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Forum: Immigration reform bodes changes for ag

By , - Last modified: February 14, 2013 at 12:35 PM

A renewed push for comprehensive immigration reform is gathering steam in Washington, D.C., and that could have profound implications for agriculture, two U.S. Department of Agriculture economic researchers told attendees this morning at the Lancaster Chamber of Commerce and Industry's Ag Issues Forum.

Estimates indicate about half of U.S. crop workers are here illegally, researcher Tom Hertz said. About three-quarters of U.S. crop workers are foreign-born, the vast majority from Mexico, he said.

Agricultural labor is among the lowest paying sectors of the U.S. economy, Hertz said. Farm workers earn less than $11 per hour, according to USDA data, compared with close to $20 per hour for nonfarm workers.

The effect of labor costs on food prices depends on the crop in question, but it is smaller than people might suppose, accounting for roughly 10 percent of the supermarket price, Hertz said.

Hertz’s colleague Steven Zahniser presented the results of simulations showing how the U.S. economy might change if immigration reform either increased the supply of legal temporary farm workers or dramatically decreased the supply of illegal labor overall.

In the former case, adding 156,000 legal farm workers would, after 15 years, increase fruit and vegetable output by 1.1 percent to 2.0 percent relative to baseline, Zahniser said. Wages would decline by 3.4 percent for the permanent farm work force and by 10.0 percent for temporary farm workers, he said.

Conversely, a 40-percent decrease in the nation's number of illegal immigrants – a reduction of about 5.8 million people – would reduce farm output by 2.0 percent to 5.4 percent. Wages would rise by 3.3 percent to 7.5 percent for the permanent farm work force and by 13.6 percent to 39.8 percent for temporary farm workers, he said.

In the latter case, wages for low-paying occupations would rise 2.2 percent to 3.2 percent in the broader economy but would fall slightly for occupations paying more than $20,000, due to the ripple effect of reduced economic activity, Zahniser said.

The White House and a group of senators have each released outlines for immigration reform in 2013, Zahniser said.

The senators' "bipartisan framework" calls for creating "a workable program to meet the needs of America's agriculture industry," Zahniser said. The White House proposal discusses tweaks to the existing H-2A agricultural guest worker program but does not propose a new agricultural guest worker program, he said.

If changes in immigration law result in wage increases, some farmers will choose to adapt through mechanization, reducing their labor needs; others likely will lose out to cheaper imports, Hertz and Zahniser said.

Dairy is less at risk than other sectors, because the market for fresh milk is robust and not liable to import substitution, Hertz said.

Farmers and food processors need a guest worker program, said forum attendee Michael Melhorn, owner of MainJoy Unlimited Inc., a Lancaster County-based poultry transport and handling firm. Immigration reform is a pressing issue, he said.

"I don't think there would be the outcry for reform if it wasn't needed," he said.

Editor's note: This story has been modified from its previous version to correct attribution of some statements.


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