What does the Minimum Wage hike mean for Small Business Owners?

What does the Minimum Wage hike mean for Small Business Owners?

Minimum wages are on the rise – and so are the concerns of producers. In Ontario, the minimum wage will leap from $11.60 CAD to $15 CAD in under two years. In California, the current $13.04 CAD rate will increase to $18.63 CAD within five years. By 2020, New Zealand’s current rate of $14.29 CAD will have soared to $18.14 CAD, in only two years.

Significant minimum wage hikes pose a formidable challenge to growers. With labour costs rising and global crop prices remaining stagnant, profit margins are under threat like never before. The chair of the Ontario Fruit and Vegetable Growers Association, who employs about 20 people on his broccoli farm, estimates that the wage increase in his province will add $100,000 to his labour costs.

In addition to other increasing input costs such as electricity and fuel, the minimum wage hikes are creating a burden on growers with difficult decisions. Many are concerned that they will need to switch to less labour-intensive crops in order to remain profitable. Others fear they may be forced to downsize their farms or even exit the agricultural industry altogether.

As any grower knows, the elevated costs of production cannot simply be passed on to the consumer. Growers compete on an uneven playing field with foreign counterparts whose labour laws are much less stringent (or functionally non-existent). A basket of strawberries from Mexico, where the minimum wage is $5.91 CAD, will be temptingly cheaper than one grown in Ontario. While consumers’ willingness to pay a premium for local produce certainly is rising, growers must focus inwards on their production cycles to extract higher revenues.

Some growers opt to combat soaring labour costs by turning to automation. However, in many cases, the initial investment is simply too great for a rural grower to bear. And for many crops - like apples, sweet cherries, table grapes, asparagus, and peppers - this solution is simply not feasible. Until we build robots that can mimic the delicacy and precision of human hands and the nuanced perception of our brains, growers of labour- intensive crops will need to look beyond automation to mitigate their rising costs.

Since joining Dragonfly Information Technology Inc., I have been working on their Croptracker app, and have learned how other forms of technology can help growers – not by eliminating their labour force, but by maximizing the potential of their team. I’ve also seen how it can help optimize operations across all areas of the farm and help balance the cost-revenue equation that growers feel is becoming increasingly lopsided.

Minimizing wastage and misuse, both of physical resources and of their employees’ time, is always a top priority - and it’s increasingly important when profit margins are worn thin by rising costs. Creating spray and employee schedules is key to ensuring no chemicals or tasks are unnecessarily repeated or forgotten. If these schedules are

uploaded to the cloud and updates are shared instantly with your whole team, miscommunication and mishaps are avoided.

Being able to know what task each team member is working on at any given time is a reality in the digital age, and the benefits are huge. Cloud-based employee time tracking capabilities allow growers to easily identify issues in the work flow and act accordingly – before issues become costly problems. With such up-to-date information available in your pocket, time within supervisory roles can be spent – potentially much more lucratively – elsewhere. The same can be said for time spent completing employee timesheets and payroll. Croptracker’s ability to automate such paperwork enables growers to spend more of their valuable time in their fields rather than their office.

It’s especially critical during harvest that all produce is safely on the trucks and off to the retailer. Post-harvest losses represent a major global problem, and to an individual farmer, the effects can be no less devastating. RFID technology can assist to manage storage containers and their contents so growers can fulfill orders quickly and more accurately based on the age and grade of their produce.

Dragonfly’s Croptracker app, available on desktop and mobile devices, can help growers maximize operations and profits. It’s been an amazing experience working with a team that’s constantly innovating and pushing the limits of technology to help make horticulture more profitable for growers. Drastic minimum wage hikes are threatening; but growers’ expertise, knowledge, and wisdom - with a little help from technology - will ensure their fields and their profit margins continue to thrive.

Author:
Rachel Shaw
Marketing & Sales Coordinator, Dragonfly IT
Bioenterprise Recent Graduate & Mentorship Program

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