DEFRA has published a consultation paper on abolishing the Agricultural Wages Board for England and Wales, a move which it says could free farmers up to create 1,000 new jobs.
The government announced its intention to disband the AWB back in July 2010, but needs to consult as part of the legal process.
DEFRA says removing the board will bring farming into line with other areas of the economy, reduce red tape and make it easier for employees to receive annual salaries rather than hourly wages.
However, critics of the plans say it will actually add to the bureaucratic burden of many smaller farms and its abolition would be wrong.
Farm minister David Heath said: "Agricultural wages boards were designed almost 100 years ago when conditions were very different to the modern age, and there was little to protect workers from unscrupulous employers.
"Now we have the national minimum wage and other employment protections, it's about time we got rid of a burdensome anomaly, saving farmers significant time, effort and money, generating up to 1,000 jobs, and allowing workers with top-class skills to agree top-class contracts with their employers."
NFU chief economist Phil Bicknell said the board was "an artefact" of an era of industrial relations.
"Farming is a business, yet the agricultural sector is unique in having employment and wage terms covered by separate legislation," he said. "Removing this separate structure seems entirely consistent with modern notions of workers' rights, industrial relations and business management.
"The reality is that few farm workers currently receive only the minimums set by the AWB. Average earnings for full-time farm workers were 41% above the industry minimums set by the AWB and few are paid near to the minimum set out in the order. Farmers now pay competitive rates to attract and retain skills, just like any other business."
The NFU has pledged to help farmers make a decision on how much to pay their staff by publishing key indicators of what is happening in the labour market place.
Shadow food and farming minister Huw Irranca-Davies said plans to abolish the AWB were wrong as it offered more than just minimum payment rates. It also gave farming a visible career structure and set legally enforceable minimum conditions for workers which were not covered by the national minimum wage and the Working Time Directive.
Mr Irranca-Davies said he was highly dubious over the claim that removing the board would create new jobs. "Many smaller farms use the AWB to avoid getting into bureaucratic negotiations with their workers and they also use the rates if they hire themselves out. It means for smaller businesses that they know the rules of the game. Removing it could add to the costs and complexities for small farms."
Isabel Davies on G+