Hearing at Morrisville SUNY on Farm Labor

Thank you for the opportunity to present some objective observations from my position as the Executive Director of NYS Horticultural Society during the last ten years. For 40 years earlier I was the owner operator of Baker Farms in Niagara County. This was a fruit and vegetable fresh operation. My observations then come from two different perspectives. I have real world farm “boots on the ground” and organizational experiences.

I applaud the efforts to have multiple hearings so that every side of this discussion may be uncovered.

Paul Baker,
Executive Director
NYSHS

In my opinion, the Senate and Assembly bills we are here to discuss have long lasting implications for all of New York State agriculture and the entire up state economy. In short we need to get this right!

To begin, I am certain that everyone here has the most sincere intentions to make certain all farm workers are given every protection under the law. Farming is different from almost any other occupation. It requires total dedication to your craft. Traditional norms often do not apply. Societies have attempted and failed, such as in the Communist models, to remove the farm from the owner. In my opinion, farming is in many ways similar to being a parent.  Just as when your child has a need, you address it with no regards to time. When a crop needs to be harvested or a herd needs to be milked it has to be addressed. Farming seldom can be slotted in an 8 hour or 40 hour time slot.

When you select agriculture as your career path you accept certain realities. Just as one accepts if you are a doctor you cannot dictate when your expectant mother will deliver her child.

Agriculture, unlike public government is dependent on producing products that will meet public demand. Each farm must produce and market within the economics of the supply and demand chains. Unlike State Government that can dictate annual increases in minimum wage. Agriculture pricing is a product of world and national supplies. Buyers will seek the highest quality for the lowest price. Always have and always will. Our grocery stores will never be void of the highest quality produce and food products. The sad truth is that if New York fails to produce one gallon of milk or one bushel of apples our local shelves will remain 100% stocked.

It is this reality that brings me to my question for this body. What is the desired end best result from this legislation? It will not serve any farm worker if we create legislation that does not allow agriculture to remain competitive in this food marketing supply chain.  If farms cannot meet payrolls they will be forced to close or dramatically alter their product choices. They will be forced to downsize, move away from labor intensive agriculture or close. In each of these examples it does not offer greater opportunities for farm employees.

We have the opportunity to calmly explore numerous options beyond the current language in the  Senate and Assembly bills. I honestly feel that the final wording of these Bills can be drafted that will allow NYS Agriculture to remain a leader in production. It also can find ways to mutually protect both the employer and employee from unfair labor practices. No one wins if the final legislation is not forward thinking in ways to see Agriculture continue in New York State.

I am encouraged that we are having these hearings. I pray for cool heads. I know that farm workers are some of the hardest and most talented workers. All of New York Agriculture is united in finding ways to protect and reward farm employees. To use an old saying we must be very careful in drafting this legislation so that we do not “throw the baby out with the bath water!”

Thank you for the opportunity to address this hearing.

 

 

Hearing on Senate Bill 2837 Suffolk County Legislature April 26, 2019

Mindset of Agriculture Today While we Await the Outcome of Senate 2837

Paul Baker,
Executive Director
NYSHS

I thought it might help to hear what is on the minds of Agriculture in New York today. As the Director of 3 farm boards, I receive, on a daily basis, calls from farms asking me to project the outcome of this legislation. Nature does not allow these farms to set everything on the back burner and await the final outcome. They must make real world decisions today that may or may not really be in their best interest depending on this piece of legislation. Here are a few of those decisions/questions;

  • Should I put my farm up for sale today before this Bill becomes a reality? There is little question that land values will take a dip if this Bill passes.  I know of large farms that have in fact sold or have placed their farms up for sale before land values fall.
  • What about investing in new land, equipment, storages, employee housing both new and improved are just a few of the questions that are on hold.
  • Should I return my seed/trees for a credit or plant it? I am unsure if I will be able to afford the labor cost later this year.
  • I actually have dairy farms that are slaughtering new calves because they cannot afford to feed them under current economics. Just meeting current bills is an impossible task. If this Bill passes as currently drafted they see no path forward.
  • Estate planning? How do we plan for tomorrow not knowing if we can survive the future costs here in New York? Young farmers are looking to other careers.
  • How do I craft contracts for 2019 if I cannot project my labor costs?
  • Time to lock in on seasonal recruitment of my labor for 2019. Can I sign a work order if I do not know the terms for myself or my employees? H2A agreements need to be crafted and advertised. If I limit my men to 40 hours will I be able to attract my experienced labor to my farm?

Most every farm at this date is locked into the 2019 crop. They are very uncertain as to the rules of employment and what this will mean for their operations. Nature will not wait. Crops need to be set in a timely basis to meet harvest before the frost of winter arrives. Overhead dictates farms must move forward. The costs of not doing so would be equally damaging.

I understand that we need to ensure that every employee is protected under the rules of fair labor. I see this discussion having huge long term effects on the state economy.  We are in the midst of annual minimum wage increases here in New York.  Due to the chronic lack of New Yorkers who will work on farms we must recruit from outside our state borders and often from outside our national borders. In order to manage our farms the reality is we must attract workers to our State. Farms, out of necessity, are using the federal program H2a.

Farms this year will have no choice but to accept the final language of this legislation for crop year 2019. The real impact will come as soon as crop year 2020. Once the true cost of labor is known, farms will drastically shift into new farming practices. If they see that they cannot pass on the new labor costs they will lose their markets. Traditional crops will have to be reassessed as to their feasibility. In short, agriculture will have no choice but to take on a whole new look. Only time will tell if this look is good for both farms and their employees.

 

Farm Worker Hearings Schedule is Now Set

We now have confirmation that the New York State Horticulture Society will be on the short list to offer oral presentation at the Farm Worker Hearings. The list of hearings will be as follows;

April 25, 2019             SUNY Morrisville, NY

April 26, 2019             Suffolk County Legislature, Smithtown, NY

May 2, 2019                SUNY Sullivan, NY

We will submit a written report. Second, we will then give an oral report on our concerns. This will offer a

Paul Baker,
Executive Director
NYSHS

Q &A. The plan is to offer equal presentations offering balanced time for each side of the debate.

In preparation for these three hearings, I encourage you to submit your own version of how you see this Bill impacting your operation should it move from Bill to Law. Also attempt to offer examples of what has happened when you have tried to curtail hours on your farm. Please send these ideas to our office. I will be offering 3 reports. I wish to offer 3 separate reports that will help report your views. It is very important you participate in this process. Either email or call me to offer your opinions.

I can be reached at the following:

Paul Baker

716-807-6827 (cell)

pbaker.hort@roadrunner.com

or

NYSHS@hotmail.com

 

 

 

So, What is Happening as Far as Overtime?

The wheels of Democracy are moving. Exactly where they will stop is the question. As a grower you must be filled with more questions than answers on this legislative activity. I will try to bring you up to speed. I must tell you that at this time it is totally up in the air as to which way it will end.

To begin, we have two basically identical bills in play. Senate Bill 2877 sponsored by Senator Ramos from the Queens. She is a freshman Democrat. The key issues to her bill are the following; Overtime after 8 hours each day and overtime after 40 hours in a week; Collective bargaining; Mandatory day of rest each week. The Assembly has a very similar Bill 2750 carried by Assemblywoman Nolan, Democrat, from Queens. In the next couple months the plan is to have several hearings across the State to review and discuss these bills. At this time the specifics of when and where these events will take place are not set.

In an effort to be objective I think the authors of these bills most likely have good intensions. The issue is they have very incomplete information from which to draw their conclusions. It is our intention that we will be able to bring both sides to a clear understanding of the facts. I will tell you it is currently very difficult as there has been very little effort thus far to understand the conditions on a modern farm in New York State by the two authors of these Bills.

According to a 2019 report from Farm Credit East, mandatory overtime would increase labor costs on farms by almost $300 million and decrease net farm income by almost 25%. Net farm income is down 50% from a few years ago and farmers have little to no control over the prices they receive for the products they offer for market.

Farm workers have repeatedly stressed to farmers that the number of hours available to work weigh

Paul Baker,
Executive Director
NYSHS

heavily in their decision to work on a particular farm.  If a farm must reduce hours to fall under the overtime threshold, it would most likely force existing workers to look elsewhere for a job making a tight labor market even more stressed.

Collective bargaining has long been a grave concern for farms. The reality is that this is not such a threat so long as we can have a “No Strike” clause added. Currently there is none in either Bill. The mandatory day of rest needs to be amended to read “voluntary” day of rest. During peak harvest times neither farmers nor farm workers wish to be forced to sit.

What can you do? As the announcements become known, you need to voice your individual story as to how this Bill would impact your farm. If possible, have your employees offer their voice as to how they feel about the impact of this Bill on their lives. If you can take the time to offer testimony, do so. If not, submit written accounts of this Bill on your future. If the opportunity presents itself, be present to show solidarity to this issue. I cannot stress enough the best time to deal with a Bill is before it gets passed and signed into law. We need to stop or dramatically force changes to this Bill in the Senate and Assembly. Once it passes both chambers most feel there is little doubt the Governor will sign it.

Everyone wishes we were not faced with this challenge. The 8 hour per day and 40 hour per week version will, if passed, dramatically alter New York agriculture. We simply will not be able to meet national prices. As much as you may not like it, some form of overtime will very likely be in play. We need to get these numbers at a level we can still hire labor and remain competitive in the market place.

The details of this bill will have enormous implications on New York State agriculture and the up-state economy. It will serve no one to complain later if we do not make every effort to meet the challenges of this bill head on.

Overtime?

I think it is time we take a look at OVERTIME. We hear so much about what a great opportunity it can be for employees. Likewise, we hear almost every employer held in fear of what it will do to their profitability. So, as in most things, the truth lies somewhere in the middle.

In modern times, overtime became a tool during FDR. The nation was struggling to survive in a world depression. The bread lines were enormous. People were desperate to find any work. No one was demanding to receive overtime. So why would FDR impose overtime on employers who were struggling to survive. The President saw that he needed to somehow get more people to have a job. He felt that if he imposed time and half after 40 hours he would encourage employers to look to employ new faces to fill those hours at the initial pay rate. In short, he was not trying to giv

Paul Baker,
Executive Director
NYSHS

e employees a benefit for working longer. Rather he was trying to get new faces off the breadlines.

Today most all hourly workers have overtime in their portfolio. My question is, what does it really do for them but limit their ability to earn beyond 40 hours? I realize I grew up on a farm. We did not ever discuss our hours or overtime. I also recall being the sole provider for my young family. I was very grateful that I was not limited to 40 hours. It would have dramatically reduced my income potential. So my question for legislators that are concerned about helping the life of hourly employees, is overtime hurting or helping? Thinking outside of the box I could argue that legislators could make the case that they should increase the overtime cap from 40 to 50. This would make it much easier for those workers to support their families if they could simply remain on their primary job longer. To find a second job is very difficult and almost always for a lower hourly wage. I know this is not a current idea but I challenge people to find the flaw in what I am asking.

Agriculture is different. This is a subject that I feel needs to be discussed but on a national stage. My challenge is that before we attack the system in agriculture we take a long creative look at how we might make New York a much better place to work and raise a family. This move alone would encourage new growth in business and attract business to New York State. That would really be a refreshing change.

 

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.

 

Ways to Reduce Your Labor in 2019

Everyone who is managing a commercial apple orchard in New York State is concerned with whether they will have enough labor to harvest the new crop. I operated my family farm for over 30 years. Too often I was guilty of the concepts I will challenge you with. I know that what I am suggesting is not easy, but it may be the difference between you just surviving and seeing a profit.

To begin let me pose a question to you. Are you managing orchards that are productive but not profitable? Have the markets shifted away from these blocks? Will these blocks struggle to break even? If this is the case than you need to ask yourself why you are continuing to operate these blocks. Bushels alone do not guarantee profit. If those bushels have to be sold at a discount to move them are they doing you any good? Have newer strains found shelf space in their place? Am I having to house extra men to harvest these apples? Am I mowing, fertilizing, spraying and pruning these blocks often times more in an effort to meet color requirements? More than 100 apple varieties are grown commercially in the United States. Fifteen of those varieties represent 90% of the production.

Paul Baker,
Executive Director
NYSHS

Most of agriculture’s history enjoyed the fact that if you were able to grow a crop you could find a use for it. Distribution systems were such that you could find a “profitable” utilization for your efforts. In essence, if you grew it there would be a consumer waiting for it. Those days are gone here and globally. Today we need to farm from the shopping cart to our farm gate. They decide if they want your product. They have more choices than demand for each product. They are no longer in a consumer position to accept marginal quality.

Recently it was announced that the Gala variety has replaced the Red Delicious (dates back to 1870) as the most popular variety. Long standing varieties such as the Macintosh, that was discovered in 1811, and the Cortland, that was discovered around 1900, are understandably under great consumer challenge. Newer varieties have arrived. Consumers have diversity today in the market place. As they review and cast their vote at the checkout counters we need to take notice. They are sending us clear messages as to what they prefer. If we ignore this then we should not be surprised when our sales for older varieties decline.

I am not suggesting that any one variety is no longer profitable. I am asking each of you to evaluate your particular marketing program and react to those trends. At one time in my farm history I grew profitably over 100 acres of pears. The markets I was associated with made this a profitable venture. In the last years I was managing my farm it all changed. I was investing in removal of pears in favor of other newer apple varieties. What was once a sound program had shifted due to consumer buying trends.  As I alluded to earlier, I was guilty of holding on too long as well.

In conclusion, before you expand your housing take a good look at what you are needing to harvest. If you are gearing up to harvest crops that are productive but not profitable you need to step back. We all need to shift to meet consumer demands. The entire globe is eating better. Consumers everywhere have a higher income that allows them to select what they will eat. Be certain you are striving to match those trends.

 

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.