Farm businesses in England may need to deliver a higher percent wage increase for 2018/19 than they have in previous years.
Pressure on farm employers in England to deliver above inflation wage rises is building, according to analysis by Strutt & Parker.
This is to keep in line with changes in the National Living Wage and agricultural wage rates in the rest of the UK.
However, it may be appropriate for the actual percentage increase to differ between farmworkers, reflecting other non-pay benefits and current levels of pay.
Minimum wage levels for farmworkers are still set by official pay review bodies in Northern Ireland, Scotland and Wales.
However, in England the Agricultural Wages Board (AWB) was disbanded in 2013, so there are now no formal figures on which to base the annual review which traditionally takes effect from October.
Strutt & Parker analysis pointed towards a 1.4% wage increase in 2017, 1% in 2016, 1% in 2015, 2.3% in 2014 and 1.9% in 2013.
George Chichester, farming consultant for Strutt & Parker said: “We know arable farmers on light land have had a poor harvest and livestock farmers are also facing considerable pressure due to lack of forage and the high cost of concentrate feeds.
“However, the National Living Wage – for employees aged over 25 – rose by 4.4% from £7.50 to £7.83/hr with effect from 1 April 2018. This means the rate for a ‘standard’ (Grade 2 equivalent) agricultural worker must at least match this minimum hourly rate.
“The pay bodies in Northern Ireland, Scotland and Wales also agreed pay increases for Craftsman Grade workers ranging from 3.5% to 5%. The highest rate agreed is in Wales where the rate for Grade 4 equivalent workers is now £9.16/hr.”
He said: “It is difficult to justify suggesting that English employers should pay their employees less than they would receive if working in Wales – particularly given the shortages in skilled labour the sector is facing.
“But this does mean applying a 3.5% increase for farm staff on the basic Craftsmen’s rate (Grade 4), which some employers may find challenging following a difficult year.
“In line with government pay reviews for the public sector, it may be appropriate for those paid above the basic rate to receive lower percentage increases.
Mr Chichester added: “Employers may also want to take into consideration any other non-pay benefits which are part of the package, such as accommodation and opportunities for career progression.
“Taking all these factors into account, we are suggesting employers consider increases in the range of 2.5% to 3.5%.”
Employers are also reminded that their minimum pension contributions through auto-enrolment will rise by 1% to 3% in April 2019.
The employee’s contributions will also rise in April, from 3% to 5%, which means that despite a wage increase some workers will find their take-home pay may only increase a little.
