Perceptions of smallholder and commercial farmers towards the 2018 Agricultural minimum wage : a case study in Bushbuckridge Municipality of Mpumalanga Province

Abstract

The President of South Africa signed the National Minimum Wage Act, the amendment of both the Basic Conditions of Employment Act and Labour Relations Act on Friday, 23 November 2018. These Acts, which were with effect from 1 January 2019, oblige all employers to pay at least the national minimum wage of R20.00/hr. and the agricultural sector has been given an exemption to pay 90% respectively of the national minimum wage (Truter, 2018). Employers in the farming sector are expected to pay at least R18.00 per hour to farm workers. However, farmers are different in terms of their characteristics and farming capacities, and they hold different perceptions towards the revised 2018 agricultural minimum wage. According to Sechaba (2017), it is believed that there will always be different views on what constitutes a decent and acceptable minimum wage. This study investigated the perception of both smallholder and commercial farmers towards the 2018 agricultural minimum wage in Bushbuckridge Local Municipality of the Mpumalanga Province, South Africa. The study had three objectives; the first objective was to identify and describe the socio-economic characteristics of farmers, the second one was to assess the perception of farmers on the 2018 agricultural minimum wage and the third one was to analyse socio-economic factors influencing the perception of farmers towards agricultural minimum wage in Bushbuckridge Municipality. Purposive sampling was used to collect primary data from 160 smallholder and commercial farmers (Crop and Livestock) in Bushbuckridge Local Municipality (BLM). For empirical analysis the Multinomial Logistic Model was applied for data analysis based on information generated using the Likert scale and the two formulated assumptions; firstly, farmers do not have negative perceptions towards the 2018 agricultural minimum wage and lastly socioeconomic factors do not influence farmers’ perception towards the 2018 agricultural minimum wage. For empirical analysis, Multinomial logistic regression model was run on spss and the descriptive statistics was used to analyse the perception of famers based on the rank data from the Likert scale. Results from Multinomial regression analysis indicated that demographic factors such as number of hectares, household size, age, farming experience, marital status, and labour productivity were found to be significant vi (at 1, 5 and 10%) in distinguishing between pairs of groups and contribution, which they make to change the odds of being in one dependent variable group rather than the other. About 48.8% sampled farmers in Bushbuckridge Local Municipality showed negative perceptions towards the 2018 agricultural minimum wage and were not likely to comply with the 2018 agricultural minimum wage legislation in a sense that they had not been paying the prescribed agricultural minimum wage to farm workers. Those who had positive perceptions and were willing to comply were only 15.0% and those who were uncertain on whether to comply or not comply with the 2018 agricultural minimum wage were 36.2%. Therefore, it can be concluded from results that smallholder and commercial farmers perceive the agricultural minimum wage differently and with majority of them not willing to comply or pay the prescribed amount. Additionally, several factors influences the perception on whether farmers were likely to comply or not to comply by paying the prescribed minimum wage to farm workers, based on the 2018 agricultural minimum wage. Variables: number of hectares, household size, age, experience, marital status and minimum wage were found to be significant (at different significant levels 1, 5 and 10%) in determining whether farmers were more likely or less likely to comply and pay the 2018 agricultural minimum wage. These variables plays a key role in determining farmers’ decision to comply or not to comply with the 2018 agricultural minimum wage. However, gender, minimum wage for farmers, distance to market, access to mechanisation, co-operative membership, access to news, pensioner and educational status were found to be insignificant (at different significant levels 1%, 5% and 10%) at determining whether farmers were likely to comply or not comply with the 2018 agricultural minimum wage. Thus, it is recommended that farmers, regardless of their production scale should be consulted and given a fair platform to articulate their views during the process of policy formulation. Policy makers and government should refrain from using a blanket approach when formulating a policy and taking into consideration the issue of disparities in the agricultural sector, subsectors, regions and operational scale of farmers when discussing the agricultural minimum wage policy.