Fed’s H-2A labor costs leave N.C. farmers struggling to compete
- N.C. farmers question paying $14.16 an hour in the H-2A program compared to $12 an hour in neighboring South Carolina.
- Rates are set by the USDA through state groupings and yearly surveys.
- Possibly methodology changes to the program by the Biden Administration have many concerned about rising program costs.
Concerns about costs of farm labor program grow in N.C.
Ron Cottle, the owner of Cottle Strawberry Nursey, Inc., Faison, N.C.,has seen the effects of inflation like every farmer across the U.S. this year. “It’s not even bad, it’s just terrible,” he told Carolina Journal. “Any material that we have had to purchase, 20% to 30% up on clamshells boxes, fertilizer over 100% up, fuel was crazy. Even this spring, with some of the crops bringing better pricing than last year, we still made more money last year because when you look at all of our costs with labor and everything being up, we didn’t do any better.”
Costs for labor have also increased, as Cottle mentioned, including costs associated with the H-2A Program. The program, which started in 1986, allows agricultural employers with a shortage of employees to bring nonimmigrant foreign workers to the U.S. to perform agricultural labor or services of a temporary or seasonal nature.
But farmers in North Carolina, like Cottle, who also manages and is the marketing arm for Cottle Farms, question the disparity between wages farmers in the state have to pay with the program, at $14.16 an hour compared to $12 an hour in neighboring South Carolina.
“Last year, we worked over 600,000 hours throughout the whole year,” Cottle said. “We start in February, and they (migrant workers) work till November when they go back. It was $13 an hour here last year, but it went to $14, just a dollar more, so that’s $600,000 off our bottom line. Where do we get that back from?”
Catherine Watts of Labor Services International in Henderson, told Carolina Journal it is a huge issue for southeast farmers competing with each other.
“It makes them much less competitive with their products if they’re having to pay that much more for their hourly rate,” she said.
LSI assists agricultural employers across the U.S. with the federal H-2A visa program process, including transportation and logistics for workers to come into the country. Recruitment is done through a third party.
Watts said H-2A wages are determined through a U.S. Department of Agriculture (USDA) survey. The wage must be based on the highest rate among the state minimum wage, the federal minimum wage, the prevailing wage, or the adverse effect wage, which is usually the highest. The USDA puts the survey out each year to agricultural employers. The data is then given to the Department of Labor (DOL).
Watts said there are many requirements with the H-2A program, including providing housing for workers and paying their transportation costs to the U.S., in addition to agent and attorney fees, making it a burdensome process.
The reason for the difference in wages lies with the USDA. They have broken down the country into different farm labor regions. North Carolina is grouped with Virginia in the Appalachian region. In contrast, South Carolina is grouped with Georgia and Alabama in the Southeast region, which typically has wages at the lower end.
Those in the industry say there have been complaints for decades about the wage survey and how the data has been aggregated.
Concern growing over the possible rise in costs of the program
The methodology has changed several times over the years, with the Notice of Proposed Rule Making from the DOL under the Biden Administration being the latest. Many are concerned that it is expected to be finalized by the end of the year.
“Basically, what they would like to do is segregate the duties that are done in agriculture operations and mainly with truck driving and supervisor role positions, and instead of you being able to just apply for workers all on one job order, they want you to segregate those job duties and apply for workers separately, and that can pose a massive impact, especially on smaller growers,” said Watts.
Typically, there are a variety of tasks that a farm worker can perform daily, but, with the proposed rule changes from the DOL under the Biden Administration, any time someone is driving a truck, a worker would be paid a higher rate. They would keep receiving that rate no matter what type of work they did for the rest of the year.
Industry officials say the DOL proposes to use the wage data that they utilize in the H2B program, which is the temporary worker program for non-agricultural occupations, instead of data collected by the USDA. This wage rate is usually higher than the H2A wage, sometimes as much as $5 or even $10 an hour.
“It makes us nervous about what is coming down the pipeline,” said Watts.
“The program has grown from 60,000 workers in 2012, and it might go over 300,000 this year,” said Lee Wicker, Deputy Director of the North Carolina Growers Association, the largest H-2A employer in the country. They currently have 750 farmers and 10,000 H-2A workers.
Wicker told Carolina Journal the shortage of undocumented workers is the reason for the increase in wages for H-2A workers.
“Prior to 9/11, the borders were pretty much open, and 750,000 to 1 million people were coming from Mexico every year, just walking across the border, coming in the spring to plant and cultivate the harvest for four to six months, and then go back home,” he said. “Now, it’s too dangerous and too expensive. It’s $10,000 to hire a “coyote” to sneak you across the border, and so you’re not gonna pay $10,000, work 6-7 months, make $12,000, and then go back home and do it all again next spring when you come across the border. Today, you’re coming to stay.”
Wicker said the program needs to have wage reform, possibly a national H-2A wage, with a premium of $1.50 or $2 an hour for U.S. workers, and have it extended from 10 to 12 months to keep it viable.
In a statement to Carolina Journal, Sen. Thom Tillis, R-NC, said he has long been a champion for the agriculture industry and admits the H-2A program is not a perfect solution.
“Last year, I introduced the Keep Food Local & Affordable Act of 2021 to temporarily relieve farmers’ rapidly rising input costs while maintaining worker pay and protections and allowing U.S. farmers to continue feeding American families,” he said. “I will continue working on commonsense solutions to improve the labor shortage our farmers are facing while securing our border.”