Faced with the spiralling costs of fuel, electricity, seed, fertiliser and other agricultural inputs, farmers are looking to cut back on the expenses they can control. With machines available to do a great deal of the work required on farms, the cost of labour is seen as one item that can be cut. Fuel, electricity and imported inputs such as fertiliser are largely seen as beyond farmers’ control.
Farmers spent a record R7.5bn on agricultural machinery last year, according to the South African Agricultural Machinery Association. Potatoes SA CEO Andre Jooste said rising costs were squeezing farmers.
Divan van der Westhuizen, an analyst with the Bureau for Food and Agricultural Policy, told the Potatoes SA congress that the minimum wage that Labour Minister Mildred Oliphant introduced this year meant big cost increases for farmers. A study by the bureau revealed that while labour unit costs per hectare rose on bigger farms, the unit costs of mechanisation fell as farms increased in size because of consolidation.
Mr van der Westhuizen said that the study had showed an increase of about R100,000 in seasonal labour costs on a 50ha farm. On a 350ha farm, the cost was about R1m.
By contrast, a harvester costing R2.2m that would result in 80 retrenchments, would cost R8,700/ha a year on a 50ha farm but just R1,250/ha a year on a 350ha farm. A planter that would put 20 people out of work would cost just R632/ha a year on a 50ha farm, falling to R90/ha a year on a 350ha farm.
The mechanisation of farm pack houses could be done for R3.9m (with used machines) and replace 90 workers.
With new machines the cost would be R9.2m.
Absa agribusiness head Ernst Janovsky said, in a presentation read by a colleague, prices of farm requisites were increasing faster than producer prices. Therefore, local farmers were being forced to become more productive.
source: iafrica
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