjes, the government should be creating a climate which will entice investors and entrepreneurs to do business with confidence to ensure a flourishing economy. Currently all the production factors, namely entrepreneurship, capital, raw material and labour are subjected to question marks and uncertainty rather than creating stability. The uncertain policy environment, including the possibility of state capture, results in poor economic growth. In this regard, loss of job opportunities and increased rural poverty could escalate.
redaksie.bosvelder@nmgroup.co.za
