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Impact of the Sectoral Determination for Farm Workers on the South African Sugar Industry: Case Study of the KwaZulu-Natal North and South Coasts

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  • Murray, Justin
  • van Walbeek, Corne

Abstract

A survey of 103 sugarcane farmers on the KwaZulu-Natal coast was conducted in order to analyse the impact of the Sectoral Determination for Farm Workers (2002) on South African agriculture. The sample was separated into a high wage paying North Coast and lower wage paying South Coast. Typically farmers were unable to distinguish between the impact of the Sectoral Determination and other labour laws. Results indicate that the impact of the legislation is similar in each region. No respondents reported mass retrenchment, but job shedding is disguised by not replacing workers (especially unskilled workers) that leave the farm. A sizeable number of growers (17 per cent on the South Coast and 44 per cent on the North Coast) have reduced the working week to 27 hours (or 36 hours in the Felixton Mill Group Area) enabling them to pay wages on an hourly, rather than a weekly basis. This strategy reduces the effective wage. About 40 per cent of growers have reduced the in-kind benefits to their workers. About half of respondents indicated that they are likely to increase their use of seasonal and contract labour in future. Although a majority of respondents indicated that they considered mechanisation of the harvesting process, cost and topographical factors currently does not make this a serious alternative to manual harvesting. However, because of increased wage costs and the relatively strong currency in recent years, chemical weed control has become an attractive alternative to manual weed control.

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Bibliographic Info

Article provided by Agricultural Economics Association of South Africa (AEASA) in its journal Agrekon.

Volume (Year): 46 (2007)
Issue (Month): 1 (March)
Pages:

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Handle: RePEc:ags:agreko:10131

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Web page: http://www.aeasa.org.za/
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Keywords: Crop Production/Industries; Labor and Human Capital;

References

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  1. Katz, L.F. & Krueger, A.B., 1992. "The Effect of the Minimum Wage on the Fast Food Industry," Harvard Institute of Economic Research Working Papers 1584, Harvard - Institute of Economic Research.
  2. Newman, R.A. & Ortmann, Gerald F. & Lyne, Michael C., 1997. "Farm Labour Remuneration, Labour Legislation And Commercial Farmers' Perceptions In Kwazulu-Natal," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 36(1), March.
  3. E.J. Goedecke & G.F. Ortmann, 1993. "Transaction Costs and Labour Contracting in the South African Forestry Industry," South African Journal of Economics, Economic Society of South Africa, vol. 61(1), pages 44-54, 03.
  4. Cubitt, Robin P & Heap, Shaun P Hargreaves, 1999. "Minimum Wage Legislation, Investment and Human Capital," Scottish Journal of Political Economy, Scottish Economic Society, vol. 46(2), pages 135-57, May.
  5. Richard Dickens & Stephen Machin & Alan Manning, 1994. "The Effects of Minimum Wages on Employment: Theory and Evidence from Britain," CEP Discussion Papers dp0183, Centre for Economic Performance, LSE.
  6. Beatrice Conradie, 2004. "Wages and wage elasticities for wine and table grapes in South Africa," SALDRU/CSSR Working Papers 090, Southern Africa Labour and Development Research Unit, University of Cape Town.
  7. Roumasset, James & Uy, Marilou, 1980. "Piece rates, time rates, and teams : Explaining patterns in the employment relation," Journal of Economic Behavior & Organization, Elsevier, vol. 1(4), pages 343-360, December.
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Cited by:
  1. Bhorat, Haroon & Naidoo, Karmen & Yu, Derek, 2014. "Trade unions in an emerging economy: The case of South Africa," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  2. Haroon Bhorat & Ravi Kanbur & Natasha Mayet, 2012. "The Impact of Sectoral Minimum Wage Laws on Employment, Wages and Hours of Work in South Africa," Working Papers 12154, University of Cape Town, Development Policy Research Unit.

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