More Ag Employers Are Offering Benefits - Is It Enough?

By Carol Miller|July 17, 2024

The ag industry does not offer worker benefits all that often. The only benefit offered by more than half of growers were bonuses/discounts (54% offer these.). Health insurance and paid vacation tie for second, with 49% of growers. This according to feedback from our latest State of the Vegetable Industry survey.

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More than 100,000 (103,083) more positions were certified in fiscal year 2023 than in fiscal year 2020, despite an increase of nearly 19% in the national average Adverse Effect Wage Rate (the minimum wage employers who participate in the H-2A program are required to pay).

— Veronica Nigh, Senior Economist, The Fertilizer Institute

Naturally, the size of the operation has an outsized impact on how likely a farm is to offer benefits. When we look at only large growers (farms with more than 1,000 acres), the number of growers offering health insurance jumps to 79%. Sounds impressive, but that means a fifth of large growers do not offer health insurance to even their full-time, year-round staff. The No. 1 benefit offered by large growers, by the way, is health insurance. Bonuses and discounts come in at No. 4, with 67% of large farms offering the benefit.

We’ve had a steady increase in the number of growers who can respond to this question. When we first asked two years ago, 226 growers responded to the question. This year, that jumped 327, a 45% increase. A similar number of overall growers shared responses to the Survey overall in the past three years, so that is a significant shift in reporting.

That may be partly due to new labor laws in key states. For example, paid sick leave is required in California.

Imports Have an Unfair Advantage

The costs incurred in offering benefits are quite high, but they’re something most U.S. companies must provide to stay competitive. That increased cost makes competition from imports all the more potent.

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The increase in foreign produce entering the country strikes many growers as unfair competition. The number of vegetable imports tripled between 2000 and 2022, according to the USDA Economic Research Service. And 2023 saw the first time all ag imports exceeded ag exports.

That issue grows starker when labor comes into the picture.

Take Mexico. Although Mexican laborers have seen a sharp increase in pay, U.S. wages still far exceed them. The current average hourly wage in Mexico is 75 pesos per hour, or about $4 per hour with June 2024 currency exchange rates, according to the Economic Research Institute. Compare that to what USDA reported as the average U.S. gross farm wage in 2023: $18.81.

As one anonymous grower-respondent told us: “We need H-2A to have a reliable workforce. But we can’t afford to continue paying the increasing wages when the U.S. is importing the same products from other countries where they pay one tenth the cost of the labor and don’t have the same restrictions and costs. The imports are undercutting our products. We lose money four out of five years.”