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The labor issue - what\'s a grower to do?

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Tobacco farmers still have high labor costs and need to seek alternatives as contracts do not provide a bigger bottom line

by Diane Shearer

Dr. Kelly Tiller, of the University of Tennessee’s Agricultural Policy Analysis Center, presented findings in May 2007 from surveys conducted with burley growers in 2006. The top two reasons given for potentially exiting tobacco production were lack of sufficient profit and the shortage of affordable and/or legal labor.

Today Dr. Tiller would probably find similar results among both burley and flue-cured growers. Farmers are still frustrated about both issues, feeling “scrooged” by tobacco companies’ contract offers and worried because nothing has been done in Congress to deal with immigration reform or problems in the H-2A labor program.

Tommy Lee grows 60 acres in southern Georgia. In spite of a good year, he will not be increasing acreage because he grows other less labor-intensive crops, as well as running a farm supply business. Stephen Dicks, one of Florida’s 13 remaining growers, says that H-2A is “too cumbersome,” but that “trying to hire locals is bull.” In spite of producing an astounding average of 3,540 pounds of tobacco an acre on his 45 acres this past year, he plans to halve his acreage for 2008. He knows that in the long run, he will get out.

He states flatly, “There are alternatives to tobacco.”

Phillip Mixon agrees. A 30-year-old who farms with his father and grandfather near Waycross, Ga., Mixon moved toward securing an alternative crop by planting more than 100 acres of blueberries in 2007. And in spite of his 540 acres of tobacco being his “best crop in 10 years,” he is planning to cut back to about 400 acres in 2008, partly because of the time involved in getting blueberries established.

He says the change is a result of multiple factors—tobacco prices, labor and costs of fuel and fertilizer. Mixon has a “lot of bad feelings about the immigrant issue.” He’s not expecting it to be solved any time soon, which is why he’s planting blueberries in rows—so they can be picked by machine if necessary.

Charlie Finch of Burley Stabilization Corporation shares Mixon’s bad feelings about problems related to labor and immigration. Neither Finch, Jake Parker, the legislative director of the NC Farm Bureau, or his counterpart at the Georgia Farm Bureau, Jon Huffmaster, foresee any movement on immigration/labor reform during an election year.

The issue is too divisive and volatile. Parker says, “We need a workable, affordable system that allows the producer and workers to have peace of mind.” Without changes in both legislation and current H-2A regulations, that will not happen. About the best to be hoped for in the immediate future is some regulatory relief.

Huffmaster shared a letter the American Farm Bureau sent to Secretary of Labor Elaine Chao in late November. The letter advocates 11 points that would make H-2A “less bureaucratic, less cumbersome, more effective for growers ....” The first reform on the list is a revision of methodology for computing the adverse effect wage rate. Finch notes that labor rates are up in Tennessee and Kentucky. Parker says the rate may actually drop a bit in North Carolina this year, but the bad news inherent in that is when a downward dip occurs, it usually takes a big jump the next year. Parker asserts that during 2008 the Farm Bureau will “continue to advocate for producers and try to help give them information on rules.”

Keith Kightlinger, extension economist for farm management in Tifton, Georgia., sympathizes with farmers’ feelings that they are in a “no-win situation,” but also stresses what every growers’ manual states in the section on employment: Ignorance of laws regarding employees is not regarded as an acceptable legal excuse for noncompliance. He notes that it is essential for farmers to keep up with regulations, and that much of this can be done online.

After the failure of the immigration bill in August 2007, the Bush administration issued a 25- point rule on immigration. The rule having the most impact on farmers was the one regarding “no-match” social security letters. However, this rule is currently on hold because of an injunction issued by a judge in California restraining the Department of Homeland Security and the Social Security Administration from implementing the “safe harbor” rule, which granted employers 90 days to resolve no-match issues. This information can be found on the Social Security Administration’s Web site.

The SSA Web site is an invaluable tool, providing answers to common questions, electronic filing of W-2 forms, and perhaps most importantly a way to verify names and social security numbers. Up to 10 names and numbers can be verified with immediate results online.

Kightlinger points out that the U.S. Citizenship and Immigration Services Web site is another valuable source. The USCIS site gives detailed information for filling out I-9 forms for employee eligibility verification. Failure to use the new I-9 form may result in penalties.

A large percentage of farm labor is illegal, a fact experts and farmers alike acknowledge. Chances are many growers will once again participate in what they know to be an elaborate charade. Workers present authentic-looking documents and are hired, and the farmer essentially hopes he will get through another season.

But some, especially large growers, may come to agree with Leonard Wester, whose North Carolina farm is the setting of Cynthia Hill’s recent documentary film The Guestworker. Weston says in the film that H-2A is the only source of dependable labor for a whole season. Because of the labyrinth of regulations and cumbersome paperwork, most users of H-2A turn to organizations such as the North Carolina Growers Association for help in procuring workers. Others may opt to contract with a company such as Mid-Atlantic Solutions, Inc. (masLabor), based in Lovingston, Va.

According to the masLabor Web site, its purpose is “to make the benefits of the H-2A programs available to employers while minimizing potential liabilities.” For a flat fee of $3,100, masLabor agrees to provide up to 10 workers. The cost is an additional $100 for each worker over 10. Dave Fulton, a co-owner of the company, says their main expertise is knowledge of the regulatory process and how to coordinate all the government agencies involved.

He notes, “The key thing for tobacco is getting people who are used to field work,” and believes his company has recruiters who are good at getting the right people. He maintains that for a farmer needing six or more workers and needing to meet H-2A requirements, masLabor is cost effective. masLabor currently has 500 clients in 30 states, and Fulton predicts that may grow by as much as 20 percent this year.

With little chance of new legislation relating to labor and immigration issues in 2008, growers must educate themselves on regulations and procedures, keep in touch with local tobacco team experts and support organizations, and hope to make labor decisions that are both cost effective and wise.