Prospects for Ag Labor Costly

OMAHA (DTN) -- At least some farmers will likely get caught up in President-elect Donald Trump's mass deportation plans, and agriculture is unlikely to get much help from Congress on labor, according to an agricultural labor adviser in Trump's first administration.

Different groups right now are assessing what to expect under the Trump administration when it comes to farm labor and what the impacts of mass deportations could mean.

Kristi Boswell was a political appointee under Trump's first term, working as an adviser to USDA and the White House on agricultural labor issues. Boswell was a former lobbyist for the American Farm Bureau Federation and focused on farm labor. She now works at the law firm Alston & Bird and still consults on agricultural labor issues. Boswell spoke last week to agricultural bankers about what to expect during the next Trump administration.

Boswell said she's been reaching out to the Trump transition team on agricultural labor and deportation proposals. Boswell said she's been hearing from producers who are not using the H-2A program. "There's a lot of angst out there." And producers should be concerned if they are worried about the status of their workforce, she said.

She noted Trump's supporters have said they will focus more on criminals and those considered a security threat.

"That said, it is very well known that agriculture does have some workers that are working in an undocumented status. I would not be surprised if there were a few examples made of some farmers -- some operations. It created a lot of instability, and even if there is not an enforcement action, what we saw in 2016 and in the first administration is that a lot of workers just stop showing up for work because they are nervous, and they don't know what's going to happen."

Boswell added she also expects some "economic disruptions to some extent" to come from the deportation push.

Trump on Monday posted on social media responding to a separate post that he would use the military to deport migrants. "TRUE!!!" Trump responded.

Farmers have about 1.2 million workers overall, and it is estimated anywhere from 50% to 70% of those workers are undocumented or are using false documents on their jobs. Overall, about 90% of all farmworkers come from Mexico.

H-2A CONTINUES TO GROW

Concerns about legal labor over the past decade have led to an explosion of reliance on the Department of Labor's H-2A program. Last year, the Department of Labor (DOL) approved 310,676 H-2A visas for farm workers, which is four times the volume of agricultural guest workers from a decade ago.

H-2A, however, has layers of bureaucracy that comes with it. The Department of Labor has to certify that there are no U.S. farmworkers for the jobs that a farm requests. The Department of Homeland Security then issues the visa to the farm worker for that job.

"The process is complicated for sophisticated employers. It is why there are a lot of agents that help with this process because it is very, very complicated, especially if you are only wanting two or three workers," Boswell said.

H-2A also remains focused on seasonal farm workers. That means dairy farmers and other livestock producers who need year-round workers cannot use the program. This has been one of the sticking points in trying to reform the program.

H-2A guest workers are becoming more expensive. The Department of Labor sets the Adverse Effect Wage Rate (AEWR) as a minimum hourly rate farmers must pay H-2A guest workers. Those wages can range from $14.50 an hour in the Southeastern states to $19.75 in states such as California.

Still, Boswell said she expects farmers are going to rely more heavily on H-2A going forward.

"Your customers are going to have a lot more H-2A usage across the country," she told ag bankers.

Agricultural labor has been a long-standing challenge in Congress where one chamber will pass a bill, but the other chamber then declines to act. This year the House Agriculture Committee put together a bipartisan set of recommendations to address agricultural labor challenges. The committee, however, doesn't have direct jurisdiction over those issues. That falls under the House Judiciary Committee. But Rep. Jim Jordan, R-Ohio, chairs that committee.

"He is not interested in pursuing any ag-labor reform bills, but there are these bipartisan recommendations out there, and hopefully they can be picked up in various efforts," Boswell said.

FARM FOUNDATION PANEL

The Farm Foundation on Tuesday held a forum looking at agricultural labor challenges tied to costs and regulations.

Alexandra Hill, an associate professor of agricultural extension at the University of California-Berkeley, on the Farm Foundation panel, said getting rid of roughly 40% of the agricultural workforce "would be extremely detrimental." A mass exodus of farm workers would lead to a push for greater H-2A demand and increase food costs as well. "In general, there would need to be a policy that goes along with it that reduces the costs of the H-2A program or presents an avenue for a path to citizenship," Hill said.

Philip Martin, a professor emeritus in agricultural economics at the University of California-Davis, noted that finding a fix for agricultural labor has been difficult in Congress because Republicans are reluctant to legalize those undocumented workers. "Amnesty is almost always a hard sell," Martin said. He added, "I have a hard time believing we will see a legalization program."

Michael Marsh, CEO of the National Council of Agricultural Employers, said the slim margins in Congress will also make it difficult to pass anything. Still, Marsh said farm employers are hoping Congress could freeze the AEWR in the lame-duck session and throw out a Biden administration farmworker protection rule that is already blocked in at least 17 states.

Looking ahead, Martin said farmers are going to be looking at options such as mechanization where it is feasible. That's more practical in some fruits and vegetables than others.

"Farmers who are producing labor-intensive commodities are having to decide: What do I do over the next five to 10 years? Do I invest in labor-saving machines? Do I invest in housing and hiring migrant H-2A workers, or do I change crops in the U.S. and look to import from abroad?" Martin said.

Another option will be shifting more fruit and vegetable production to countries such as Mexico and exporting that produce into the U.S. The U.S. already imports most of its fruit and 40% or so of vegetables. A large share of those crops come from Mexico, where workers make in a day what a farm worker in California or Washington state might make in an hour.

Martin said the labor challenges in the U.S. on farms is not unique. "If you look around the world, the one thing you realize is no country has solved the seasonal farm labor problem. Whether you are in Australia, or the UK (United Kingdom), or Spain or Germany, they are all debating the same issues as we are debating."

Chris Clayton can be reached at Chris.Clayton@dtn.com

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