South African farming organization Agri SA has urged caution over the National Minimum Wage Act recently approved by parliament on Tuesday with a large majority.

The measure will see millions of workers earn 3,500 rand (US$277) a month, and had been initially meant to be introduced earlier in May as part of efforts to boost the economy.

“The agricultural sector is very complex, considering that the vast majority of farming operations can be considered SME’s [small and medium enterprises], many of whom are already loss-making through a combination of drought conditions and low international commodity prices,” said Neil Hamman, chairman of Agri SA’s Labour and Development Centre of Excellence.

“Agri SA remains cautious and is advising stakeholders to also exert caution as to the effect the National Minimum Wage will have on financially vulnerable farming operations.”

However, he said the bill was a step toward certainty.

“We are glad that our sectoral determination is still there, and we welcome the formation of the National Minimum Wage Commission, which will have the responsibility of determining the National Minimum Wage, going forward," he said.

Agri SA said it will focus on ensuring that all its members are aware of their rights and responsibilities in terms of the act, adding that it has excellent relationships with the Department of Labour and the Commission for Conciliation, Mediation and Arbitration, who will have to enforce the legislation.

The bill will now move to parliament's upper house for ratification.

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