New farm wage guide published for England

An annual wage review guide for employers in England has been published for those who are no longer covered by Agricultural Wages Board rates.

Minimum wage levels for farm workers are still set by an official pay review body 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 1 October.

George Chichester, partner with Strutt & Parker, said the business was recommending to its clients to apply a 1.0% increase to farm workers’ wages for the coming year.

"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/hr.

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

Another challenging year

"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/hr."

"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.”

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.”

Pay across the UK

The recommendation has been based on a 0.6% rise in the Consumer Price Index (CPI) and a 1.1% increase in a new, more accurate 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 determined an increase in agricultural wages of 1.9% for this year, taking the basic Grade 1 rate to £6.76/hr and their Craftsman’s rate (Grade 4) to £8.31/hr.

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

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

Mr Chichester said it was also worth noting that since last year most farm employers will have completed the auto-enrollment of their employees for a new pension scheme, which is now costing the employer an additional 1% of wages.

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