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Grain sector strike could put jobs on the line
Grain sector strike could put jobs on the line

Grain sector strike could put jobs on the line

ECONOMIC NEWS

IOL Business - Jun 9th 2016, 11:59

Johannesburg - Economists warned yesterday that the proposed strike by the Food and Allied Workers Union (Fawu) might lead to potential job losses in the grain industry as employers replaced workers with machinery. 

Dawie Roodt, the chief economist at the Efficient Group, said, “The workers need to be very careful on how they go about in handling the strike. The grain industry is a very mechanised industry and employers might have an excuse of getting rid and reducing its workforce with machinery.”

Fawu, which represents almost 10 000 workers, plans to strike tomorrow. It served eight employers in the grain industry with a strike notification on Monday (6 May) when wage negotiations failed.

Both parties resumed talks yesterday to try to resolve the stand-off.

Roodt said the industry was going through a difficult time with drought and the depreciation of the rand. “The labour issues are the last thing they wanted to worry about at this time,” he said.

However, economists say as it is not the planting season but the harvesting season the effects of a strike could be limited.

Paul Makube, a senior agricultural economist at FNB, said: “I am sure if the workers do go on strike tomorrow the employers will come with contingency measures to limit the damage of the strike. It is better the threat of the strike has come during the harvesting season. It would have been severe if the workers had decided to strike during the planting season.”

According to Makube, South Africa produces 7 million tons of maize a year. “We need 11 million tons a year – we have about 2.9 million tons in reserves and we need to import the shortfall to meet the demand. I don’t expect the strike to have a significant impact on the economy, but it will have a negative impact on the supply side as the workers might stay away from work.

“Employers are using big machinery to harvest and since this is a harvesting season, the employers will find a way to ensure that work is not disrupted by the strike,” he said.

According to Statistics SA, South Africa’s official unemployment rate for the first quarter of this year stands at 26.7 percent, representing a 2.2 percentage point increase compared with the last quarter of last year. This meant 5.7 million out of 36.4 million people of working age were unemployed during the first four months of this year.

Stats SA said yesterday that gross domestic product data declined by 1.2 percent in the first quarter of this year, and showed that farming output had contracted by an annualised 6.5 percent, the fifth consecutive quarter of decline.

“The impact of the strike will depend on its intensity and how long it lasts. I hope there won’t be job losses. We don’t need more additions to the already high unemployment figures,” Makube said.

The eight employers are OVK, VKB, Suidwes, Senwes, Grain Field Chickens, GWK, NWK, and Obaro. Fawu deputy general secretary Moleko Phakedi said they did understand the challenges the sector was facing, but some employees were only taking home R2 800 a month after deductions.

“The strike is a very costly exercise to both employer and employee as both lose money – wages on the side of the employee. It is a very dangerous thing to do. This will put pressure on inflation and it is always the poor that are affected the most,” Roodt said.

The workers are demanding a 9 percent wage increase, while the employers are offering between 3 percent and 8 percent. The employers said the drought made it impossible to meet the demands of the union because they had produced less than the previous season.From IOL Business 

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