What is at Stake in the next Year in Albany?

No one has a lock on tomorrow. We each can offer our most sincere educated estimate about the future. We must try to stay within our known borders and then project what could possibly happen. With total 100% certainty the political climate in Albany in 2019 will be changed. We know for certain that all three chambers now rest comfortably within one party. This makes passage of party programs significantly easier to obtain. Based upon the history of the last decade, it is safe to assume new legislation will be offered up that will significantly impact our industry. The question yet to be decided will be whether we can withstand these revolutionary changes?

The most obvious issue that will be facing NYS agriculture will it be mandated, like all other segments of labor, to pay employees on a 40-hour work week and pay time and a half? Collective bargaining is also of concern. For today let us simply look at time and a half on a commercial fruit farm. To do this we will make a few assumptions. We will assume that for this farm to maintain a credible work force that they are in the H2A program. Last year the adverse effect wage rate was $12.83.  We do not know the new one but it most likely will be in the range of $13 plus.  For today I will use last year’s rate. For my calculations I am going to say harvest was 10 weeks. I am going

Paul Baker,
Executive Director
NYSHS

to say the farm employed 50 workers. The average work week in harvest was 60 hours. In 2018 then that farm had a weekly hourly outlay just for harvest wages of $38,490. (60 hours X $12.83= $769.80 per employee. Now X 50 employees = $38,490 per week). This, of course, does not consider State unemployment and workers comp related costs. If we now do the same exercise at time and a half for this same farm, we see his direct costs rise to $2 shy of $900 per man per week. So, his new payroll will be up (40 hours X $12.83= $513.20 plus 20 hours at $19.25= $385). So, the new weekly pay check will be then $898.20. Same crew and not one extra bushel harvested. This farm will then have a weekly payroll of harvest employees alone of $44,910 plus other employment charges (50 employees X $898.20= $44.910).

For our simple example, Fruit Farm X has an increase of $6,420 per week ($44,910 – $38,490 = $6420). Now over 10 weeks we see an increase to harvest employees alone of $64,200. Same production.

The NYS minimum wage in 2019 is $11.10. This is $3.85 above the federal minimum wage. If you are in H2A you are paying $5.58 above the federal minimum wage. Farm wages are not by any means the lowest in the land. They greatly exceed the average small business sectors up and down main street. We need to make this point. Each farm employee creates multiple off farm jobs in NYS. Clearly NYS fruit farms cannot remain competitive if they must absorb these new estimated charges. A compromise must be reached, or we will see NYS forever altered. I remind everyone of the stark reality that once a farm operation closes its doors it never returns. Are we ready to see this radicle change in our State? Now is the time for everyone to get concerned. Currently, we have not seen the legislation we did our math homework on in this State. Today is not too late to begin a very serious debate.

I am asking each of you to rethink all the issues. As farmers, we are not immune to annual changes in weather, technology and markets. It comes as no surprise to anyone that labor availability is tied to higher wages. Agriculture in NYS is tied to a very high usage of labor. We are not an Iowa corn-based economy. As the new year arrives each of you need to educate yourself on all levels. Take advantage of educational programs such as the Becker Forum coming in January 2019. Reach out to your respective NYS legislators and have a discussion with them as to what is at stake. Support the efforts of your respective organizations that are presenting logical debates to many of these proposals.  If you fail to speak, I assure you this void will be filled by voices that have no real skin in the game. Action will occur. I encourage you to be a part of it.

 

Annual Message

I have heard often that what happens in California is a good indication of which direction the country is heading. That may be true many times but for those of us here in New York State I think we may have a second read on this concept. Today California is deeply troubled by the reality that for farms to field a legal workforce they need to move heavily to the H2A program. This means that they must now become concerned with housing on a scale that frankly they are not prepared to cope with. No longer can they hire an employee and tell them to report to work the next day. Now they must provide approved housing for each new hire. Labor shortages are increasing in the West each day due to the requirements of compliance to H2A. I say welcome to our reality!

Here in New York we are seeing a sharp increase in the usage of the H2A program. The reality is that the labor pool that may migrate north is depleted and no longer able to fill our needs. To insure a labor supply adequate to meet your needs means you must make use of the H2A program. It may be cumbersome but it is workable if one follows the steps provided. Farm size has little to do with who is using this program. I know of several farms that are asking for only 2 employees. The point is, if you have a labor need no one is exempt.

Dairy continues to be the industry most at risk. We have seen countless attempts in Washington to get some relief for this industry. To date the seasonality clause remains the heavy lift. Many in dairy have expressed a strong desire to be allowed to participate in the H2A program. Some form of this may occur but thus far it remains a roadblock. The current H2C efforts if passed would offer some paths to relief. I see too many issues with this piece of legislation to ever make it to the finish line. The fact that we are still attempting to draft a good piece of legislation is the one bright take away from this H2C effort. If Dairy ever does get acceptance into the H2A program I think many will find themselves in the same position as California. Housing may be a huge barrier for this group to overcome.

Agriculture Affiliates/NYS Horticulture Society has agreed to participate in the 2018 Becker Forum. I have enclosed an agenda in this mailing for your review.  I would strongly encourage each farm to have some representation in Syracuse on January 15, 2018. We will have a one day review of many of the questions we will be facing both in Albany and DC in 2018. Second, we will have speakers from the State and Federal government to report on the most current news. We are offering a panel of three farms that have made the transition successfully to H2A. They will be a resource for all of you to hear what their observations of this process have been. As always we will allow a Q and A for you at the end to express your opinions. Please attend and consider sponsoring this program.

It may appear that we are fighting an uphill battle with regards to labor. I can understand this. I would

Paul Baker,
Executive Director
NYSHS

offer that we are making progress. Both in State and Nationally I see a broadening acceptance that Agriculture is very important to our economic security. Food security is a factor. From East to West we are seeing a centering of issues that I feel will only help to push sound guest worker legislation forward. New York State has been and will continue to be a leader in this growth. It is the participation of many of you that has kept our needs and issues current. We will with your participation and support continue to articulate your needs. I cannot state it more clearly that failure to be present when these issues are discussed is to surrender to concepts we know will offer only failure to our operations.

Thank you for your support;

 

Adverse Effect Wage Rates

State                              2017                              2018                                        %Change

New York                      $12.38                            $12.83                                     3.63%

Arizona                          $10.95                            $10.46                                     -4.47%

California                       $12.57                            $13.18                                     4.85%

Florida                           $11.12                            $11.29                                     1.53%

Georgia                          $10.62                            $10.95                                     3.11%

Hawaii                           $13.14                            $14.37                                     9.36%

Michigan                        $12.75                            $13.06                                     2.43%

New Hampshire              $12.38                            $12.83                                     3.63%

North Carolina               $11.27                            $11.46                                     1.69%

New Jersey                     $12.19                            $12.05                                     -1.15%

Ohio                               $13.01                            $12.93                                     -0.61%

Oregon                           $13.38                            $14.12                                     5.53%

Pennsylvania                  $12.19                            $12.05                                      -1.15%

Texas                             $11.00                            $11.87                                     2.42%

Vermont                         $12.38                            $12.83                                     3.63%

Virginia                          $11.27                            $11.46                                     1.69%

Washington                    $13.38                            $14.12                                     5.53%

Help Wanted

We have perhaps created a perfect solution or perhaps we are the architects of our own demise. You make your own conclusions. Here are a few of my observations after being back on the farm once again to assist in harvest.

First of all, many of the farms have converted to the H2A systems of sourcing their labor for harvest. Some have redefined the term harvest and are expanding the duties to machinery operation, orchard pruning and packing house. The shift is rapid and in almost every experience once an operation moves to H2A they remain there. Many will, in the first year, only try a small portion of their needs. Most will convert 100% in the second year. Size of operation has little to do with which operation joins. The range is from very small to multi orders of several employees. The reality is that the traditional streams have eroded in both quantity and quality of workmanship.

Second reality is that there is a huge demand for domestic help. Farm after farm reports that they simply cannot find people to fill necessary positions in their operations. In many cases the labor pool is retired baby boomers more than younger ones. This shortage is opening up discussions with farms to consider writing broader responsibilities for new H2A employees in future contracts.

Generally, across the area, the shortages are not only on farms or packing house operations. Reports are common from all types of enterprises that they simply cannot source enough skilled

Paul Baker,
Executive Director
NYSHS

or entry level workers to meet their needs. Job opportunities exceed willing applicants. You may notice I said applicants not people. The reality is that too many US workers find life quite comfortable “collecting” rather than accepting a full-time job.

Generation Z, those born after 1998, are now entering the workforce. They make up 25% of our population. Studies have consistently stated that 62% of these anticipate a severe challenge to work with or for a Baby Boomer. Most of our farms and packing houses are currently managed by Baby Boomers! They will work for the millennials (those born 1980 to 2000)

at a higher rate This new generation of workers simply has little if any desire to work on a farm or in a packing house. Large milk processing plants cannot find enough help as they find this new generation will not conform to production rules. One being that no cell phones are allowed on the production floor during operation hours. Traditionally farms and packing house jobs have been a frequent place for entry level new employees to begin their careers. It seems in today’s market this is not the case.

One Congressman I talked to recently stated that he has grave concerns when the Baby Boomers finally exit the job market. He said the sad truth is most must work because their social security and pensions are not sufficient to cover their living costs.

The dilemma, as I see it, is that modern US agriculture is heading towards being 100% dependent on the federal governm

ent to not either remove the H2A programs or make them so expensive that farms can no longer do labor intensive crops. Between State and Federal legislation on labor we may see it impossible to farm in New York State. One simple reality is already playing out. Simply raising the minimum wages does nothing to increasing the willingness of new workers to look to our operations for employment.

If you ever wondered if you need to be involved in all of these debates over labor rules and compliance, I ask you to tell me where you see your workforce coming in the very near future.

Be Careful What You Wish For

In the last two issues of the Fruit Grower News the cover page has lead titles of “Labor Pains” and “Helping Hands.” In each month, the number one topic of concern is not over production but who will harvest this production. As the borders to the south become less porous and the birth rates in nations below the Rio Grande approach those equal to our own we are seeing less help appearing at our farms from north to south. Reality is hitting home that to meet the human resource needs of agriculture there is one route, H2A.

Many of the farms here in NYS have a long history of usage of this program. Many more are feeling the shortages and looking for the first time at a program they vowed openly to avoid. Their perception is correct about the shortages. In 2011 when we had 77,260 H2A workers in this country. In 2016 that number rose to 165,741. This works out to a 215% increase in 5 years. Everyone feels that 2017 will be higher still.  Companies are moving to this program simply because they have no certainty under the traditional models that they can fill their needs.

I think an important reality for those of you in the fruit business is that only 6% of this number will be picking apples. That means almost every type of agriculture, from every geographic region, will be drawing on this program. It is actually amazing that the current USDA staffs have been able to keep up as well as they have, given the many federal freezes on hiring of new employees.

I have heard for decades farmers complain about the program. Is it perfect? Is it at times too slow? Does it cost you more than your traditional hiring?  The answers to each of these questions is yes of course. I contend that until we find a collective national voice to give us the necessary guest worker system that we best try to work within this model. Imagine if those politicians we have been complaining to for decades about this program decided to drop it? Be careful what you wish for.

Time To Act

Most of you will not read what I am about to write for a month or more. That is not that important except for the fact it will be approaching Spring and the time to make very definite plans on your source of labor for 2017 is approaching. The status of labor supply under the Trump Presidency remains uncertain at best. As a producer in New York we must decide if we are entering the race against Mother Nature to produce a new crop before the realities of winter in New York end our growing season. We are not California and blessed with a very long, extended season of growing opportunities. We get one shot each year to produce one crop.

Paul Baker

If you have any intentions of entering the H2A program for the first time I would contend that the hour of decision is upon you. Very quickly the time needed to prepare for this will have come and past by you. Unfortunately, we do not have an “overnight” order plan for you to participate in. Each operation is unique. Each farm must assess the risk it is taking in this quest to source the needed labor for their operations success.

For this discussion, let us not consider what may happen in Albany before their legislative session ends in June. Today lets you and I play “immigration roulette.”  If you are going to remain static and continue as in the past you need to be aware of the risks you are assuming. How confident is your belief that come that critical hour you will have the necessary hands needed to harvest that singular crop in 2017?

I receive, on average, at least one call a day from a producer telling me of his issues with ICE or Border Patrol. This is up over previous years. Most calls have a repeating story line. It goes like this:  One or more of your employees were stopped for some legal reason, speeding, license violation, whatever. They were not taken while at your place of business. In many cases the story is the same. These are people who have worked with you for multiple years. They have families and you count on them. However, when their records are checked against an E-Verify microscope they are revealed to be holding improper identification. If later released and you are made aware of this truth the burden falls upon you. It is a felony for your employee to present false documents for employment. If you continue to employ this worker, you are waiving your immunity and now you will face a very stiff fine, perhaps even being charged with a felony yourself. I see a rise in this type of intervention. Until we have a new policy of record we will see a renewed surveillance of people as to their legality. This becomes a virtual “northern wall.”

You can have your workforce checked for status today. If you feel certain they are legal I would consider doing this. My caution to you is be prepared to accept the results. You may find that long standing key employees that have been with you for years have no legal status. Your larger harvest crews may be cut in half. The reality is if you do have them checked you will most likely scare 100% of them away.  Those found to be holding bad paper will no longer be able to work for you.  If they do, you place your business in definite financial risks. You have no legal excuse for employing these employees.

Many people may feel I am advocating for the H2A program. I am not. I am advocating that you protect your own interests with logic and not emotion. Every one of us who has employed people on our operations has a respect and loyalty to them. We count on them as do they upon you. The sad truth is that the law does not have a statute of forgiveness for being here illegally. I doubt any nation has one. Each year the economic reality is we basically play “immigration roulette” with our help when we do not know their true legal status. If they fail this test then you may be leaving your entire year’s work out in the fields. Most farms cannot afford such a reality. So you have to ask yourself, as Dirty Harry said in the movie, “Do you feel lucky?”

Paul Baker NYSHS Executive Director 3568 Saunders Settlement Rd., Sanborn, NY 14132 FAX: (716) 219-4089  |  Cell: (716) 807-6827 E-Mail: pbaker.hort@roadrunner.com

 

Winter of Many Changes

By Paul Baker, NYSHS Executive Director

For many of you, this winter will be very demanding. The stress of unprecedented low rainfall and less than exciting returns has left many of you frustrated. In my experience, I have found such years the ones that demand you to be at your very best. When the markets are at their most demanding it is time to tighten your management skills.

Labor last year was, in my observation, at its most stressed level. I do not know one single operation that reported having to turn away labor. The exact opposite was the case. If operations were not in the H2A program then each morning they were waiting for the arrival of a very uncertain workforce. Workers were in high demand and they took full advantage of the opportunity. Shortages at key times in harvest were a huge reason why many apples were picked too late. The low resulting pressures have led to low returns this winter.

Farms of all types are looking at H2A for the first time. This is happening across the nation. Washington, California, Georgia, Michigan and Florida, the largest user of this system are increasing the usage of this program. It will be interesting to see if the bottle neck in Chicago will be staffed to handle this increase. If you are intending to use this program, you need to begin today and take full advantage of the time you are allowed to complete the multiple steps. Expect delays as Chicago simply does not have the manpower to make this a quick and easy turn around.

If this were not enough for you to be concerned about you need not look any further than to your state capital in Albany, NY. Earlier in the month my board (NYSHS) was in Albany and we learned of a bill S=2721 introduced by a freshman Senator from Manhattan. Senator Alcantara has introduced the most demanding bill in my memory for reform of farm Labor in New York State. This bill has all of the previous requests for collective bargaining, days of rest and more. In the past years such bills have reached out for overtime after 10 hours per day and after 60 hours per week for farm employees. This bill is asking for overtime after 8 hours each day and 40 hours per week. Needless to say this would be the most aggressive farm labor program in US history if passed by the State.

In talking with the Governor’s office they say “do not be too worried about this.” I find such a bill quite a worry and one we need to gear up to confront. We must present reasons why such a bill would do enormous long term damage to not only the farming industry but the entire Up State economy.

I went into Senator Alcantara’s office to discuss this bill. I met with her chief of staff. I asked what was the underlying reason for her pressing his bill? The answer was that she had heard that there were many Spanish workers in Up State New York that were not being treated and paid fairly. She herself is of Spanish origin so this was her way of reaching out to protect them. I asked if she has actually ever had a discussion with any of these workers. The answer was she had not personally ever met or talked to any. This type of emotional agenda is extremely dangerous. If passed, I need not explain what it would do to your operations and employees.

I leave you with the reality that despite low returns each of you must discover how to do a better job in 2017. If labor is tight this may be the year to remove marginal orchards. You must be creative in managing and sourcing your employee recruitment. Many of you have wished to remain politically silent.  I suggest that with the new Trump administration and what potentially could come out of Albany you simply must voice your concerns. To not do so is to offer power to those who do not have the most understanding of your operations.