NEW YORK STATE — Some of the best vegetables in the world are grown right here in New York state. With clean waterways, excellent soils, and a favorable growing climate, our vegetable industry is the second largest agriculture sector in the state and one of the most diversified in the country.
The industry is multicolored in shape, size, and business plan, ranging from commercial operations that farm thousands of acres and sell wholesale throughout the eastern seaboard, to farmers who tend a few highly productive acres and market direct-to-consumer. New York’s vegetable growers take pride in supporting their families, employees, and communities, all while providing essential nutrition to the nation and the world.
But, the question is: how will we stay in business in the years to come?
New York is an expensive state. Despite an abundance of natural resources, we deal with high taxes and ever-changing regulations that our out-of-state competition does not. However, it’s the significant cost of labor and associated costs that other industries do not pay, such as housing, utilities, and transportation, that will be our demise. Compounded with a potential lower overtime threshold, the future of farming in NYS is quite uncertain.
Even though our industry is mechanized, we still need a workforce to plant, prune and pick the delicious vegetables and fruits that consumers expect in the supermarket, which is why 30-50% of our expenses are attributed to labor-related costs. Absent continued focus on dealing with these issues in New York, our competition in other states and countries will drive us out of the fresh vegetable business.
For example, Pennsylvania vegetable farmers are only required to pay $7.25 per hour for labor with no overtime, in contrast to $13.20 in NYS (likely to be $15 per hour) with a 60-hour overtime threshold. H-2A labor expenses in PA are also less than in NY at $15.54 per hour compared to $15.66 per hour. It is difficult to compete with commercial growers in Pennsylvania, New Jersey, or any other state serving the same markets when such a significant portion of our expenses are driven by public policy. The threat of lowering the overtime threshold to 40 hours is forcing all vegetable growers to seriously consider if we can continue in NYS.
Additionally, the unfair competition from Canadian vegetable producers cuts us off right at the farm gate. A “one-way” border allows fresh Canadian produce to enter U.S. markets and out-compete NY produce due to government trade policies and a favorable currency exchange rate.
Vegetables moving north are only welcomed when Canadian supply cannot meet consumer demands. The U.S. market is often viewed as a “terminal market” meaning Canadian producers will take whatever they can get for their produce because they don’t want it coming back.
So, where does NY stand, as it considers the overtime threshold for farms?
Well, the refundable overtime tax credit, included in this year’s state budget, could offset additional wage costs should overtime be lowered. But, this policy requires farmers to be beholden to government subsidies. I’m not sure I want my business plan to be based on government funds to keep me in the black.
Further, the complexity of this overtime tax credit is such that prospective seasonal H-2A farmworkers will look to New York as a place where they could work up to 60 hours a week if farmers pay overtime for the last 20 hours. Or they can choose states like Ohio, Pennsylvania, Michigan, or New Jersey, all with plenty of outstanding H-2A job requests, and get as many hours as they desire. I’m already aware of farmworkers who have left for jobs in other states because they were dissatisfied with the current 60-hour overtime threshold. It is unfortunate that farmworkers will be the ones getting the short end of the stick if overtime is lowered further.
The solution is to maintain the current 60-hour threshold. If policymakers are insistent on overtime changes, then they should pursue changes at the federal level to ensure our farms can remain viable and competitive. We must continue to strengthen relationships with elected leaders, invest in basic and applied research to discover new technological approaches to ongoing challenges, and find ways to minimize labor costs and needs on farms.
Brian Reeves is owner of Reeves Farms in Baldwinsville, president of the NYS Vegetable Growers Association, and a supporter of the Grow NY Farms Coalition.
