Immigration Reform and
the Competitiveness of
Southern Agriculture
John J. VanSickle & Robert Emerson
International Agricultural Trade & Policy Center
Food & Resource Economics Dept.
UF/IFAS
Immigration Reform



Intent is to secure the border against
illegal immigrants.
Guest worker programs have been a
priority for agricultural groups to secure a
stable work force.
Currently in limbo as the new Congress
settles in on its agenda.
Florida Farm Labor Market
Changes




Composition – Hispanic proportion grew from
79% in 1989-95 period to 92% in 2002-04
period.
Earnings – increased in real terms from
$7.12/hour in 1989-98 to $8.13/hour in 2002-04.
Legal status – 75% of workers unauthorized in
2002-04 period. Unauthorized workers earned
57 cents/hour less in 1998, but $2.74/hour less
in 2002-04.
Reduced Seasonality – Quarterly data show the
range has declined from 40,000 to 100,000 in
the mid-80’s to 50,000 to 70,000 in later 90’s.
Florida Farm Labor Market
Changes


Florida fruit, vegetable and nursery
growers accounted for 76% of total
Florida farm labor expenses in 1978 for,
but increased to 82% in 2002. Highlights
the importance of labor to specialty crops.
Increase in third party agreements. CIW
and Taco Bell. CIW now targeting
McDonalds.
Threats Related to Agricultural
Labor Market



Stopping the flow of unauthorized workers could
increase the cost of labor in agriculture.
Labor costs could increase as much as 10%.
Some have suggested this could be as large as
30%
Spot shortages of labor could occur when
alternative opportunities are presented.
Example, hurricane cleanup moved some
workers out of agriculture to the hurricane
struck areas, creating some pressure on growers
needing harvesting labor.
Green Peppers: Labor production costs in the
Southwest Florida area 2004-2005

OPERATING COSTS
General Farm Labor
Tractor Driver Labor
Total Operating Cost

Fixed Costs



--$/acre -- --$/box- -%OC- -%TL152.63
277.72
9.06% 13.8%
5,646.83
3,494.68

Harvest & Marketing Costs
--$/acre -- --$/box-- -%HM- -%TLPack
1,600.00
1.60
Pick
1,080.00
1.08
51%
86.2%
Total Harvest & Marketing Cost 4,540.00
4.54

Total Labor

TOTAL COST



3,110.35
13,681.51
25.6%
13.68
Strawberries: Labor production costs in the
Southwest Florida area 2004-2005

OPERATING COSTS
General Farm Labor
Tractor Driver Labor
Transplant Labor
Cut runners, etc.
Total Operating Cost

Fixed Costs





--$/acre -- --$/box-- -%OC- --%TL44.50
283.59
10.6% 5.25%
330.00
150.00
7,612.36
3,858.18

Harvest & Marketing Costs
--$/acre -- --$/box-- -%HM- -%TLPack
8,060.00
3.10
Pick
6,500.00
2.50 100%
94.75%
Total Harvest & Marketing Cost 14,560.00
5.60

Total Labor
15,368.09

TOTAL COST
26,030.54



59.0% of TC
10.01
Spring Tomatoes: Labor production costs in
the Manatee Ruskin area 2004-2005

OPERATING COSTS
General Farm Labor
Tractor Driver Labor
Tie Plants
Total Operating Cost

Fixed Costs




--$/acre -- --$/box-- -%OC- --%TL181.61
305.47
13.3% 14.5%
145.20
4,752.17
2,158.61

Harvest & Marketing Costs
--$/acre -- --$/box-- -%HC- --%TCPack
2,557.50
1.65
Harvest
1,162.50
0.75
70.8% 85.5%
Total Harvest & Marketing Cost 5,254.50
3.39

Total Labor

TOTAL COST



4,352.28
12,165.29
35.78% of TC
7.85
Fall Tomatoes: Labor production costs in the
Manatee Ruskin area 2004-2005

OPERATING COSTS
General Farm Labor
Tractor Driver Labor
Total Operating Cost

Fixed Costs



--$/acre -- --$/box-- -%OC- --%TL181.61
365.94
10.9% 16.9%
5,023.34
2,294.43

Harvest & Marketing Costs --$/acre -- --$/box-- -%HM- --%TLPack
1,815.00
1.65
Pick
880.00
0.80
71.2% 83.1%
Total Harvest & Marketing Cost 3,784.00
3.44

Total Labor

TOTAL COST



3,242.55
11,101.77
29.2% of TC
10.09
Watermelons: Labor production costs in double
crop for Manatee Ruskin area 2004-2005

OPERATING COSTS
General Farm Labor
Tractor Driver Labor
Total Operating Cost

Fixed Costs



--$/acre -- --$/box-- -%OC- --%TL300.88
40.47
24.4% 40.8%
1400.50
697.30

Harvest & Marketing Costs
--$/acre -- --$/box-- -%HM- --%TLHarvest & Pack
496.00
1.55
59.6% 59.2%
Total Harvest & Marketing Cost 832.00
2.60

Total Labor

TOTAL COST


837.35
2,929.80
28.5% of TC
9.16
Labor costs for major specialty
crops in Florida

Watermelons 26,000 acres



Peppers 19,000 acres



Total value $213 million
Labor costs $59.1 million
Strawberries – 7,500 acres



Total value $127 million
Labor costs $21.7 million
Total value $196 million
Labor costs $115 million
Tomatoes – 42,000 acres


Total value $846 million
Labor costs $183 million
Strawberries: Labor production costs in the
Southwest Florida area 2004-2005

OPERATING COSTS
General Farm Labor
Tractor Driver Labor
Transplant Labor
Cut runners, etc.
Total Operating Cost

Fixed Costs





--$/acre -- --$/box-- -%OC- --%TL44.50
283.59
10.6% 5.25%
330.00
150.00
7,612.36
3,858.18

Harvest & Marketing Costs
--$/acre -- --$/box- -%HM- --%TLPack
8,060.00
3.10
Pick
6,500.00
2.50 100% 94.75%
Total Harvest & Marketing Cost 14,560.00
5.60

Total Labor
15,368.09

TOTAL COST
26,030.54



59.0% of TC
10.01
Strawberries: Labor production costs +10% in
the Southwest Florida area

OPERATING COSTS
General Farm Labor
Tractor Driver Labor
Transplant Labor
Cut runners, etc.
Total Operating Cost

Fixed Costs





--$/acre -- --$/box-- -%OC- --%TL48.95
311.95
11.6%
5.25%
363.00
165.00
7,693.17
3,858.18

Harvest & Marketing Costs
--$/acre -- --$/box-- -%HM- -%TLPack
8,866.00
3.41
Pick
7,150.00
2.75
100% 94.75%
Total Harvest & Marketing Cost 16,016.00 6.16

Total Labor
16,904.90
61.3% of TC

TOTAL COST
27,567.35
10.60 (5.9% increase)



Strawberries: Labor production costs
+30% in the Southwest Florida area

OPERATING COSTS
General Farm Labor
Tractor Driver Labor
Transplant Labor
Cut runners, etc.
Total Operating Cost

Fixed Costs





--$/acre -- --$/box-- -%OC- --%TL57.81
368.41
13.3% 5.25%
428.70
150.00
5,646.83
3,858.18

Harvest & Marketing Costs
--$/acre -- --$/box-- -%HM- -%TLPack
10,470.75
4.03
Pick
8,444.15
3.25
100% 94.75%
Total Harvest & Marketing Cost 18,914.90
7.28

Total Labor
19,964.69
65.1% of TC

TOTAL COST
30,627.14
11.78 (17.7% increase)



How Will Growers Adjust
Technology will let some commodity groups
adjust – citrus to mechanical harvesters, other
crops to harvesting aids.
 Some growers will likely shift to other less labor
intensive crops.
The above adjustments will also allow growers to
capitalize on the labor pool that remains.
Strawberry growers may benefit from labor that
shifts out of citrus harvesting.

What growers can do to safeguard
their labor pool?




Pay the market rate for labor. Watch the
labor market like you do your product market.
Be a model employer
Institute a fail-safe method of recording
time that is fair to the employee and your
company.
Plan planting schedules that create a
steady flow of employment throughout the
season. Consider alternative crops (diversify) to
help keep a steady flow of labor needs.
Immigration Reform and
the Competitiveness of
Southern Agriculture
John J. VanSickle & Robert Emerson
International Agricultural Trade & Policy Center
Food & Resource Economics Dept.
UF/IFAS