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Federal wage rules are strangling family farms in Michigan

Vaseline 2 months ago

Michigan farmers face enormous economic challenges that threaten the sustainability of the state’s agricultural operations. According to the U.S. Department of Agriculture, Michigan divested hundreds of farms last year alone, a statistic I hope my family farm—which has been around since 1903—can avoid.

Federal regulations surrounding wages are a major contributor to the decline. Policymakers must tackle the red tape that is slowly suffocating the state’s vibrant farming community.

Unlike corn or soybean farms where harvesting is carried out mechanically, fruit and vegetable growers require a lot of human hands. And since our farm produces everything from cucumbers to tomatoes and blueberries to apples, those hands have the calluses to show for it.

But my family and I can’t do it alone. The company relies on significant amounts of hired labor — jobs that few Michigan residents want to fill. Accordingly, we are required to hire immigrants who are here legally to do the job. This is where Uncle Sam’s funny stuff comes into play.

Federal wage mandates require farms in the state to pay immigrants $18.50 an hour, a level that increases every year and does not include housing, transportation or visa costs, all of which come at the grower’s expense. The state-mandated wage floor has risen nearly 30% since 2019, far exceeding Michigan’s normal minimum wage of just over $10 an hour, which applies to other businesses such as restaurants or retail stores.

Why? Because the calculation used by bureaucrats in Washington to calculate mandatory wage levels is backwards. The rate is set centrally and is completely disconnected from market reality, meaning farms and ranches have to deal with the consequences.

Farm families across our state are struggling to keep up with rising labor costs. For example, John Kran of the Michigan Farm Bureau recently expressed concern, saying, “If you work in a specialty crop industry such as produce, produce, nurseries (or) greenhouses that require seasonal labor, this could be as high as 40 %. % of production costs in labor alone.”

The wage gaps are even greater when we look beyond Michigan’s borders.

For example, competing farmers in Ontario are subject to mandatory wages of less than $12 per hour. Meanwhile, labor costs in Mexico are about one-tenth of those in Michigan. This discrepancy puts Michigan farmers at a serious disadvantage, making it impossible to compete with cheaper imports. Higher production costs translate into higher consumer prices at the grocery store, prompting Americans to purchase cheaper alternatives from our trading partners.

Overall, U.S. agricultural production costs have skyrocketed, from $100 billion in 2020 to $460 billion in 2023, with inflation causing the prices of essential commodities such as fertilizers and pesticides to rise by 78% and 66%, respectively. At the same time, net farm income is also falling sharply, with a projected 25% decline this year compared to 2023, according to the U.S. Department of Agriculture.

The ripple effects extend far beyond family farms and the rural communities that operate around them. The national food supply is threatened as the availability of domestic products decreases and our dependence on imported food grows. With all the geopolitical volatility, it’s not hard to imagine a scenario in which our historically stable food supply falls to pieces.

It threatens our economy and national security, and consumers will miss us when we’re gone.

Fred Leitz is the owner of Leitz Farms, a family farm in Sodus.