Gauteng Smallholder December/ January 2018 - Page 3

GAUTENG COMMENT, by Pete Bower MAGAZINE HOW TO MAKE YOUR PLOT PROFITABLE V18 No12/V19 No1 Dec 2017/Jan 2018 PUBLISHED BY Bowford Publications (Pty) Ltd Established 1985 (Reg No 2004/019727/07) PO Box 14648, Bredell 1623 Tel: 011 979-5088 or 076 176-7392 Fax: 086 602-3882 website: www.sasmallholder.co.za facebook.com/gautengsmallholder PUBLISHER & EDITOR Pete Bower email: gautengsmallholder@gmail.com RESEARCH EDITOR Vanessa Bower email: vanessa.bower@mweb.co.za GRAPHIC DESIGNER Mark Hageman email: graphics@gautengsmallholder.com ADVERTISEMENT SALES Pete Bower email: gautengsmallholder@gmail.com ADVERTISING RATES ( All Rates Full C o l ou r , incl VAT ) Full Page - R7 480 Half Page - R 4 620 Quarter P age - R2 570 1/8 page - R1 360 Smaller sizes: R 104 per col cm (Minimum size - 4 col cm) ( Black only: colour rate less 2 0% ) Booking discounts Payment lumpsum in advance. 3 insertions - less 10% 6 insertions - less 15% (other payment and discount options are available) Circulation More than 1 9 000 copies * distributed free through outlets in the Agricultural Smallholding settlements of Gauteng and adjoining provinces. * excluding on-line readers. 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Socialist claptrap I n the current political climate in South Africa it is not surprising that a governmental action generates a lot of heat, and very little light. For, the levels of ineptitude and kleptocracy are plain for all to see, from the thievery of the Zupta project to the ineptitude of the Life Esidimeni tragedy, to take but two of many examples. And so it is with the announcement recently that the minimum wage for farm workers will rise to R18 per hour from 1 May next year. This immediately led to an outcry from farmers, well reported by the media, that the wage at that level is unaffordable, would lead to job losses, and would further drive farmers off the land. A lot of heat, but not much light. So, let's paint the full picture. K The R18 per hour minimum wage (and its equivalent for weekly and monthly-paid workers) applies to all workers, regardless of their industry, and is the result of the imposition of the much-discussed national minimum wage of R3 500 per month. It looks like it applies only to farm workers because the agricultural sector is one of the most lowly-paid, with considerable numbers being paid a cash wage below this level. K There exists already (as is well-known) a sectoral determination wage for farm workers, which increases annually according to an inflation-linked formula. At present it seems that the formula will translate to an increased wage of R16,92 per hour from 1 March, an increase of R1,53 per hour over the current sectoral wage minimum. K Thus, adding the sectoral determination increase to the national minimum wage increase means that farmers paying their workers at the minimum level will be forced to increase their wage bill by 16,32% next year in two phases, in March, and in May. One of the problems associated with wages in the agricultural sector is that it is one of the most complex industries in terms of total emoluments. Thus, while the cash wage appears low, it is often accompanied by a host of non-cash benefits, such as free or subsidised accommodation, schooling for the children, transport, foodstuffs and even medical care. None of these benefits, as diverse as they are, are taken into account in the minimum wage structure, which relates purely to the cash received by the worker at the end of the work cycle. Can the farming industry afford a wage increase of 16-plus% in a year? On the face of it, probably not in many cases. But, likewise, there are many farmers who already pay their workers way above the minimum, both in terms of cash, and in non-cash benefits. So it is by no means the case that all farmers, and all farm workers, will be affected by the increase. Nevertheless, for those farmers who are already struggling, not to mention the many new smallholder farmers being established by the government, an increase in the wage bill of more than double the inflation rate in one year may well be the straw that breaks the camel's back. Hardly a good outcome, we suggest. The problem is that the entire national minimum wage saga flies in the face of established economic theory, and is being pushed through, we believe, by a govern- ment desperate to endear itself to the electorate rather than with any thought to the long-term damage it may cause or benefits that may accrue. On the one hand, simple economics tells one that imposing a national minimum wage, even one as low as R3 500 per month, may lead to job losses ~ not only in the farming sector ~ and as a result is going to add to South Africa's already high unem- ployment rate. On the other, while a national minimum wage of R3 500 sounds grand, it is still below the level at which a family of four can feed itself a nutritious diet (see previous articles in our series #SAFoodCrisis, notably the article in our August edition). Thus, it's a vote- getting chimera. In reality it will lead to job losses while still leaving poor people too poor to be able to feed themselves. Far better, therefore, for the government to tackle the real elephant in the room, which is the rapacious greed for profit of the food processing, distribution and retailing sector. Rather than introducing half-thought-through socialist vote-catching claptrap like a national minimum wage, tackle the low prices paid to farmers for their produce on the one hand and the high prices paid by consumers for foodstuffs on the other. The problem with that is that such policies require real thought and application, and will prove unpopular with the corporate sector. They require the reining in of greed, which is not a vote getter, rather than the handing out of largesse, which is. SAY YOU SAW IT IN THE GAUTENG SMALLHOLDER