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Why the AFB study claiming immigration enforcement will devastate agriculture is wrong

The American Farm Bureau has released a one-dimensional study claiming a veritable armageddon if farmers don't get all the cheap labor they want. Over the decades, farmers have become hooked on cheap foreign serf labor. Rather than kicking the habit, they constantly spread propaganda designed to get more of their "drug".

The study is part of the AFB's month-long #ifarmimmigration campaign [1], co-sponsored by the Partnership for a New American Economy (led by that well-known farmer Michael Bloomberg).

Per the AFB press release [2]:

The hardest-hit domestic food sectors under an enforcement-only scenario are fruit production, which would plummet by 30-61 percent, and vegetable production, which would decline by 15-31 percent. The study also pointed out that while many consider fruit and vegetable production the most labor-reliant sector, livestock production in the U.S. would fall by 13-27 percent.

I'll leave discussing the methodology of the study to experts in agriculture economics. Instead I'll discuss how the study is one-dimensional: it assumes that farmers and the U.S. can't adapt to having less foreign serf labor available. Someone who kicks a habit has to adjust to new ways of doing things, and the same goes with farmers.

A discussion follows this long quote from the study:

...agriculture’s link to undocumented labor is deeply rooted in the fundamentals of farm enterprise in the U.S. In short, it is no accident that undocumented workers currently account for more than half of all hired farm workers. Why?
* First, labor is farmers’ third highest expense, accounting for 17% of production costs for the sector as a whole and up to 40-50% in labor-intensive subsectors such as fruit, vegetables, and horticulture. Hence, farm businesses focus heavily on labor availability and wages in an effort to control costs and maximize profits;
* Second, the sector’s dependence on hired labor is also generally time-sensitive due to the role hired farm workers play in harvesting and marketing perishable fruit, vegetable, and horticulture products. Over the last decade, hired farm workers have also grown in importance in other subsectors, including dairy, hogs, and poultry, where larger farms have less operator and family labor to draw on and have to rely on hired labor to operate what are also time-sensitive, year-round enterprises;
* Third, farm labor needs are also concentrated geographically in states such as California, Texas, Michigan, Washington, and North Carolina, but more importantly within smaller areas within these states. Farmers’ hired labor needs in these smaller areas typically exceed the local legal work force even if legal workers were willing to do farm work. This pattern of “local” demand far exceeding the “local” supply of willing legal workers is spreading to more areas of the country and to more commodity subsectors. Hence, farm businesses typically have to look outside their immediate areas and the local labor supply in an effort to find farm workers;
* Fourth, given the limited skills required for farm work and the manual nature of the work, the majority of Americans apparently believe that they have “outgrown” farm work as reflected in their unwillingness to take farm jobs even temporarily despite being unemployed. A 2010 national survey conducted by the National Council of Agricultural Employers of H-2A employers showed that 68% of the 36,000 domestic workers state agencies referred to H-2A employers did not accept jobs offered to them. Only 5% of referred workers worked through the contract period. While the generally low wages to paid farmworkers are consistent with the low-skill nature of the work, far more Americans are willing to accept even lower minimum wage jobs rather than work in agriculture. In this setting, the local legal labor pool is not only small but unwilling to work in agriculture; and
* Fifth, while mechanization has reduced the need for hired labor sharply over time, increased farm size has boosted the need for more hired farm workers even more. The trend toward a declining number of hired workers in effect for several decades is reversing, with the number of hired farm workers stabilizing and showing small increases over the last few years. Hence, operator demand for hired workers is not likely to continue to decline and ease farmers’ concerns.

In this setting, many farm operators have turned to hiring undocumented workers in an effort to insure that they have adequate labor at critical times in their production cycles and to control costs given the abundant supply of undocumented workers available and their willingness to accept transitory, seasonal, or physically arduous work that pays introductory wages that are unattractive to the U.S.-born. Such hires have grown to account for a far larger share (50%) of the sector’s hired work force than any other sector of the economy including construction and services. This means that more and more farm operators are taking the calculated risk of employing undocumented workers and counting on not being audited or being able to use loopholes such as the 90-day grace period for firing undocumented workers identified through the E-Verify system if they are audited.

Factors Outside Agriculture…

At least three factors beyond farmers’ control have also contributed to farm employer decisions to hire undocumented workers including:

* The very limited potential for farmers to pass production cost increases—such as higher wages--along to consumers, particularly in labor-intensive subsectors such as fruits, vegetables, and horticulture where consumers are both price sensitive and lower-cost imported products are readily available. Despite multiple surveys showing U.S. consumers’ willingness to pay more for what is at least perceived as safer American product, cost appears to ultimately shape consumer purchases. Hence, the theoretical option of pushing farm wages up enough to rekindle American workers’ interest in working in agriculture is not viable since substantially higher labor costs without any offsetting increase in commodity prices and farm income would quickly put farmers out of business;
* The broken immigration system that effectively allows a large number of undocumented workers to enter/reenter the U.S. with relative ease despite more and increasingly costly border protection measures and enforcement efforts to identify and deport “undocumented workers” found within the country; and
* The potential for low-skilled workers in Mexico and Central America to make double their local minimum low-skilled wages at home by working in the U.S. This insures that a large and reliable undocumented workforce is available for farmers to draw on; and
* The extent to which farmers’ primary alternative to hiring undocumented workers—the H-2A program—is broken. Despite the growing risks involved in hiring undocumented workers, farmers’ use of the H-2A program accounted for only 10% of their hires at the highest in 2013. Both farm employers’ and worker advocates have voiced their strong dissatisfaction with the existing H-2A program. As discussed below, the H-2A program has become a costly administrative nightmare for many farmers. Farm employers cite the cumbersome nature of the program and the high wage and benefit costs that the program imposes. Worker advocates cite inadequate protection for workers, poor housing conditions, and employer failure to live up to worker payment provisions by making prompt and full payment of wages due.

1. What the study calls "fundamentals of farm enterprise" weren't fundamentals before. Instead, they represent farmers adapting to having large numbers of cheap foreign workers available to them. For instance, "larger farms" with "less operator and family labor to draw on" would not be an option without a large pool of cheap labor. If large farming companies knew they didn't have that pool, it wouldn't have made sense for them to consolidate family farms. Likewise, "exceed[ing] the local legal work force" is in some cases the result of at least food processors locating in less populous areas in order to cause cheap foreign labor to move there. A prime example is that of the Rubashkins; see the entries on the Postville page. Rather than locating in an area with a large number of lower-skilled American workers - like Chicago - the Rubashkins started their slaughterhouse in a town with about 1,400 residents. Their enterprise ended in 1998 with the Rubashkins being charged with 9000 child labor law violations. We simply can't adjust our immigration and agriculture policy to match the desires of those like the Rubashkins.

2. Regarding "[o]nly 5% of referred workers worked through the contract period", wouldn't that be higher if not for the presence of so many illegal aliens driving down wages and working conditions? Might not a reduced number of illegal aliens in the workforce raise farm wages enough that more Americans would do those jobs, with wages stabilizing somewhere between the current value and those claimed in the study?

3. The study doesn't take into account the reduced need for cheap labor that could be obtained from increased mechanization. For instance, it really wouldn't take that much to develop a machine that could sort strawberries and the like. Hasn't the ready availability of cheap labor held back not-exactly-rocket-science developments in automation?

4. Why isn't the American Farm Bureau making the case to the American public that we should Buy American? The phrase "Buy American" only appears on their site twice, and both have nothing to encouraging consumers to support American agriculture both for patriotic reasons and for reasons of safety. "Localism" is a "thing", why isn't the AFB working to make buying American food products a "thing" too?

5. The study uses the bogus talking point that the system is broken, and falsely claims that illegal immigration is out of farmers' control. In fact, farmers have consistently lobbied for illegal immigration, AgJOBS, and so on. They aren't just innocent benefactors of illegal immigration, they've actively helped bring it about rather than exploring other alternatives. See this, this, this, this, and many other entries here.

6. Note how the study is rife with support for illegal activity: "taking the calculated risk of employing undocumented workers" and using loopholes to skirt being charged with the crime of hiring illegal aliens. Isn't an industry so closely associated with massive illegal activity in dire need of alternatives?

7. In addition to automation, an alternative - something proposed here in March 2009 and even by Rush Limbaugh (1/10/14) - would be to subsidize Americans working farm jobs. Illegal alien labor is already subsidized - employers of illegal aliens aren't for instance paying to educate their children - why not subsidize Americans doing those jobs instead? If the U.S. government chipped in $4/hour for 100,000 previously-unemployed Americans working 2000 hours/year, that's just $800 million. That would be offset by decreased spending on unemployment insurance. If the 100,000 illegal aliens who they replaced left the U.S. we'd lose their consumer spending, but we'd also have increased consumer spending from those Americans who replaced them. We'd also be subsidizing Americans rather than foreign citizens, and we'd have all the other benefits that would come from reducing the number of illegal aliens in the U.S. And, we might put farmers in their place and force them to put America first for once.

For more on these issues, see immigration agriculture, crops rotting in the fields, Tom Vilsack, Mike Johanns, Department of Agriculture, Western Growers, and the many other entries here.

Want to do something about this? Tweet this post on a regular basis using the #ifarmimmigration tag. And, look up those repeating the study and make the points above to them.

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[1] www.fb . org/index.php?action=newsroom.newsclip&id=69894
[2] www.fb . org/index.php?action=newsroom.news&year=2014&file=nr0210.html

Mon, 02/10/2014 - 12:47 · Importance: 4