Michigan farmers across the state are on the verge of calling it quits, citing federal policies with the H-2A temporary agricultural worker program that are driving up labor costs to unsustainable levels.
The H-2A program designed to help farms with migrant labor comes with an “adverse effect wage rate” (AEWR) determined by the U.S. Department of Labor that has jumped by 85% since 2008, now set at $18.50 per hour base pay, plus required housing and transportation.
The base wage is up more than $1 per hour from last year, at a time when rising input costs for Michigan farms and cheap imports are also conspiring to shrink profits for farmers to zero.
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“I can’t buy my inputs any cheaper than I already am. And nobody wants to pay me any more for what I’m producing,” Nick Oomen, who runs the fourth-generation West Michigan Produce near Hart, told The Detroit News. “So it’s pretty simple math at that point. If it costs you ore to produce it than what you’re getting paid for it, then you probably shouldn’t be producing it anymore.”
“We’re scraping through and making such small margins at this point,” he said. “And that’s why we say, look, we’ve got one or two more years of this and we’re just done because we can’t make any more at it anymore.”
Data from the National Council of Agricultural Employers and the Bureau of Labor Statistics show growth in the AEWR has outpaced private sector wages since 2008, as the program to bring in temporary laborers from other countries has swelled from 277 participants in 2010 to more than 15,000 in 2023.
In just the last two years, the AEWR has jumped by $3.78, leading to the first decline in Michigan H-2A workers in over a decade, according to the News.
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“Our short-term ask to Congress is just to pause the wage rate increase,” said John Kran, counsel for Michigan Farm Bureau. “Let it stay where it has zero increases really, because we need to bridge to a time when we have hopefully a Congress that’s willing to tackle the tough issues.”
Caleb Herrygers, with Hart’s Herrygers Farms, told the News the wages are one factor, but other federal requirements in the program add about 65% on top of the hourly rate to house and transport workers.
“When a worker goes out at $18.50, he’s actually costing us $30.53 an hour,” he said. “Why it’s beginning to be a real problem on the farms is there’s not the margin to cover that anymore. The price that we’re receiving for produce really has not changed, just even nominally in the last 20 years. We’re selling asparagus for the same dollars per pound than we did 20 years ago, sometimes even less.”
“It’s not white flag, yellow flag anymore,” Katie Vargas, manager of Joe Rasch Orchards, added. “It’s a red flag. And now we’re to the point where we’re looking at maximum years, like a few years of being able to continue with us.”
Even the workers in the H-2A program see the problem, and support freezing wages to ensure they’ll continue to have work in the future.
“I would be OK with freezing it and just keeping it the way it is,” Mexican farm worker Alberto Garcia told the news site. “I think a lot of people, you’ll be surprised to know that they will think the same way just as long as they keep on bringing us so we can make that living for our families.”
U.S. Congressman John Moolenaar, R-Midland, introduced bipartisan legislation in January known as the Supporting Farm Operations Act to freeze the AEWR rate at the 2023 level through 2025.
Moolenaar notes Michigan has the fourth highest AEWR rate in the nation following a $1.16 per hour hike on Jan. 1.
“My legislation ensures (Michigan farmers) will continue to have a reliable workforce and can make ends meet while growing the food we need,” he said at the time.
Moolenaar’s House Resolution 7046, currently in the House Committee on the Judiciary, has strong support from Michigan Republican U.S. Reps. Bill Huizenga, Jack Bergman, Lisa McClain, and Tim Walberg, as well as Democratic Congresswoman Hillary Scholten. It’s also backed by Michigan Farm Bureau, American Farm Bureau Federation, National Council of Farmer Cooperatives, International Fresh Produce Association, U.S. Apple Association, and others.
Democrats in the Michigan Legislature, meanwhile, are pushing a bill designed to increase regulations on labor contractors who funnel H-2A workers to Michigan farms, according to the Midland Daily News.
The bill, sponsored by Holt Democratic state Rep. Kara Hope, “would require labor contractors to provide temporary workers with relevant information relating to their job, including duties, hours and work site locations,” the news site reports.
The bill would further task contractors with maintaining records about interactions with workers and to remain in good standing with the Department of Licensing and Regulatory Affairs.
“The beneficiaries are people that are currently being exploited by employers,” Hope told the Daily News. “It’s a basic fairness issue.”
Hope’s bill, which has nine Democratic co-sponsors, has been parked in the House Committee on Labor since January.