The House of Lords has voted 192-163 to abolish the Agricultural Wages Board.
At present, the Agricultural Wages Board (AWB) sets the minimum wage and other terms and conditions of employment for workers employed in agriculture.

The government's plans form part of the Enterprise and Regulatory Reform Bill, which was being debated for a third day at report stage.

Business Minister Viscount Younger of Leckie told the House: "It is widely accepted that the legislation which underpins the Agricultural Wages Board is outdated and hampers the ability of the industry to offer more modern, flexible employment packages."

He stressed that "there is no reason why they should be treated differently" to other employees, who are subject to the national minimum wage.

For the opposition, former rural affairs minister Lord Whitty asserted that "the burden of administration on farmers is actually less under the Agricultural Wages Board.

"Money will not come out of the pockets of farm workers and into the pockets of farmers - it will go out of the rural communities entirely and into the pockets of supermarkets," Lord Whitty added.