Farms Find Value in Foreign Labor, But at What Costs?

American agriculture is withering due to a severe shortage of workers, says John Boelts, a Yuma, Arizona, farmer and president of the Arizona Farm Bureau.

"We do not have the workers. We simply don't have the workers. American agriculture is withering on the vine due to a lack of workers," Boelts says.

For years, farm groups have sought to legalize roughly 1 million undocumented farmworkers and reform the 40-year-old H-2A guest worker program, a process many describe as expensive, complicated and out of step with modern farm needs.

"Congress has artificially controlled our ability to legally hire," Boelts says. "We have to go through the H-2A program, which is literally a program designed in 1986 by labor unions not to work. It was designed to be very expensive and to protect the American worker. So, it doesn't really work for American agriculture, but it's all we got until there's something better."

Farmers nationally employ about 1.2 million workers overall, and it has been estimated that anywhere from 50 to 70% of those workers are undocumented or using false documents. About 90% of all farmworkers come from Mexico.

Where Boelts farms near the Mexican border, H-2A workers make up about 8,000 farm laborers out of an agricultural workforce of close to 50,000. There are another 12,000 to 15,000 workers who cross the border daily from Mexico to work on area farms, he says.

Yet, more farmers each year find themselves forced to turn to H-2A workers.

For many American farms, learning the rites of passage of the H-2A program has become one of their only means for ensuring they have reliable, legal workers. Despite a laundry list of complications and problems -- such as more than 3,000 pages of new regulations under the Biden administration -- even smaller farmers are relying on the H-2A program to fill their labor needs.

FARMS FIND VALUE IN FOREIGN LABOR

Steve Bowlin tells the story about how his farm began marketing fruits and vegetables outside of Olathe, Kansas, 15 years ago.

"This whole thing started because we had too much in the garden one year," Bowlin says. "We found out quickly that the desire for fresh local produce is on the rise."

Bowlin's farm grows watermelons, cucumbers, pumpkins and tomatoes, as well as hanging baskets for local stores and other retailers as part of The Kansas City Food Hub.

Age, however, eventually led Bowlin to look for professional labor to help his farm four years ago. He's had two H-2A guest workers from Mexico ever since. "I'm 68, and the rest of my crew was older, and we couldn't find any kids who wanted to work or could work. Kids just don't have the work ethic these two have. If we were going to continue to grow, we had to bring in some workers."

Bowlin works with a law firm out of Tulsa, Oklahoma, that helps farmers navigate the H-2A program.

There can be language barriers, but Bowlin describes how his workers have taught him a thing or two about being more productive. In a greenhouse this year, Bowlin changed to growing cucumbers vertically on wires. "They do it that way in Mexico, and they showed us some pictures, and they [cucumbers] come out straight as an arrow," Bowlin says. "These guys bring knowledge to the table. We are learning from them every day."

Like a lot of farmers, Bowlin is thrilled with the workers themselves, but the cost of the H-2A program is catching up with him.

"If it wasn't for them [H-2A workers], we'd be in deep trouble, but they are about to price me out of the market -- the government is," Bowlin says.

CONTRACTORS HELP NAVIGATE MYRIAD RULES

H-2A places a lot of demand on farm employers. They are required to provide transportation for workers to get their visas. For most Mexican workers, that means a trip to the U.S. consulate's office in Monterey, Mexico. Farmers must provide housing that is approved by state inspectors. Employers also must provide transportation to and from the housing to the worksite.

"And, you've got to provide the housing, whether they're using it or not," Boelts says. "Here in Yuma, there's housing all over the place that's provided. And, guys go, 'I'm gonna live in Mexico and cross everyday anyways, even though I'm in the H-2A program.'"

Sarah Black is general manager of Great Lakes Ag Labor Services LLC, a company started as a pilot project by the Michigan Farm Bureau in 2014 to help its members navigate the H-2A program. Great Lakes Ag Labor now works with more than 100 farmers in Indiana, Michigan, Ohio, Texas and Wisconsin, partnering with the state Farm Bureau offices. Black says the company will bring in 2,600 workers this year.

"We basically started from the ground up," Black says. "A few of our farms at the time were using H-2A, but a lot of members thought it was complicated, and it could be fraught with litigation if you don't do it right. It's so complicated," Black continues, "and you can unintentionally do something or not do something, and not have any idea that is going to get you into trouble. The opportunities for them to come and find something wrong is not too hard if you don't work with someone you trust."

There are different models for H-2A contractors. Great Lakes works on the paperwork side, doing all the filing for a farm and recruiting the workers. The company ensures workers have appointments for visas at a consulate and makes travel arrangements for the workers to arrive in the U.S.

"We do everything on the front end," Black says. "But, then, when the worker arrives at the farm, they are the employee of the farmer, and so that farmer has control over the schedule and the day-to-day management. That's our model."

Initially, it was larger produce farms that used Great Lakes for finding workers at harvest. Over time, the profile of farms using the services has evolved, Black explains.

"What really has changed now is all kinds of farms use H-2A. Ten or 15 years ago, if you asked about H-2A, it was for the specialty guys who hand-pick fruits and vegetables. That's no longer the case. There is every type of walk or make of farm that is using the program," Black says.

Great Lakes even works to bring in workers for livestock, poultry and dairy farms that can't use it in the same way that other farmers do because of the restriction of seasonal or temporary.

"We've got dairy farm clients who are bringing in South Africans for equipment operations because they can't hire people domestically to help plant or haul manure, and do [other] things. So, what has changed in the last five years is the labor pool has dwindled everywhere in agriculture, and all farms are using the program and have a need for it more so than maybe they did 15 or 20 years ago."

Black adds, "It's a big decision to get into H-2A. It's not something you want to do lightheartedly without really thinking through it."

H-2A CREATES WAGE PRESSURES

Ask any farmer who brings in H-2A workers, and they will tell you they do not understand how the U.S. Department of Labor comes up with the Adverse Effect Wage Rate (AEWR). Based on data provided by the USDA farm labor survey, the Department of Labor calculates a new AEWR every year.

In Kansas, Bowlin and other farmers are required to pay $19.21 an hour under the H-2A program. That's $3.42 more per hour than farmers are required to pay for the same work in Oklahoma or Texas. Kansas, surprisingly, ranks among the more expensive states on the H-2A pay scale.

"I don't know any farmers around here paying $19.21 an hour and providing a place to live, and providing workers' comp, too," Bowlin says.

AEWR got more complicated in 2019 when the Biden administration set multiple different wage rates based on job classifications for the workers. That change pressed farm groups to demand more reforms to the program, because it started aggressively pricing farmers out of the program.

"That's opened up a lot of challenges on the ground and increased wages on the ground. So, it's both a question of cost and a question of complexity," says Kristi Boswell, a consultant with the law firm Alston and Bird. A former lobbyist for the American Farm Bureau Federation, Boswell worked on agricultural labor as a USDA adviser during the first Trump administration.

"We already have farms consolidating or going out of business because they can't access labor. The cost of H-2A is driving farms out of business as much as anything right now," she says.

Frank Gieringer runs a u-pick-'em farm operation, Gieringer's Family Farm, outside of Edgerton, Kansas. The Gieringer farm is known for its strawberries, but the operation also keeps adding to its agritourism aspects. Gieringer has four H-2A workers, and he also credits their work ethic.

"They know exactly what we need to do. They start on their own. They are never late for work. In the four years we've had them, we've had one employee take a day off because he was sick. They work every day. It's a great opportunity for them. They can make more in a day than they can in a week or more in Mexico. They don't have a lot of opportunities at home."

Still, Gieringer also questions whether H-2A will continue to be a viable option for finding workers. "We have one of the lower costs of living here. I just don't understand it. This isn't going to be sustainable if it keeps going up year after year," Gieringer says of the AEWR. "We like the [H-2A] program but not some of the headaches that go along with it."

Bowlin also likes the productivity he gets from his two guest workers, and he wants to continue with the program as long as it is practical.

"We're already planning for next year and beyond as long as I can afford it," Bowlin says. "As long as I can afford them, I'm not going to lose them. I think H-2A is a very good program, but I do think it needs to be tweaked a little bit. As produce farmers, we don't have any safety nets on our crops like the corn, the bean and wheat farmers. You can't afford crop insurance on produce."

As reliance on H-2A guest workers has surged from 200,000 to nearly 385,000 since 2017, U.S. agricultural imports also have climbed from $125 million to $213 million annually -- putting new pressure on domestic farmers already facing labor and wage challenges.

Boelts says imports are particularly hurting specialty crop farmers in states such as California, Oregon and Washington, which also have some of the highest wage standards under the H-2A program. Those states are "canaries in the coal mine" when it comes to the impacts of high labor costs with H-2A.

"A lot of the products they grow are really coveted, but they are competing against a growing volume of foreign imports," Boelts says. "And, they are just getting their asses kicked."

He adds that farmers in Arizona are competing against produce farms in Mexico that are bringing in cheaper workers from other Central American countries.

"So, whether it's folks in California or here in Arizona, you have a high cost of production compared to Mexico, and you're competing with Mexico dollar for dollar in the store," Boelts says.

WHAT'S NEXT

President Donald Trump made it clear when he came into office that his administration was going to focus aggressively on border security. He has made good on that promise and has ramped up deportations.

At the same time, Trump also has opened the door for reforming agricultural labor policies. In April, Trump suggested that a new program will be set up to help legalize farmworkers and reduce the risk of farmers losing undocumented workers to mass deportations.

"We're also going to work with our farmers, so if they have strong recommendations for their farms, for certain people, we're going to let them stay in for awhile and work with farmers, and come back and go through a process, a legal process," Trump said at a Cabinet meeting.

Trump added, "We have to take care of our farmers, the hotels, and you know, various, various places where they need the people."

Boelts points to Trump's comments about farmworkers "touching base" and coming back to work as ideally an opportunity for Congress to push ahead on a farm labor bill.

"Agriculture has been talking about it a little more vocally the last 10 years that there are several million people in this country documentally challenged, and the food that goes on the table every day is dependent on it, whether it be in the dairy sector or fresh fruits and vegetables."

AVOID GUEST WORKER PITFALLS:

Farmers are often surprised by the time commitments, costs and rules for hiring H-2A guest workers.

Here are a few things you need to know when deciding whether to bring in guest workers.

PLAN AHEAD FOR NEXT YEAR

If you think you need help next year, start mapping out your H-2A plan now. The avalanche of requirements is complicated, overlapping and time sensitive.

Farmers need to start working with an H-2A contractor at least four months ahead of when workers are needed. Realistically, thinking at least six months out would help. Requests for workers should be filed with the state Department of Labor office at least 75 days before workers are needed.

Farmers then need to document their efforts to hire domestic workers, which includes accepting labor referrals from state workforce development agencies.

"A lot of farmers, if they haven't looked into the program, think it's like, 'Hey, I can pick up a phone like I do for another service provider and get some guys in here in a couple weeks.' That's not how it works," says Sarah Black, general manager of Great Lakes Ag Labor Services LLC.

Worker applications are sent to the U.S. Department of Labor, but they then must go to the Department of Homeland Security, as well. Then, the paperwork is sent to the U.S. State Department to coordinate a time for a visa interview at the consulate. It's a very time-specific process, and paperwork must be completed within a window, or farmers won't get their workers on time. In some cases, farms have had to start the paperwork process over to get workers.

While more than 90% of guest workers come from Mexico, getting visas approved in Mexico has slowed down because the secretary of state closed H-2 visa operations in Mexico City and Guadalajara, Mexico, pushing all that work to the consulate's office in Monterey, Mexico.

Farmers will pay the costs to send potential guest workers to Monterey for interviews. Getting a visa application approved can take three working days after the interview. If a potential worker's consulate interview is on a Friday, the farmer is paying to put up that visa applicant in a hotel in Monterey until potentially the next Wednesday to receive their visa.

"We've had several instances where we needed to schedule workers, and there were zero appointments available nationwide. And, we're just one small company, so I think they [the State Department] have to figure out how to make that work," Black says.

LABOR NEEDS DICTATE HOW YOU CONTRACT

There are also different models for bringing in workers. A small strawberry farm, for instance, may only need a handful of workers for a month to help with harvest. A farm labor contractor would already have a crew of workers and take care of the housing, payroll and day-to-day management of that crew, and minimize the paperwork needs for the farm.

If a farm needs workers for a full 10 months, though, a farm labor contractor is going to be more expensive, because a farmer would be paying that labor contractor a fee as part of the hourly rate for every payroll. Those fees add up fast.

HOUSING COULD BE A STUMBLING BLOCK

Farmers looking to hire their own H-2A workers must ensure they have housing that will be licensed and inspected by their state labor regulators. Generally, an apartment lease will work, but it still must be inspected.

A lot of rural areas, however, simply don't have good housing options. Farmers who also have constructed housing for their workers have been caught off guard by updated regulations in the program. Make sure you know the current requirements.

John Boelts, president of the Arizona Farm Bureau, says the housing rules can be the "straw that broke the camel's back" for some small farms trying to bring in H-2A workers, especially if the farm builds out housing only to be told it doesn't meet the rules.

"I used to joke with people that if you stayed at the Waldorf Astoria in New York City, it would not cut muster for H-2A housing, because there's no trash can in every room like H-2A housing was requiring at that time," Boelts says.

Black explains that housing should be the first thing a farmer thinks about before moving ahead to sign up for H-2A workers.

"How are you going to deal with the housing? That's the first stumbling block of H-2A is you have to get housing in order," she says.

WHAT DOES THAT MEAN FOR THE REST OF YOUR EMPLOYEES?

H-2A was initially set up to supplement a farm's workforce if they could not find local workers. So, the Department of Labor requires all workers on the farm to have the same benefits provided to guest workers in a country. Essentially, any benefit offered to an H-2A worker must be offered to a domestic worker on a farm, as well. That also may mean understanding how much the farm will have to pay people for certain labor done by domestic workers based on the wages H-2A workers receive. The rules also require farmers to ensure everyone is covered under a workers' compensation policy.

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