COVID-19 has shut down much of daily life, but the Earth still spins on its axis and travels around the sun. These two facts raise some important implications for how we will feed more than 7 billion humans in the months ahead.
Spring arrived in the northern hemisphere last week, courtesy of the earliest vernal equinox (the date on which the sun crosses directly above the equator) since the 19th century. Longer days and stronger solar rays mean it is time to harvest citrus in the groves of Florida, Texas and California. At the same time, grain, legume and cotton planting season is starting in the Deep South before making its annual northward trek.
Only a tiny fraction of Americans still live and work on farms. We sustain our national position as one of the world’s great food producers through an annual influx of foreign workers on temporary visas. In 2019, more than a quarter-million workers used the H-2A visa program, which allows stays in the country of up to 10 months and can be renewed for the same worker the following year, according to the agricultural trade journal Capital Press in Salem, Oregon.
The industry got a huge scare last week. The U.S. State Department announced that it was halting its processing of foreign visas in Mexico and other sites in Latin America, from which a large share of that foreign labor force originates. According to data from the State Department, U.S. farmers hired 188,262 workers from Mexico alone in the fiscal year that ended in September 2019.
If we stop processing H-2A visas, who will do the planting and picking? A delay of even a few weeks could leave American growers short of the labor they will need to cut, pick, sort and pack the grain, fruit and vegetables that will be ready to come out of the fields before Memorial Day. By midsummer, the corn and soybean harvests in the Midwest becomes a major factor in the availability and price of meat in the fall and winter to come. It will also be a critical part of the nation’s trade balance, and of China’s ability to honor its promises to step up purchases of American products to ease trade tensions. In the January trade agreement, China promised to buy $12.5 billion worth of American agriculture exports in 2020.
I suspect that concerns about the farm labor issue are one reason why the country’s southern border was not shut down at the same time the Trump administration agreed with Canada to stifle almost all noncommercial traffic across the northern frontier. The southern border may still be shut – perhaps by the time you read this. But the timing and terms of that closure will probably be influenced by growers’ concerns.
After protests from the American Farm Bureau Federation and farm labor associations, the State Department reversed course and promised to process the farm worker visas. While this is good news, to what extent visa processing actually occurs remains to be seen. It will likely be easier for prior H-2A workers to renew visas, since those workers have demonstrated their willingness to comply with the requirement to return to their home countries after their American work ends. Providing face-to-face interviews and otherwise vetting new candidates may prove harder.
The H-2A program, which has no cap on the number of visas that can be issued each year, is a source of abundant labor, but not cheap labor. The law requires the U.S. Labor Department to establish an “Adverse Effect Wage Rate” for each state participating in the program; those rates are far above the federal minimum wage and higher than even the applicable state minimum wages, according to data compiled by the Cato Institute. An employer who uses even one H-2A worker must pay the higher wage to every worker it employs, including U.S. citizens and permanent residents.
These rates have ticked steadily higher over the past two decades. Some employers, such as “custom harvesters” who follow the season northward through the Farm Belt each year to bring in crops for farmers who lack the equipment and labor to do it, have dropped out of the program as a result. They still need labor, however, and as the labor supply tightens, the price goes up.
The labor needs of American farmers may seem like a distant problem at a time when millions of Americans are losing their jobs and hundreds of millions are being told to stay in their homes. Yet we all need to eat. The march of the seasons is not going to pause for virus control, even if a large part of our economy has to do so. The government must ensure that we have the necessary workforce to grow and gather the harvest of 2020, or there will be even more problems ahead.
Posted by Larry M. Elkin, CPA, CFP®
photo by Flickr user OM-David77
COVID-19 has shut down much of daily life, but the Earth still spins on its axis and travels around the sun. These two facts raise some important implications for how we will feed more than 7 billion humans in the months ahead.
Spring arrived in the northern hemisphere last week, courtesy of the earliest vernal equinox (the date on which the sun crosses directly above the equator) since the 19th century. Longer days and stronger solar rays mean it is time to harvest citrus in the groves of Florida, Texas and California. At the same time, grain, legume and cotton planting season is starting in the Deep South before making its annual northward trek.
Only a tiny fraction of Americans still live and work on farms. We sustain our national position as one of the world’s great food producers through an annual influx of foreign workers on temporary visas. In 2019, more than a quarter-million workers used the H-2A visa program, which allows stays in the country of up to 10 months and can be renewed for the same worker the following year, according to the agricultural trade journal Capital Press in Salem, Oregon.
The industry got a huge scare last week. The U.S. State Department announced that it was halting its processing of foreign visas in Mexico and other sites in Latin America, from which a large share of that foreign labor force originates. According to data from the State Department, U.S. farmers hired 188,262 workers from Mexico alone in the fiscal year that ended in September 2019.
If we stop processing H-2A visas, who will do the planting and picking? A delay of even a few weeks could leave American growers short of the labor they will need to cut, pick, sort and pack the grain, fruit and vegetables that will be ready to come out of the fields before Memorial Day. By midsummer, the corn and soybean harvests in the Midwest becomes a major factor in the availability and price of meat in the fall and winter to come. It will also be a critical part of the nation’s trade balance, and of China’s ability to honor its promises to step up purchases of American products to ease trade tensions. In the January trade agreement, China promised to buy $12.5 billion worth of American agriculture exports in 2020.
I suspect that concerns about the farm labor issue are one reason why the country’s southern border was not shut down at the same time the Trump administration agreed with Canada to stifle almost all noncommercial traffic across the northern frontier. The southern border may still be shut – perhaps by the time you read this. But the timing and terms of that closure will probably be influenced by growers’ concerns.
After protests from the American Farm Bureau Federation and farm labor associations, the State Department reversed course and promised to process the farm worker visas. While this is good news, to what extent visa processing actually occurs remains to be seen. It will likely be easier for prior H-2A workers to renew visas, since those workers have demonstrated their willingness to comply with the requirement to return to their home countries after their American work ends. Providing face-to-face interviews and otherwise vetting new candidates may prove harder.
The H-2A program, which has no cap on the number of visas that can be issued each year, is a source of abundant labor, but not cheap labor. The law requires the U.S. Labor Department to establish an “Adverse Effect Wage Rate” for each state participating in the program; those rates are far above the federal minimum wage and higher than even the applicable state minimum wages, according to data compiled by the Cato Institute. An employer who uses even one H-2A worker must pay the higher wage to every worker it employs, including U.S. citizens and permanent residents.
These rates have ticked steadily higher over the past two decades. Some employers, such as “custom harvesters” who follow the season northward through the Farm Belt each year to bring in crops for farmers who lack the equipment and labor to do it, have dropped out of the program as a result. They still need labor, however, and as the labor supply tightens, the price goes up.
The labor needs of American farmers may seem like a distant problem at a time when millions of Americans are losing their jobs and hundreds of millions are being told to stay in their homes. Yet we all need to eat. The march of the seasons is not going to pause for virus control, even if a large part of our economy has to do so. The government must ensure that we have the necessary workforce to grow and gather the harvest of 2020, or there will be even more problems ahead.
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