Minimum wage ‘could spell farming peril’

Barbadians are being warned that the impending new minimum wage will have significant implications for the future of the country’s agricultural industry.

On one hand, Chief Executive Officer (CEO) of the Barbados Agricultural Society (BAS) James Paul expects some small enterprises to fold due to the abrupt cost increases, while on the other, he predicts further escalation in the prices of locally produced food.

This, he argues, could strip local farmers of any competitive advantage over imported products and make the local items considerably more expensive than products from neighbouring Caribbean Community (CARICOM) member states.

The issue appears to be driving a wedge between the Mia Mottley administration and the country’s private sector. Last week, more than five Members of Parliament nailed down the need for the Government to push ahead with its implementation on April 1.

The Chamber of Commerce and Industry and the Barbados Private Sector Association have pushed back on the Thursday start date for the new minimum wage requirements, arguing that the increase from $6.25 to $8.50 an hour is simply too much in the current economic environment and should be delayed.

This week Minister of Labour  Colin Jordan declared that the Government will not be backing down, and commercial players are now warning of even more layoffs.

In addition to the numerous issues outlined by the private sector, the BAS chief executive contends that the agricultural industry is simultaneously contending with cost increases with basic commodities like water.

“It is coming at a time when the business environment is very tough and in some cases there are survival issues for some businesses. I think there may be a need for some discussion in terms of implementation and how it can happen to determine if the implementation process can be more phased,” Paul told Barbados TODAY.

“Some more established businesses will probably be in a better position to pay, while others who are now becoming established may not be able to guarantee full employment in terms of a 40-hour week, and that in itself might limit the ability of some of those businesses in circumstances where the industry is already facing certain challenges.

“Sometimes businesses need to be met where they are, especially in these difficult economic circumstances that we are facing,” the BAS president argued.

But even more concerning for local agriculture stakeholders, is the issue of competitiveness, particularly with CARICOM countries, whose wages are already well below those paid in Barbados and in Trinidad for example, where energy costs are low. Among the sub sectors most likely to be affected, Paul noted are livestock and poultry which he expects will receive stiff competition from Jamaica.

“Wages go into the factors of production as we all know, so if we are importing goods from other countries that compete with Barbados, those persons producing those goods are being paid at a cheaper rate. What it will mean is that our goods produced here in Barbados will be at a comparative disadvantage to those goods that are produced in other islands in the region. Yet, we are forced to compete with those products that are imported, not recognising that we cannot compete,” Paul explained.

In fact, he floated the suggestion that issues like minimum wages should be tackled at the level of CARICOM member states.

“It might be a bigger project, but if we are in a common market or whatever it is they say we are in, the issue of a minimum wage cannot just be viewed as a country concern,” the BAS executive posited.

“It should be viewed across the region because if we are saying that we are expecting free trade and movement of goods, there must also be some kind of policy convergence in respect of how we treat our workers. And if in one country, workers are provided with a better level of wages than another country, it should be an issue that all CARICOM governments would want to address,” he concluded. (kareemsmith@barbadostoday.bb)