Consultant advises 1% farm wages rise

A 1% wage rate rise is being recommended by Strutt & Parker on the farms it advises.  

The firm offers a guide for employers in England who are no longer covered by the rates set down by the Agricultural Wages Board since it was disbanded in 2013. Rises traditionally take effect from 1 October.

Minimum wage levels for farm workers are still set by an official pay review body in Northern Ireland, Scotland and Wales.

“The most basic payment – the equivalent to the old AWB Grade 1 – is effectively the same as the National Living Wage (NLW) at £7.20/hour,” said partner George Chichester. 

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“In practice, very few farm workers are paid on Grade 1 level – most are paid as craftsman or grade 4 level,” he said.

“The effect of such an increase – when added to the 1% increase, which we recommended to our clients last year, 2.3% the previous year and 1.9% the year before that – would be to raise the craftsman’s rate to £8.73/hour.”

“Farm workers’ wages have historically been considered to be at the lower end of the spectrum. However, increases in agricultural wages have generally exceeded those in other sectors for many years and gradually they have been catching up with other sectors – especially when perks such as the usual provision of no- or low-cost accommodation are taken into account.”

Challenging year

Mr Chichester said it had been another challenging year for the farming sector with low commodity prices putting significant pressure on farm profitability.

“However, it is important that wage reviews are carried out in a fair and transparent manner and we believe that our recommendation helps employers to do that.”

The recommendation has been based on a 0.6% rise in the Consumer Price Index (CPI) and a 1.1% increase in a new form of the Retail Price Index (known as the RPIJ). Public sector workers have also generally been awarded a 1% increase for the 2016-17 year.

The Northern Ireland Department of Agriculture – which still has a pay review body – has set an increase in agricultural wages of 1.9% for this year, taking the basic Grade 1 rate to £6.76/hour and their Craftsman’s rate (Grade 4) to £8.31/hour.

In Wales, where rates were last revised in February 2016, the Grade 4 Craftsman rate is £8.72/hour.

The Scottish Wages Board has delayed its pay award until April 2017.

Since last year most farm employers would also have completed auto-enrolment of their employees for a new pension scheme, which was costing the employer an additional 1% of wages, said Mr Chichester.

This pension contribution is set to rise to 2% in 2018-19 and 3% from April 2019.

A further rise in wages is expected from April 2017, when the national living wage rate may rise to about £7.60 an hour for those aged 25 and older.

This assumes it will follow a straight path in progressing to the government’s aim that it will represent 60% of median hourly earnings by 2020.