The Sustainability of Organic Farms Under the H2A Program: Evaluating the Program's Effects on Mitigating Farm Labor Shortages and Maintaining Business Viability

Final report for LS14-262

Project Type: Research and Education
Funds awarded in 2014: $101,096.00
Projected End Date: 02/28/2018
Region: Southern
State: Georgia
Principal Investigator:
Dr. Cesar Escalante
University of Georgia
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Project Information

Abstract:

This project assessed the effectiveness of the H2A program in mitigating shortages of seasonal farm labor and evaluated the effects of certain program restrictions and requirements on the viability of organic farms in the Southeast. This project was able to reinforce the need for further reforms in the existing guidelines, requirements, and actual implementation of the H2A program so that the employment of H2A replacement workers would help sustain the viability of farm businesses.  Recent legislative efforts, such as the H2C proposal replacing H2A that involves lower foreign labor employment costs (among others), align with this project’s goals.

 

Project Objectives:
  1. Initially, this project will determine the relative effectiveness of the H2A program in terms of filling in the farm labor supply gap among organic and conventional farmers in the Southeast. Feedback, opinions, assessments and/or suggestions on the program’s usability and benefits-costs tradeoffs will be collected from farmers that have had availed of the H2A hiring alternative.
  2. This project will also evaluate the impact of the real value (cost) of the H2A program on the organic farms’ profitability and viability as well as indirect effects on the local economy. The farm-level impact will be assessed through an analysis of labor input substitution decisions, especially considering labor sourcing and opportunity cost issues, under a farm simulation-optimization analytical framework. Various possible model scenarios that capture H2A adoption and non-adoption options as well as several iterative combinations of possible H2A cost structures will be analyzed.
  3. To disseminate this project’s results to producers, commodity groups, policy makers, and academic professionals to clarify the program’s impact on farm businesses.

 

Cooperators

Click linked name(s) to expand
  • Mohammed Ibrahim

Research

Materials and methods:

A farmers’ survey was conducted among 956 organic and conventional farmers in North Carolina and Georgia. These farm businesses were identified using a database of H2A applications filed in 2014 provided by the Labor Department. The concentration on North Carolina and Georgia was based on these two states’ consistent records as two of the top 5 states with the most number of H2A applications in the country over the past several years.

The survey received 46 responses, representing a response rate of 4.8%. This response rate could have been much higher if the postal mailings were supplemented by online dissemination of the survey requests. Unfortunately, all available H2A applications databases only contained postal addresses.

Two outreach bulletins were written and completed that report the findings of the survey results. This bulletin will be published online and disseminated in every possible way to farmers, associations and other interested parties. Among other recipients of these materials, these bulletins were shared with those associated with the Georgia Fruit and Vegetable Association, Georgia Green Industry Association, North Carolina Nursery and Landscape Association, Inc., and North Carolina Vegetable Growers Association.

Two Master’s theses were developed for this project. The first was completed by Xueqian Lu, who graduated in May 2016.  The title of her thesis is “The Impact of Local Economy on Sub-Federal Immigration Laws in the U.S. and How These Laws Affect Agricultural Labor Force.”  Her study investigated on the effects of the enforcement of sub-federal immigration laws on the demand for H2A farm laborers.

The second is about to be completed within a few weeks (for a May 2018 intended graduation) by Odeidra Williams. The tentative title of her thesis is “The Reliability of the H2A Program in Filling Supply Gaps in the Farm Labor Market and Enhancing Farm Viability.”  Her thesis serves as a synthesis of several important facets of this entire project.

A total of six (6) journal articles were produced from this project. Four of them are already published in such reputable academic journals as the European Journal of Health Economics, The Economic Labour Relations Review, Agricultural Finance Review, and the AAEA’s Choices Magazine. Two more manuscripts are being finalized for submission to other academic journals.

A total of seven (7) conference presentations were made for this project. Three of these were poster presentations.  Of the four papers, three were presented at international conferences.  One of them was awarded “Best Conference Paper” in an international conference held in Nagoya, Japan.

Collaborations between Dr. Escalante and Luis Pena-Levano (a former MSc student of the department) produced an award-winning entry (2nd place) at the Graduate Extension competition during the annual meeting of the Agricultural and Applied Economics Association in July 2017.  An important product of this collaboration is the ongoing development of a software program designed for farmer applicants under the H2A program that will aid in H2A farm labor hiring decision-making and completion of required application documents.

Research results and discussion:

SURVEY RESULTS

The survey results provided valuable information with important implications on the current state of the H2A program. The 46 respondent farms accounted for a total of 389 applications filed during the past several years for about 6,800 H2A working visas. Of that total applications, about 6,600 visas were approved (96.85 approval rate) covering a total of around 640 worker months.

 

Nature of Demand

Farmer respondents provided specific indications on where H2A workers are being utilized for. It seems that H2A workers are most needed by farmers during harvesting and production or planting work stage of farm activity (35 and 29 response counts, respectively). Farmers are more active in applying for H2A workers during harvest season as it tallied the highest average frequency of applications filed (5.6 times). Processing (value-added production) stage requires the most number of H2A workers as farmers requested the largest number of workers during this stage. Pre-production/pre-planting work stage tallied the highest H2A work months approved (7.6 months).

Timing Issues

The period from approval to the arrival of the foreign workers seems to have taken the longest waiting time. Responses indicate that 43.5% needed to wait between 31 to 60 days before foreign workers arrive after their application had been approved. The waiting period between filing and approval of their application, however, was shorter. 40.9% of the farmers indicate that this waiting period only took 11 to 30 days. The preparation of the application documents seems to have required less time as half of the respondents indicate that they finished this activity within 1 to 5 days. Majority of the sample who provided an assessment (95.8%) stated that the time devoted for their H2A applications actually did not disrupt the implementation of their project.

Documentary Requirements and External Assistance

More than half (58.3%) of the respondents consider the documentary requirements as “reasonable” while 30.6% contend that these are “unreasonable.” More than three-fourths (76.9%) have obtained the assistance of an external agent in the preparation and filing of their H2A applications.

Cost Considerations

The survey participants provided a general indication of the cost of hiring and the resulting productivity of the hired H2A workers. Majority of the respondents have realized an increase in the cost of hiring to some extent. Among the respondents, 21.9% estimated that the cost of hiring increased by more than 100%. A quarter (25%) of the sample indicate that a cost increase ranges from 50% to 100%.

Even though hiring of H2A workers has increased the costs for most farmers, it also helped to increase their productivity. Among the respondents, 53.2% of the sample indicate that productivity has increased to some extent (from 25% to more than 50% improvement). Interestingly, about one-third of the respondents (34.4%) state that hiring of H2A workers does not affect overall worker productivity while 12.5% of farmers reported a decline in productivity by less than 25%.

A majority of farmers indicate that business profits improved after hiring H2A workers. 51.6% of the respondents increased their overall business profits by 25% to over 50%. On the other hand, 15.2% of the sample state that hiring H2A workers has left their business profits unchanged. Meanwhile, one-third of the sample (33.3%) reported that that hiring H2A workers even decreased their net business profits by almost 50%.

Wage Considerations

A majority of the survey participants perceive the resulting wage rate they pay to their H2A workers as excessive. Among the respondents, 90.3% indicate that the prevailing Average Effective Wage Rate (AEWR) is not affordable. Only 9.7% of the respondents think otherwise.

 

MAJOR RESULTS FROM THESES AND JOURNAL ARTICLES

Xueqian Lu’s thesis analyzed the impact of county and state level immigration laws on H-2A applications in the Southeast region, controlling for a variety of macroeconomic variables. H-2A farm work visas are ideally needed by farm business owners to fill in their requirement for agricultural workers, but many farm employers contend that the processing period is too long and too complicated that the program has not effectively addressed their needs (CBS Money Watch, 2010). The study analyzed the possible effects of immigration laws on H-2A visa applications based on individual H-2A application cases from Southeast region from 2006 to 2014. The study finds that state-level strict immigration laws actually have a negative effect on number of H-2A visa applications. This possibly suggests that farm employers could have considered shifting to the production of crops that are less labor-intensive, or could have employed more machines as a substitute for the inadequate labor input. Also, illegal workers who may have migrated to other areas may not want to come back to their adopting county due to fear of being deported. Thus the state-wide law has not increased the total number of H-2A visa application as expected. In addition, the unemployment rate of the previous year has a positive effect, which could possibly reflect the situation of farm workers in the U.S. where even the unemployed domestic residents are reluctant, they do not want to work in the agricultural sector, possibly because of the relatively tough working conditions and the sector’s usually low wage rate.

 

Odeidra Williams’ thesis research addresses two important issues raised by this research project. First, does the H2A program indeed serve as a reliable farm labor sourcing alternative after the undocumented workers have been displaced from farm employment?  Preliminary results indicate that the program’s effectiveness in addressing the gap is still far from being acknowledged as a significant source of replacement labor.  Second, does the H2A program help in enhancing the viability of farm businesses, especially smaller farms (a category that organic farms belong to)?  Preliminary results indicate that farm businesses are actually relatively more economically better off when NOT hiring H2A workers because of cost considerations.

Several journal articles also evaluate issues directly and indirectly related to H2A labor hiring decisions of farmers. These studies provide extensions to important issues, such as employee turnover, health benefits, health access and status, and environmental factors related to labor-input substitution decisions involving H2A workers.

The employment turnover study (Luo and Escalante, ELRR) focuses on the constrained employment choices of undocumented farm workers, who undoubtedly still remains a significant source of farm labor inputs. The study primarily lays out the constrained employment choices of such workers that are supported by the reality that these workers are usually deprived of basic employment rights stipulated by existing labor laws, given their employers’ gross violations in the form of unreasonably low wages, lack of benefits, and unacceptable working conditions, among others, that could not be reported to proper authorities. Even legal workers are difficult to retain in farm positions. The farm industry’s high labor turnover rates can be attributed to several factors. Relative to the nature of manual work in the manufacturing, service, and other non-farm industries, farm operations involve more physically strenuous labor under working conditions that usually pose serious health risks (Calvin and Martin 2010; Escalante, Yu, and Li 2016).  Even with such work demands, farm workers do not receive commensurate compensation as farm wages and benefits are hardly competitive with those offered by non-farm businesses (Emerson 2007; Kandel 2008; Escalante, Perkins, and Santos 2011).

The results of the farm labor turnover study only elucidate the significant relevance of H2A farm workers program that ensures acceptable and competitive wages, in addition to regulated working conditions that comply with decent working standards. The H2A could be a remedy to the farm labor turnover problem.

The EPHB study (Luo and Escalante, AFR) is a follow-up to the farm labor turnover study that focuses on health benefits. As existing federal laws assure documented workers of insurance benefits in businesses with more than 50 full-time workers in other industries, these workers’ employment decisions are more influenced by wage differentials, work demands, and workplace conditions between farm and non-farm employer firms. However, the study’s results for undocumented farm workers suggest a higher elasticity effect as these workers were found to increase their actual farm work days upon acquiring EPHB incentives while also affecting their farm employment expectations. These results provide more interesting implications.  First, employers in general are not mandated by law to provide undocumented workers with EPHB, except for compensation for job-related injuries and accidents.  Thus a farm employer can effectively use EPHB as a retention strategy for these workers.  Under this arrangement, these workers evaluate the farm employment package with EPHB and relatively more inferior wage rates against a higher paying job in another industry, possibly without an EPHB feature in the compensation package.  The farm employers, on the other hand, evaluate trade-offs between incurring incremental expenses in offering EPHB and business viability realized more through increased labor productivity that undocumented workers can be relied on to deliver.

As related to the H2A farm labor program, H2A workers are assured the same health benefit privileges as documented farm workers. Hence, the results of this study should offer some important suggestions for reinforcing the offering of health benefits with other work incentives to hired H2A workers.

Two studies (Luo and Escalante, EJHE; Ghimire, Escalante, and Ghimire, ongoing) also focus on health access and health payment arrangements of various classes of workers. The former study takes on a more general perspective on the worker categories while the latter specifically isolates the H2A workers as a separate worker category.  These studies produce interesting patterns of access, choices among alternative health care service providers, and the resulting payment arrangements adopted.  The H2A workers generally enjoy better access and are more financially capable in affording better health care services.  These results provide even stronger evidence that uplifting workers’ overall welfare is an important goal of the H2A program.

Another study (Pena-Levano, IFAMA paper presentation) takes on different perspective as it introduces environmental factors. The paper establishes connections between labor hiring decisions in the livestock sector and climate change. It argues that since livestock contributes significantly to greenhouse gases emissions across its production chain, its business decisions will be influenced by mitigation policies that target emission reduction.  Its results suggest that as the livestock sector is affected by climate change, land needed for agriculture due to overall decreases in crop productivity will be affected by the imposed carbon tax rate, changes in real income and private consumption pattern, and biofuel policies. One of the most prominent consequences is that due to the less productive land, more capital investment and labor is required, especially for the livestock industry which is a labor-intensive sector. US labor cannot be satisfied locally, many industries require about 50% increase in labor in many sectors, which cries out for the need of labor coming from other regions such us Latin America under the H2A program.

 ECONOMIC ANALYSIS

 A number of analytical approaches were employed in several studies conducted under this project. These studies primarily establish the justifications for the H2A program while, at the same time, discuss the economic viability and profitability effects on businesses.

The employment turnover study employed fractional multinomial logit estimation techniques to analyze time allocation decisions of U.S. farm workers.   Results indicate that green card farm workers tend to allocate fewer workweeks to farm employment than citizens and undocumented workers, in favour of better opportunities in the non-farm sector. There is evidence of an assimilation effect, whereby undocumented workers also tend to re-allocate their time from farm to non-farm employment as their residence tenure increases, even though they experience constrained mobility and visibility during periods of strict immigration control. In the context of employers’ violations of the existing labour laws that currently protect even the rights undocumented workers, such turnover decisions seem justified. The findings raise concerns about whether any governmental effort to legalise the immigration status of such workers would reduce farm job turnover rates and increase farm employment retention, so long as labour standards are not enforced. Moreover, external economic shocks could more easily induce citizen and green card farm workers to abandon farm employment, whereas undocumented workers tend to remain in their farm jobs during such difficult times. This study’s results only strengthens the need for contractual employment through the H2A program as the reliable solution to the issues raised in this analysis.

Another article investigates the impact of EPHB on labor supply decisions of workers in agriculture. This analysis is enhanced by the immigration status angle that allows for the comparative evaluation of the effectiveness of the EPHB incentive on documented and undocumented farm workers. These two perspectives provide a better understanding of labor supply decisions while providing indirect implications on demand conditions. As documented workers’ flexibility in their employment decisions has recently been enhanced by federal imperatives governing insurance benefits, this study will verify the effectiveness of EPHB in retaining them under farm employment even when guaranteed to receive such benefit in other industries. On the other hand, a stronger EPHB effect on undocumented workers’ farm employment decisions may be expected as such workers are not guaranteed by law to be entitled to receive them.  In this case, the EPHB decisions of farm employers reveals some serious labor demand issue involving trade-offs among business profits, worker supply and labor productivity.

In this analysis, we find that the percentage of EPHB-covered farm workers increased over time and validate that rate of EPHB covered undocumented farm workers converged to documented farm workers. Prior to running the empirical models, the data of this study are pre-processed with Coarsened Exact Matching method, which is designed to reduce the endogeneity issues within the estimation.

Another article analyzed issues related to the U.S. hired farmworkers’ utilization of health care services and their specific choices among health care provider and health bill payment method options. Using data from the National Agricultural Workers Surveys for the years 2000 to 2012, this article employed Propensity Score Matching and probit estimation techniques to examine the health care utilization of hired farmworkers. This study’s results indicate that undocumented hired farmworkers are 10.7% and 3% less likely to use U.S. and foreign health care, respectively, compared to documented farmworkers. Health insurance is found to significantly increase hired farmworkers’ use of U.S. healthcare by 22.3%. Notably, compared to their documented working peers, undocumented workers are much less likely (10.3%) to patronize private clinics than they are more likely (3.6%) to rely on migrant health centers even when such facilities remain as their most viable sources of health care service. This article’s analytical framework was extended in another article that includes the H2A workers as a separate category to be compared against the other worker categories.  This study highlights the considerable differences in employment, social, and economic stature of H2A workers vis-à-vis the undocumented workers they are supposed to replace.

Using a computable general equilibrium model, a climate change study analyzed its labor effects and the importance of labor programs. This study finds that considering the overall decrease in pasture-land productivity when production and consumption behaves as usual, there is substitution of land for capital and labor.  There is an overall increase in the demand for labor everywhere. In the case of United States, many agricultural industries require about 50% increase in labor to compensate for the less productive land. Considering the fierce competition for local and international competition, United States has to offer more attractive contracts to attract labor from neighbor regions. Thus, programs such as H2A labor program are crucial to ensure the requirements and needs for labor in labor-intensive industries such as crop and livestock production. Under mitigation of climate change, both scenarios show that even under efforts to reduce climate change, the need for labor is substantial in all regions of the world. United States still requires 40% more labor overall in agricultural sectors compared to our baseline. This means that, independently of the mitigation, the need for programs such as the H2A program are keys to ensure the necessary labor for production. Likewise, in order to make this program attractive, the prices must be competitive in order to attract people from different nations.

Another study utilized a probit model with random effects to examine how local economy and demographic composition affect whether local government signs immigration laws. Furthermore, the study examined how sub-federal immigration laws affected the number of H-2A visa applications. The study found that some local economic factors and demographic composition have statistically significant influence on if local government chooses to sign immigration laws. In addition, the result implies that the enactment of state-wide law enforcement will decrease the H-2A visa applications.

Another (ongoing) study’s preliminary results indicate the H2A program’s importance in supplying replacement labor for displaced undocumented workers. The program’s current utilization rate, however, falls below expectations.  Moreover, the replacement labor from the H2A program can potentially maintain and even enhance the viability potential of businesses through effects on revenue and income growth rates, BUT the current costs associated with H2A labor employment are too high to realize profitability targets.

Participation Summary
50 Farmers participating in research

Education

Educational approach:

Outreach bulletins were written and completed that report the findings of the survey results. This bulletin will be published online and disseminated in every possible way to farmers, associations and other interested parties. Among other recipients of these materials, these bulletins were shared with those associated with the Georgia Fruit and Vegetable Association, Georgia Green Industry Association, North Carolina Nursery and Landscape Association, Inc., and North Carolina Vegetable Growers Association.

Media interviews, press releases and web presence were used to disseminate results of this project.  In addition, several presentations were made in regional, national and international conferences to communicate results to academic community and industry.

 

Educational & Outreach Activities

20 Consultations
3 Curricula, factsheets or educational tools
6 Published press articles, newsletters
7 Webinars / talks / presentations

Participation Summary

50 Farmers
200 Ag professionals participated
Education/outreach description:

Project results were communicated in print through bulletins and publications, in person through presentations, consultations (through phone calls entertained to discuss H2A related issues), media and web presence, among several methods.

The following outputs support these efforts:

    1. Conference Paper, 23rd Conference of the Eurasia Business and Economics Society, Berlin, Germany. T. Luo and C.L. Escalante. The U.S. farm workers’ employment decisions under changing macroeconomic and immigration policy environments.” May 2018.
    2. Poster, SARE Our Farms, Our Future Conference, St. Louis, Mo, “The Sustainability of Organic Farms under the H2A Program” Project, April 2018.
    3. Selected Paper, Annual Conference of the International Food and Agribusiness Management Association, Miami, FL “Global interaction of livestock and climate change: Consequences in welfare economics and labor supply.” June 2017.
    4. Selected Paper, 2017 Annual Meeting of Agricultural and Applied Economics Association (AAEA), Chicago, IL, H. Rusiana and C.L. Escalante. “Assessing the Real Value of H2A Farm Labor Inputs: A Simulation-Optimization Approach.” July 2017.
    5. Conference Poster, Southern Sustainable Agriculture Working Group (SSAWG) 2017 Conference, Lexington, KY. O. Williams, C.L. Escalante, and H. Rusiana. “Evaluating the Effects of the H2-A Temporary Agricultural Visa Program in Mitigating Farm Labor Shortages and Maintaining Business Viability in the Southeastern United States.” January 2017
    6. Selected Poster, 2016 Annual Meeting of Agricultural and Applied Economics Association, Boston, MA. T. Luo and C.L. Escalante. “Health Care Service Access and Constrained Choices of U.S. Farm Workers.” July 2016.
    7. Selected Conference Paper, International Conference on Business & Information, Nagoya, Japan. T. Luo and C.L. Escalante. “The U.S. Immigrant Farm Workers’ Relative Access to Health Services”, July 2016. (Awarded Best Conference Paper)
    8. Luis Pena-Levano (with Cesar L. Escalante, adviser) “Assessing the H2A Labor Program: Implications for Southern Farmers” 2nd Place winner of Graduate Extension Competition at the 2017 annual meeting of the Agricultural and Applied Economics Association, Chicago, IL.
    9. Interview with Alan Mauldin, Reporter for Moultrie Observer, May 2017.
    10. L. Escalante. “Organic Farms and Immigrant Labor” in Sustainable Agriculture at UGA Newsletter, Spring 2015 Issue.
    11. Hayes, L. “Minimum Wage Increase Could Create Serious Challenges for Agricultural Businesses.” Growing America, May 2016. Available online at http://growinggeorgia.com/features/2016/05 /minimum-wage-increase-could-create-serious-challenges-agricultural-businesses/
    12. On Second Thought, Georgia Public Broadcasting, Interview with Linda Chen on Farm Labor and Immigration Policy, May 2015.
    13. (Under Development) Luis Pena-Levano and Cesar L. Escalante. “H2A Decision-Making and Application Software for Farm Businesses”

 

Learning Outcomes

Key changes:
  • Please see section on Farmer Adoption under Project Outcomes for explanation of responses to this section. This project deals with changes that can be made external to the farm businesses. The farmers do not have the power to make those changes. They are the recipient or beneficiaries of any eventual policy changes.

Project Outcomes

3 New working collaborations
Project outcomes:

Impacts

Several studies conducted under this research project have provided further strong evidence on the relative importance of farm workers hired under the H2A guest farmworker visa program. Beyond the effects of stricter immigration policies that create the need for more replacement workers, other factors that can define the need for a stronger H2A program can summarized into:

  1. Increasing farm employment turnover rates among domestic residents whose legal immigration statuses provide them flexibility to choose employers (with “better” job remuneration packages) result in a greater need for reliable contract workers, such as those hired under the H2A program.
  2. Studies on health access, insurance, and service provider choices also clarify the need for improvements in workers’ welfare in these areas. Existing H2A program requirements ensure that these are addressed for prospective foreign workers, who will end up enjoying better welfare than the undocumented workers they replace.
  3. Climate change has added another justification for the need for a stronger, more reliable, and effective H2A program. The resource demands and fiscal policies arising from climate change help define the need for more H2A workers.

The H2A program has great potentials in helping farm businesses realize their business goals of viability (as the studies and the theses confirm) BUT the existing version of the H2A program is costly and difficult for farmers. Its costly structure constrains profitability potentials (Williams’ thesis).  Some farms may have fortunately endured the challenge of sustaining their business operations with patience, persistence, and adept business management skills to offset the effects of delayed arrival of needed farm workers, missed market opportunities, and other demands of their volatile business environment.  But such trend may not persist much longer.  The H2A program’s implementation guidelines, once labeled as “confusing and painful” (Rosenthal, 2012), need to be revisited and amended if the program is envisioned to indeed benefit the farm industry.  Farmer groups have charged that the current program has been “bureaucratic and insensitive to the (farm) industry’s need” and have called for simplification of current procedures (Ong, 2015). Specific requests include suggestions for allowing the filing and processing of applications to be conducted electronically.  Others have also proposed a fast-track evaluation process for workers who have already regularly worked in the country for several years (Sheinin, 2016).

This project’s outputs have provided the extent of incremental costs of farmers’ decisions to hire workers under the H2A program – through the farmers’ survey responses, anecdotal evidences gathered, and from several separate empirical studies conducted on opportunity costs, indirect costs, and other facets of farm labor. Even if not all the direct financial costs stipulated under the program can be substantially reduced, program reforms should address the eradication of opportunity costs associated with postponed production, harvesting or marketing operations due to delayed availability of H2A workers.  This can only be realized by properly streamlining current procedures to increase reliability and efficiency to bring workers in promptly.

FARMER ADOPTION

The value of the impact of this study cannot be directly discerned from farmers’ patronage of the program as benefits that accrue to the farm business will depend on whether the program’s structure and implementation are successfully modified to address the farmers’ concerns. The following graph presents how the program has fared over the last 10 years (including recent years covering this project’s implementation):

The growth rates calculated in the above figure present a comparison of two data sources: those based on certifications or approvals made by the Department of Labor (DOL) and those obtained from the Bureau of Consular Affairs, U.S. Department of State. Differences in total approvals indicate the lag in visa approvals due to the additional procedures and time spent by other visa approval offices (domestic and foreign) before prospective H2A workers are given the final approval to travel to the U.S. to commence work.

Looking at the historical trends in H2A applications and farm labor employment, the figures indicate some growth realized in H2A labor visa approvals in recent years. During the last three years (2015-2017), these growth rates range from about 20% to 24%. In 2017, DOL reported H2A labor certifications that broke the 200,000 mark for the first time.  DOL also reports that its processing efficiency has increased considerably in more recent years as 95% to 97% of complete applications were processed timely (i.e. within 30 days before the start date of need).

However, in spite of these encouraging developments, the H2A program has supplied only about 12% to 18% of the total hired farm labor in the country during the last three years. The plot above shows that proportion of H2A workers to total hired farmworkers has been increasing steadily during most of the 10-year period, but the expectations for this program’s reliability in supplying a more significant proportion of farm employment remain high.

On the legislative side, some efforts to amend the program were made. U.S. Representative Rick Allen of Georgia reintroduced the Better Agriculture Resources Now (BARN) Act that transfers the responsibility of H2A certification from DOL to the Department of Agriculture, which arguably is more familiar with the farmers and their business conditions and “time-sensitive” operations. The Act also proposes, among other things, to eliminate the 50% rule and set wages at no more than 115% of the minimum wage.  This proposal is still awaiting further legislative action.

Representatives Chris Collins and Elise Stefanik (NY-21) also introduced the Family Farm Relief Act of 2017 that supports Representative Allen’s proposed transfer of the H-2A Agricultural Visa program from DOL to DA. Their proposal also addressed some application issues as they suggested that visa applicants be allowed to fill out H-2A applications on paper or online.  They also demanded a more user-friendly online system and the removal of burdensome requirements on advertising and prevailing practice surveys.  This proposed legislation is also currently pending and awaiting further action.

The Congress’ Judiciary Committee Chairman Robert Goodlatte of Virginia also proposed the replacement of H2A with the H2C program.  In addition to supporting the move of certification responsibility from DOL to DA, Goodlatte’s proposal also would allow workers to stay with employers year-round, with an initial stay of 36 months. This proposed bill also expands the definition of “agricultural labor” to extend visas to workers in industries requiring year-round

Workers (such as forestry, dairy and meat-processing industries). This bill also proposed that undocumented farm workers currently in the US should be allowed to apply for H-2C visas. It also has some cost-cutting proposals that include the relaxation of the free transportation and housing benefits for workers under the H2A program.  The AEWR is proposed to be repealed as wages are proposed to be calculated based on some percentage of the federal or state minimum wage, rather than prevailing wages.  This Bill was introduced in the House in October 2017 and voted on (17 Yeas and 16 Nays).  It is currently being modified as requested during the House voting.

Meanwhile as the farm sector awaits for favorable actions on these legislative proposals, farmers must contend with existing guidelines of the program. The economic issues surrounding the hiring of H2A workers (as this study has helped establish) are always two-sided.  As farmers clamor for cost reductions to increase the viability potential of their farm businesses, workers and civil rights advocates rally for their retention as they demand that workers’ welfare should be ensured and upheld. 

There are, however, some neutral issues that need to be resolved to produce favorable consequences to both farmers and workers. Easier, quicker, and more convenient processing requirements that minimize delays and bureaucratic procedures can be less debatable issues to rally for. When these are resolved, then a more deliberate reconciliation of farmers’ and workers’ economic interests is needed to reach a compromise. Only then will the program be truly reliable and attract higher patronage among farmers.

 

PUBLICATIONS/OUTREACH

 

  • JOURNAL ARTICLES

 

    1. Luo, T. and C.L. Escalante. “Health care service utilization of Documented and Undocumented U.S. farm workers.” Accepted for Publication, 2018 issue, European Journal of Health Economics.
    2. Escalante, C.L. and T. Luo. “Sustaining a Healthy Farm Labor Force: Issues for Policy Consideration.” Choices, 32,1 (1st Quarter 2017): 1-9.
    3. Luo, T. and C.L. Escalante. “Employer-Provided Health Benefits and Employment Decisions of U.S. Farm Workers.” Agricultural Finance Review. 77,3 (2017): 358-375.
    4. Luo, T. and C.L. Escalante. “The U.S. farm workers’ employment time allocation and tenure decisions.” Economic and Labour Relations Review. 28,2 (June 2017): 270-293.
    5. Escalante, C., O. Williams, H. Rusiana, and L. Pena-Levano. “Waiting for Workers While the Crops Die: Revisiting the H2A Farm Guest Worker Visa Program.” For submission to the Journal of the American Society of Farm Managers and Rural Appraisers
    6. Ghimire, J., C.L. Escalante, and R. Ghimire. “Undocumented and H2A Farm Workers’ Relative Health Care Access and Choices” For submission to Journal of Agricultural Economics

 

 

  • OUTREACH BULLETINS

 

  1. Rusiana, H. and C.L. Escalante. “H2A Bulletin No. 1: Southeastern Farmers’ Application Experiences and Perceptions of the Farm Guest Worker Visa (H2A) Program.” Department of Agricultural and Applied Economics. UGA, Outreach Bulletin (June 2016).
  2. Rusiana, H. and C.L. Escalante. “H2A Bulletin No. 1: Southeastern Farmers’ Cost and Labor Productivity Assessments of the Current Farm Guest Worker Visa (H2A) Program.” Department of Agricultural and Applied Economics. UGA, Outreach Bulletin (June 2016).

 

  • THESES

 

  1.  Lu, Xueqian (2016) “The Impact of Local Economy on Sub-Federal Immigration Laws in the U.S. and How These Laws Affect Agricultural Labor Force.”
  2. Williams, Odeidra (Forthcoming 2018) “The Reliability of the H2A Program in Filling Supply Gaps in the Farm Labor Market and Enhancing Farm Viability.”

 

  • PAPER AND POSTER PRESENTATIONS

 

    1. Conference Paper, 23rd Conference of the Eurasia Business and Economics Society, Berlin, Germany. T. Luo and C.L. Escalante. The U.S. farm workers’ employment decisions under changing macroeconomic and immigration policy environments.” May 2018.
    2. Poster, SARE Our Farms, Our Future Conference, St. Louis, Mo, “The Sustainability of Organic Farms under the H2A Program” Project, April 2018.
    3. Selected Paper, Annual Conference of the International Food and Agribusiness Management Association, Miami, FL “Global interaction of livestock and climate change: Consequences in welfare economics and labor supply.” June 2017.
    4. Selected Paper, 2017 Annual Meeting of Agricultural and Applied Economics Association (AAEA), Chicago, IL, H. Rusiana and C.L. Escalante. “Assessing the Real Value of H2A Farm Labor Inputs: A Simulation-Optimization Approach.” July 2017.
    5. Conference Poster, Southern Sustainable Agriculture Working Group (SSAWG) 2017 Conference, Lexington, KY. O. Williams, C.L. Escalante, and H. Rusiana. “Evaluating the Effects of the H2-A Temporary Agricultural Visa Program in Mitigating Farm Labor Shortages and Maintaining Business Viability in the Southeastern United States.” January 2017
    6. Selected Poster, 2016 Annual Meeting of Agricultural and Applied Economics Association, Boston, MA. T. Luo and C.L. Escalante. “Health Care Service Access and Constrained Choices of U.S. Farm Workers.” July 2016.
    7. Selected Conference Paper, International Conference on Business & Information, Nagoya, Japan. T. Luo and C.L. Escalante. “The U.S. Immigrant Farm Workers’ Relative Access to Health Services”, July 2016. (Awarded Best Conference Paper)

 

 

  • OTHERS

 

  1. Luis Pena-Levano (with Cesar L. Escalante, adviser) “Assessing the H2A Labor Program: Implications for Southern Farmers” 2nd Place winner of Graduate Extension Competition at the 2017 annual meeting of the Agricultural and Applied Economics Association, Chicago, IL.
  2. Interview with Alan Mauldin, Reporter for Moultrie Observer, May 2017.
  3. L. Escalante. “Organic Farms and Immigrant Labor” in Sustainable Agriculture at UGA Newsletter, Spring 2015 Issue.
  4. Hayes, L. “Minimum Wage Increase Could Create Serious Challenges for Agricultural Businesses.” Growing America, May 2016. Available online at http://growinggeorgia.com/features/2016/05 /minimum-wage-increase-could-create-serious-challenges-agricultural-businesses/
  5. On Second Thought, Georgia Public Broadcasting, Interview with Linda Chen on Farm Labor and Immigration Policy, May 2015.
  6. (Under Development) Luis Pena-Levano and Cesar L. Escalante. “H2A Decision-Making and Application Software for Farm Businesses”

 

Recommendations:

AREAS NEEDING ADDITIONAL STUDY

 

This project succeeds in raising other important issues that need to be resolved. First, the trade-off between farmers’ and workers’ economic welfare needs to be more deeply scrutinized and analyzed.  A compromise of these two conflicting goals needs to be determined.  Without a compromise, the program cannot be implemented to reach its potential and goal of being a truly reliable supplier of replacement workers for the farm sector.

Representative Goodlatte’s H2C Labor proposal deserves further consideration. Aside from its provisions relating to economic and implementation issues, the bill’s proposal to accommodate undocumented workers is an interesting issue to consider.  Such hiring strategy could potentially eliminate a number of administrative or processing issues that translate to delays and additional cost burdens to producers (in terms of foregone profits and opportunity costs).

 

On the other hand, if such (and other future) legislative efforts are not successful and farmers do not have a choice but to contend with status quo structure of the program, then there is a greater need for more assistance from academic and industry sectors to lessen the burden of application among farmers. These efforts could include developing decision aids, application tools, and other assistance that could make their application experiences quicker and less intimidating or overwhelming.

Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture or SARE.