The new wage determination will be effective from 1 March 2013.
"I would like to announce ... the new level of the minimum wage for 1 March 2013 to 28 February 2014 be pegged at R105 per day for employees who work nine hours a day or R11.66 per hour, R525 weekly or R2274.82 per month," said the minister at a press briefing.
The new sectoral determination will be promulgated for a three-year period. During year two and three, wages will be increased by CPI (Quintile 1) plus 1.5 per cent.
The minister said the department would undertake a study to assess the impact of the new wage in the sector towards the end of term of the wage dispensation.
The announcement follows violent strikes by farmworkers, especially in the Western Cape, since November last year. Farmworkers had demanded R150 per day as a minimum wage.
On 15 November, the department published two notices in the Government Gazette announcing its intention to cancel the sectoral determination and also announced the start of a process to review the minimum wages in the agricultural sector.
"Alongside the negotiation process, [the department] commenced a process of public hearings conducted throughout the country to obtain inputs from the entire sector for purposes of reviewing the sectoral determination. This process was concluded on 18 December 2012 in all provinces except for the Western Cape where hearings were concluded on the 20 January 2013."
Ms Oliphant said during the public hearings, 483 employers/employer organisations attended, while 1145 employees/employee organisations attended and made meaningful inputs.
The investigation by the department and the Employment Conditions Commission was completed and the report with recommendations was forwarded to the minister.
"When considering the report by the ECC, the Basic Conditions of Employment Act requires that amongst other issues, the ability of the employer to conduct business successfully; the impact that the proposed wage will have on job creation and job retention; the impact of the minimum wage on poverty alleviation; and the impact that it would have on the cost of living should be considered.
"In addition, the ECC in its report indicated that when making its recommendations to me, they were also guided by the Bureau for Food and Agricultural Policy (BFAP) report," said the minister.
The BFAP report is an analysis of agricultural wages in South Africa. The report highlighted that the average wage base of farm workers is R84.90 per day and that if the average wage increases to more than R104.98 per day, many farms will be unable to cover their operating expenses, and hence not be able to pay back borrowings or to afford entrepreneurs remuneration.
Ms Oliphant said, having studied and considered the recommendations by the majority members of the ECC, she had decided to peg the new minimum wage at R105 per day.
She said the department would be forwarding the BFAP report to NEDLAC for consideration in dealing with the long term issues relating to the transformation of the agricultural sector in South Africa.
The minister urged organised business and labour in the sector to come together to find ways of improving labour relations in their sector.
"It is time to begin working together towards a vision for the farming sector, one in which the sector expands and creates jobs and where there are better relations between farmers and farmworkers and their organisations."
