5 June 1998

Proposed minimum wage estimated to cost farmers £50m

By Robert Harris

FARMERS will have to pay up to £50m more for labour if the Low Pay Commissions recently delivered minimum wage report is accepted by ministers.

The horticultural sector will be hit hardest, since it employs most of the UKs estimated 70,000 agricultural casual workers – those employed on a daily basis for a maximum of 20 weeks a year – who earn less than the minimum wage.

"This means an increase of about 15% on present rates," says Michael Holmes, chairman of the NFUs horticultural executive committee. "Its a tremendous cost burden to the horticultural industry which relies on seasonal labour."

The industry is already struggling to compete with cheap imports, he adds. "This could damage our competitiveness further – its going to be quite a blow."

Casual workers aged 21 and over will be entitled to a 39p an hour wage increase from next April if the proposed £3.60 minimum adult rate becomes law. Casuals aged 18 will receive 47p more to bring them up to the proposed £3.20 an hour minimum wage for 18-20 year olds; those aged 19-20 will be unaffected, since they already receive more. All rates are expected to be increased by 10p the following year.

Peter Brice, who grows 80ha (200 acres) of strawberries, 24ha (60 acres) of raspberries and a range of top fruit at Mockbeggar Farms, near Rochester, Kent, reckons his £650,000 casual wage bill could rise by 20%. Last year the farm, whose picking season lasts from May to December, employed 1700 casual workers.

"The rise will have a very severe effect on fruit growers. Besides the direct increase in wages, there will be a lot of pressure to put all rates up. Better paid workers may seek to maintain the pay differential," he points out.

The ruling could also discriminate against less able casuals on piece work who may not be able to meet the higher targets.