New data released by the American Farm Bureau Federation shows a recent final rule regarding H-2A wages gives farmers and farm laborers much needed stability. Micheal Clements shares how the improvements help farmers plan for the future.
Clements: The H-2A adverse effect wage rate final rule changes the index wages are based on, providing farmers predictability in labor costs. New data from the American Farm Bureau Federation’s Market Intel team shows the change will stabilize wage rates, according to AFBF Congressional Relations Director Allison Crittenden.
Crittenden: This data from the Market Intel proves that farmers will have more predictability and stability when it comes to their wage rates. What we’ve seen using the old methodology that’s based on the survey is there are very unpredictable increases in random years. And what we experience using an ECI Index wage methodology is a predicable increase from year-to-year, which helps farms make important planning decisions.
Clements: The final rule no longer uses USDA’s Farm Labor Survey for workers who fall under core farm occupations. Instead, the rule will base wages on the Employment Cost Index.
Crittenden: For 97 percent of H-2A workers, their wages will be frozen for the first two years, so for 2021 and 2022. In 2023, the wages paid to those individuals will be indexed based on the Employment Cost Index. So, the wages will increase based on however much the Employment Cost Index increased in the preceding 12 months.
Clements: Crittenden says the final rule allows farmers to predict wage and labor costs.
Crittenden: In a lot of our labor-intensive states, labor makes up more than 20 percent of the total expenses of the farm. So, it’s really important to have a predictable, stable wage methodology for H-2A workers, so that the program continues to work, and farmers can continue to use it.
Clements: Find the complete analysis on the Market Intel page at fb.org. Micheal Clements, Washington.