There will be a 2.8 per cent rise for grades two and above (to £6.96 per hour) and a 1.8 per cent increase for grade one workers. This reflects the National Minimum Wage and will rise to £6.21 when the Agricultural Wages Order is applied from October 1 this year.

NFU lead negotiator Bob Fiddaman said: “These were particularly tough negotiations. Recent years have seen contrasting fortunes across agricultural sectors, creating a challenge for the board to agree on an industry-wide figure. For example, the fortunes of combinable crops and horticulture have diverged over the last 12 months, whilst milk price cuts have dominated recent headlines. In addition, we know that agricultural profitability is strongly related to currency, with concerns over the current Eurozone problems also a factor.”

NFU chief economist Phil Bicknell urged farmers to take note of the new rates. “At present, the timeframe regarding the abolition of the AWB remains unclear. Certainly for 2012, farm businesses employing workers should be aware of the new minimum rates applicable from October. However, as many of the 40,000 farms employing workers across England and Wales will know, it is local market conditions and competition that increasingly determine actual pay rates rather than the minimums set by the AWB.”

The NFU represents the employers’ interests at the AWB negotiations. Workers are represented by Unite the Union, and the board also includes government appointed representatives as independent arbitrators.