Ag Today April 4, 2017

Farmers Find Rotten Apples in Trump’s Ag Policy Barrel

By Glen Martin,  Cal Alumni Association UC Berkely

President Trump’s positions on immigration and trade are causing some queasiness among people who largely supported him during the campaign: farmers. The reasons are straightforward enough. Oft-repeated protectionist sentiments raise the possibility of a trade war that could throttle U.S. food exports, and Trump’s fixation on building a “beautiful wall” on the nation’s southern border threatens the agricultural labor force.

Anything that could crimp US exports is especially worrisome to farmers, including California farmers. To a very real degree, the world is more interested in what we grow than what we make these days, and the tasty delicacies produced in the Golden State are in particularly high global demand.

“Basically, the US is making other countries rich by buying their extruded plastic products,” says California Farm Bureau Federation president Paul Wenger. “In turn, they want to buy our food. Fifty-four percent of the containers leaving from the Port of Oakland contain agricultural products. And of those containers, 80 percent contain products from California farms.”

A lot of those California containers contain high-value specialty crops such as almonds, walnuts, pistachios, and various fruits and vegetables; all sell at premium prices. So any policy that could evoke anything smacking of a trade war makes California farmers blanch, acknowledges Wenger.

“Eighty percent of California’s almonds and 66 percent of our walnuts are exported,” says Wenger, who raises both nut varieties in the San Joaquin Valley. “So while we don’t think a trade war will actually happen, we’re nevertheless concerned.”

Gordon Rausser, a professor in the Department of Agricultural and Resource Economics at UC Berkeley, says that US crop exports are likely to suffer under “protectionist memes” propagated by the administration.

“Anywhere crops are grown in this country, the backbone of the workforce is Latino.” And it’s not just production, says Card. The nation’s food processing sector also depends on Latino labor. “Vegetable processing, meat packing: all of it depends on Latino workers.”

“Trump and his advisors, especially Steve Bannon, believe strongly in protectionism,” says Rausser. “It’s clear that if they get an opportunity to walk away from the World Trade Organization, they will. “We’ve spent the last 50 years working under the WTO’s General Agreement on Tariffs and Trade to level the playing field. It hasn’t been perfect, but many growers, including California nut, citrus and vegetable producers, have benefited hugely. If Trump is successful in turning away from these agreements, agricultural commodity exports will suffer immensely.”

Rausser observes that the impact will be compounded if Trump is able to secure legislative approval for his proposed border tax, which could impose levies of 20 percent on US imports.

“A border tax will give a huge boost to the U.S. dollar,” says Rausser, “and that will further erode US imports, including California agricultural produce. A strong dollar makes our exports more expensive to importing countries. And that pain would be further compounded by the reduced prices growers would get for their products if they had to sell mostly in the US. Given that 80 percent of the state’s almonds are exported, the prices for almonds would decline dramatically if growers were suddenly forced to sell most of their nuts domestically because their foreign markets had dried up.”

As noted, labor issues are also contributing to agriculture’s growing unease with Trump. American agriculture depends on foreign labor. More to the point, it depends on the labor of Latino immigrants.

“As much as 70 percent of US farm labor is done by Latino immigrants, mostly Mexican immigrants” says David Card, a Cal economics professor widely known for his labor market research. “People tend to think of them as central to agricultural operations in California, Arizona, Texas, and Florida, but they’re critical to agriculture across the entire country. A lot of sugar beets are grown in the Red River Valley in North Dakota, and that’s dependent on Latino labor. There’s an area in Pennsylvania that grows a lot of mushrooms—virtually all Latino labor there. Anywhere crops are grown in this country, the backbone of the workforce is Latino.”

And it’s not just production, says Card. The nation’s food processing sector also depends on Latino labor. “Vegetable processing, meat packing: all of it depends on Latino workers,” he says.

Trump’s fulminations against undocumented immigrants already are exerting a dampening effect on people trying to come into the US—and not just illegally, says Card.

“There already are huge problems with immigration, and it’s clear to me that, explicitly or implicitly, the [directives] are coming from the top,” says Card. “I’m a Canadian citizen with a green card. I’ve applied for US citizenship. I’ve traveled and come back to the U.S. three times recently, and each time I was hassled about my entry. Each time I was threatened with seizure of my green card. Now, I’m an extraordinarily white person, and the situation is significantly worse for people of color, or people from countries other than, say, Canada. People come up to me every time I give a talk on immigration with horror stories about themselves, their family members, or their friends.”

The irony is that immigration from Mexico and other Hispanic countries had fallen dramatically before Trump took office, Card says. After 9/11, policy changes that required employers to verify the identification of laborers have greatly reduced the number of undocumented workers getting hired, reducing incentives for illegal immigration.

“Also, Mexico’s economy has improved significantly over the past decade,” Card says. “It’s not fantastic at this point, but it’s much better than it was, and it’s absorbing greater numbers of workers. So there is less and less need for people to go north.”

Cal Agricultural and Resource Economics professor Jeff Perloff generally agrees with Card’s assessment. Perloff conducted a study that found that the miles farm workers travel within the borders of the United States have dropped dramatically, declining by about 40 percent since 1993.

“Farm workers typically work a crop in one state, then when they’re finished they move on to another state and work a different crop,” says Perloff. “Our figures are for both documented and undocumented workers. We can’t prove that fear of being caught by ICE was responsible for the decline, but it’s likely that fear is at least one of the factors. In any event, significant limits to entry have been imposed on the agricultural labor market. That has resulted in a reduced labor pool, and one that is both older and more female in its makeup. An older agricultural labor force that skews female travels less than younger, male-dominated work forces.”

As a result, growers already are dealing with labor shortages, some of which have been exacerbated by policies stimulated by anti-immigrant fervor.

“We had ICE raids in California a couple of years ago right at the peak of the nut harvest that were very disruptive,” recalls Wenger, “and it’s been worse in other states. About four years ago, the Georgia legislature passed very tough legislation that required growers to e-verify all workers. The result is workers just bypassed the state. Typically, workers harvested crops in Texas, then moved on to Georgia to work peaches, then traveled to Florida to work on a variety of crops. But after that law passed, they just drove through Georgia, stopping only for gas. Peach growers couldn’t get any help. Their fruit rotted in the orchards.”

Given that labor shortages are likely only to get worse under Trump, many growers are hoping to eschew human workers altogether. American agriculture already is highly mechanized, and the trend is accelerating.

“And it’s not just due to too few workers,” says Rausser. “A friend of mine grows almonds, and he says when the California minimum wage rises to $15 an hour [in 2023], he won’t be able to justify human labor inputs. So he’s planning to move completely to robotics, or to as great degree as possible. And he’s not alone. Research and interest in agricultural robotics is skyrocketing. There’s tremendous investment from private equity and hedge funds in the sector. We’re even seeing machines for crops that have always been viewed as too delicate for anything but human harvesting, such as lettuce and strawberries.”

The H2-A visa closely resembles the foreign worker programs of Saudi Arabia and Qatar, nations notorious for laborer abuse…“It’s depressing. I really don’t think Saudi Arabia should be our standard for immigrant labor.”

Card thinks there’ll also be increased pressure, to which Trump may acquiesce, for the issuance of more H-2A visas, which allow foreigners to temporarily enter the United States for agricultural work. Many of these visas have already been granted, says Card – about 90,000 in 2014 alone, with 83,000 going to Mexican laborers.

“Growers love them,” Card says, “and they’d like to have a lot more people come in on them.”

H2-A visas require employers to pay for transportation to and from the laborer’s country of origin, and supply free housing and meals. But the reality doesn’t always jibe with the regulations, says Card.

“[H2-A workers] are essentially indentured laborers,” he says.  “They can only work for the employers who bring them in, the housing and meals may be inadequate, and they don’t always get paid minimum wage.”

Further, the H2-A visa closely resembles the foreign worker programs of Saudi Arabia and Qatar, nations notorious for laborer abuse.

“The way things are going, that could well become the model for western countries,” Card says. “It’s depressing. I really don’t think Saudi Arabia should be our standard for immigrant labor.”

Wenger says farmers generally are concerned about the welfare of their laborers, and support meaningful and humane labor reform.

“We need them,” he says, “and we need to find a way to get documentation for the people who don’t have it. If you think you’re going to ship 11 million people out of the country, people with families and roots in our communities, you’re kidding yourself. It’d be incredibly disruptive and unjust, and I don’t think the American people would stand for it.”

So are farmers having buyer’s remorse about Trump? Maybe, says Rausser.

“I have family members who farm, and they were very enthusiastic about Trump,” he says. “Now some of them are beginning to wonder.”

Wenger says farmers weren’t so much besotted with Trump as disillusioned with Hillary Clinton, and that their support for the president shouldn’t be taken for granted. Farmers, in short, may be bonded to the soil, but they tend to take any politician with a grain of salt.

“You look at Wisconsin dairy farmers, and they’ve always voted Democrat,” Wenger says. “They were part of that Blue Wall that crumbled. They just didn’t like the candidate this time around, and they were ready for a change. Farmers are more conservative than the electorate as a whole, but there are a lot of farmers who are Democrats out there: conservative Democrats, yeah, but still Democrats. For myself, I’ve had farming friends call me a bleeding heart liberal, while others call me a redneck. At this point, we’re not going to have another choice for four years, so you work with what and who you have. We’re going to keep farming, and see where it ends up. You can drive yourself to drink, but if you do that, all you’ll end up is drunk.”

Posted on April 3, 2017 – 3:44pm