Transparency and clarity. That's what a newly formed five-state, 30-organization coalition is asking of the United States Department of Agriculture (USDA) in terms of how it calculates the Adverse Effect Wage Rate (AEWR), which determines minimum wages under the H-2A agricultural guest-worker program.
The coalition, led by two agriculture organizations–the Georgia Fruit and Vegetable Growers Association (GFVGA) and the NC Sweetpotato Commission (NCSC)--was formed following three consecutive years of AEWR increases in Georgia. "The first year, our growers asked why it increased so much," says Chris Butts, executive vice president of GFVGA, adding that that first year was also the year that Social Security had its largest cost of living increase in history and the AEWR rate increase outpaced that. "Our first step was to go to USDA and the Department of Labor (DOL) because we didn't understand why these rates were rising at such a sharp increase–could they explain it to us? However, we weren't given a response that we could take back to our members to explain how the rate is set."
Thus, more meetings followed with both the USDA and the DOL to attempt to understand the survey process to help determine this rate. However, those efforts didn't lead to any clarity. "What was alarming was that none of our growers reported ever receiving a farm labor wage survey. So, if they aren't responding and providing data on their H-2A program usage, who is providing that data? That's one thing we've asked them to help us understand," says Butts.
In fact, at the NCSC, Michelle Grainger, executive director of NCSC, participated in an NC-based Farm Labor Wage Survey committee to help pull together recommendations to ensure better accuracy of the information collected and enable further transparency around when, and to whom, the surveys were being distributed and how the questions were being asked. One suggested change was to emphasize that this survey was meant for U.S. citizens. "Should a grower receive the Farm Labor Survey (FLS), it is important to emphasize that the survey is collecting data only on local employees of the operation and not H-2A employees. The data provided should reflect U.S. citizens, otherwise, the hourly wages for H-2A employees are inaccurately included in the formula. This further inflates the entire labor portion of a producer's balance sheet and creates a double compounding effect when it comes to then fairly compensating the local employee to ensure continuity of year-round skilled labor," says Grainger.
Blueberries from Georgia are a key crop for the state. Photo: GFVGA
FOI filed
Then, in 2024, GFVGA filed a Freedom of Information Act (FOIA) request with the USDA to get the necessary transparency on wage calculations. "We received a general cursory response from the USDA and the DOL, but again, we were left without a full understanding," says Butts.
Meanwhile, two more annual increases came and went, which is when strength in numbers was in order. "We needed to achieve more of a critical mass from the industry. This is not just a Georgia or a Southeastern problem. It affects fruit and vegetable production in particular because of our high reliance on the program all around the country," says Butts, adding that the first organization to sign on to the coalition was the NCSC.
Supporting the request is also research from Dr. Blake Brown, Hugh C Kiger Professor Emeritus, NC State University, which indicates that the AEWR calculations have deleterious consequences for farmers, consumers, and American workers. This research will be available mid-June.
For example, Georgia had seen a 31 percent increase in H-2A rates in three years. Nearby North Carolina–a key sweet potato growing state–had seen its rate increase 18 percent in four years. "We also had no line in sight on how or why this calculated increase was determined," says Grainger.
This brought up another concern–the H-2A wage increase discrepancies between states. "It varies by region, even within the southeast. There are sweet potatoes produced in Georgia, but North Carolina pays a very different rate than Georgia," says Grainger, adding that it's also not only affecting produce producers but other agriculture-related industries such as Christmas tree growers or nursery and landscaping companies, as well.
L-R: Chris Butts, Michelle Grainger
When are rates announced?
Another point of contention is the timing of the rates, which are not released until mid-November of each year. "A grower utilizing and dependent on this system has essentially two months before their first employee through the H-2A system arrives. That employee's contract start date has been set up because there's so much to do with background checks and verifications before that individual crosses the border," says Grainger. "With the new increased rate, the grower is now forced to modify, where possible, their operation's production plans as well as adjusting their budgets to plan for profitability all based on what feels to be an arbitrary number that is given to them."
All of this is also happening at a time when U.S. growers are already feeling the weight of extreme cost-increase pressures. Growers are also contending with rising imports in produce, many of which are coming into markets on top of traditional U.S. marketing windows. "That's going to be exacerbated if wages continue to rise," says Butts, adding that for some growers, labor costs are the largest percentage of their expenses. "The only choice those in Georgia have anymore is to hire fewer workers–that's the only way they can reduce the cost. If they do that, they've got to reduce acreage." The concern then is growers from outside of the U.S. will make up the difference in non-U.S. acreage.
Of course, many of these concerns are shared by growers across the country, though H-2A program usage is heavier in the southeast. "California has about the same number of H-2A workers as we do, but maybe 20 times the volume of production. It's a different labor issue they're facing, but it is an industry-wide problem," adds Butts. The southeast also sees a number of diverse operations in which farmers grow multiple crops, many of which are specialty crops requiring labor.
North Carolina is the top sweet potato-producing state. Photo: NCSC
Next steps for the coalition
So, where to next? The coalition awaits word from both the USDA and the DOL, which, along with the requested transparency, is also questioning whether these rates reflect the economic realities in rural communities. In the meantime, extended stakeholders across the industry, including congressional members, are interested in this area of concern. "We've also been approached by other organizations not originally part of the coalition that want in because they have been adversely affected and see value in it," says Grainger.
After all, as she notes, in many states, agriculture is one of the top industries. In North Carolina, it is the number one industry valued at over $111 billion. "Our ag industry employees represent over 17 percent of our entire working population. If we're not able to feed and provide for our rural communities while doing so for the rest of the nation, we have a real national security issue," Grainger says. "There is no better agriculture as far as food safety, abundance, and affordability than American agriculture. However, if we are being written out of our ability to produce at a profitable rate that is fair and equitable, then as a nation, we have a lot to be concerned about."
For more information:
Chris Butts
Georgia Fruit and Vegetable Growers Association
[email protected]
https://www.gfvga.org/
Michelle Grainger
North Carolina Sweetpotato Commission
Tel: +1 (919) 894-1067
www.ncsweetpotatoes.com