Johannesburg - Smaller farm operations would not be able to afford the new minimum wage increase, the National Employers' Association of SA said on Tuesday.
"Smaller operations, which are more labour intensive, will find it more difficult to deal with the increases," it said in a statement.
"It is in these areas where the danger of more retrenchment lies."
Labour Minister Mildred Oliphant on Monday announced a new minimum wage of R105 a day for farm workers, up from the current R69 a day, to take effect from March 1 this year.
Any form of a prescribed minimum wage was a deterrent to employment, especially with regard to small farming units and new entrants into the market, said Neasa chief executive Gerhard Papenfus.
Commercial farmers' union TAU SA called for the increase to be put on ice.
"TAU SA is of the opinion that the agricultural sector cannot afford these wages, and that the minister may have exceeded certain limits with her decision," the union said in a statement.
The increase of more than 50% was "beyond any limit of reasonability and fairness", the union said.
The Inkatha Freedom Party welcomed the increase.
Spokesperson Albert Mncwango said: "We are pleased that a solution has finally been found to end the strike that threatened not only human life but the collapse of the farming industry."
Farmworkers' union Bawsi Agricultural Workers Union of SA (Bawusa) said the increase was not enough.
"We have expected her [Oliphant] to do much better than this. R120 per day would have been a much better call... the R105 is the going rate at plant-to-plant negotiations," the union said in a statement.