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Increasing regulation, pending immigration, healthcare issues cloud Florida labor picture

Rising wages, a shortage of workers and the impending implementation of the Patient Protection and Affordable Care Act — “Obamacare” — have the Florida agriculture community concerned about a scenario that could play itself out time and again this spring as deals come on in other growing areas, particularly across the Southeast.

Still, the state’s crops are in good shape with decent markets. Agricultural production is on the rise, driven in part by an influx of investment from businesses in other Southeastern states and California. Excluding tomatoes, acreage of Florida crops and commodities increased by between 400 and 1,200 acres from 2011 to 2012, according to the U.S. Department of Agriculture. And as production ramps up through April and May, most Floridians believe the climate is ripe for political change and are hopeful projected labor shortages and the impact of Obamacare will not be as fearsome as thought.

“In this job you have to be optimistic,” said Mike Stuart, president of the Florida Fruit & Vegetable Growers Association in Maitland, FL. “You can always go out there and look at an individual situation or challenge and get pretty frustrated by it, but at the end of the day we’re dealing with a product that helps people stay healthy and live long, productive lives. We’re in a production window that is unique to the U.S. — I wish it was unique in the broader marketplace, certainly we have our global and regional competitors — but we are in a good spot geographically, we have a good market window, we’ve got world-class breeding talent at the University of Florida as well as people there who can help us fight some of our pest and disease issues, so I’m on the optimistic side of the scale. Always.”

Labor is the most pressing concern for Florida grower-shippers. Despite a state minimum wage that has risen from $7.25 in 2011 to $7.79 this year — 54 cents higher than the federal minimum — and rising wages in the field, workers are at a premium this spring, as has increasingly been the case since 2011.

More money is apparently not the answer to the problem. According to Fritz Roka, associate professor of Agricultural Economics at the University of Florida Institute of Food & Agricultural Sciences, since 2004, piece rates for Florida tomato and citrus harvesters have increased by more than one-third. The average hourly salary for all Florida farm workers grew from $9.98 in 2007 to $11.43 last year. Field worker pay rose from $9 an hour to $10.35 over the same time period.

Both are well above the minimum wage and the Adverse Wage Effect Rate (the level set by the federal government to encourage domestic workers to take jobs that might otherwise be offered to foreign guest workers) of $9.54 as the baseline for H-2A work visa programs.

Florida needs “a small army of workers,” Dr. Roka said. As recently as January 2003, there were 70,000 farm workers in Florida. That number had shriveled to 50,000 in January 2013, just a decade later.

“There were significant labor shortages for Florida strawberry growers this season. It affected total production and in some cases, quality suffered because growers fell behind. There were a significant number of fields that were dropped by early February when the crop hit its peak,” said Gary Wishnatzki of berry and vegetable grower Wish Farms in Plant City, FL. “If there isn’t groundbreaking legislation to address this nationwide problem, many growers will be forced to turn to H-2A [visa] programs. For most growers, H-2A has been viewed as a last resort because of cost and administrative issues. We are hopeful that Congress will act, but if they do not we are preparing to implement a guest worker program.”

Florida Fruit & Vegetable Association Director of Labor Relations Mike Carlton estimated that 40 percent of the 2011-12 citrus crop was harvested by H-2A workers and believes that percentage will be shown to have increased this season.

But H-2A is notoriously cumbersome and of little benefit to any but the larger grower-shippers. Contractual terms are limited to 10 months and government oversight and regulation is fierce.

Florida may get help from inside its own borders.  Sen. Marco Rubio (R-FL) is a member of the so-called “Gang of Eight,” the bipartisan group of U.S. congressmen tasked with overhauling immigration matters.

“I’m not going to be a part of a bill that doesn’t create a process so people can come temporarily to work if we need them,” Sen. Rubio told the website Politico in late March.

Said U.S. Rep. Tom Rooney (R-FL), a former member of the agriculture committee who now sits on the agricultural appropriations committee, “My idea of a worst-case scenario would be that an enforcement mechanism like eVerify is put in place, without a guest worker program. Then you’ll see what we’ve already seen in places like South Carolina and Georgia, where farmers are being told they can’t have this labor, but they can’t find anybody else that will do the job. At that point, we wouldn’t be able to get crops picked and to the table and that would be a national security issue. I feel like I am in Washington on behalf of the farmers I represent. So whatever plan comes out has to be acceptable to them.”

Meanwhile, the specter of the healthcare law also looms large and has sparked bickering among Sunshine State leadership.

Said Mr. Stuart, “The implementation of Obamacare is really going to affect people beginning Jan. 1 of next year. We’re working internally within our organization and trying to do everything we can to help prepare our members for that but it’s going to be a significant challenge and one I’m concerned about. The complexity of the law is significant and you almost have to go and look at every individual operation to really figure out what the impact is going to be and what we’re trying to do now is assist our members in doing exactly that. There are a lot of variables, but in some cases it can be very expensive.”

Florida Commissioner of Agriculture & Consumer Services Adam Putnam blasted Gov. Rick Scott in an email circulated around the state for the latter’s recent proposal that Florida support Medicaid expansion as part of Obamacare, the cost of which will be absorbed by the federal government for the first three years. Gov. Scott has said he is favor of taking the three-year freebie and then re-evaluating.

The decision drew the ire of Commissioner Putnam and other state Republican leaders because Gov. Scott ran for office on a platform built in large part on opposition to healthcare reform.

The commissioner said increasing Medicaid rolls would be irreversible, and that such a move would increase the pool of eligible Floridians to more than 20 percent of the state’s population and cost Florida taxpayers billions of dollars.

“In three years, you don’t get a do-over just because it sunsets, which is a classic Tallahassee or a Washington bait and switch. You don’t get a do-over once you’ve enrolled 1.3 million new people,” Commissioner Putnam said in a recent address to members of the Florida Retail Federation. “You don’t get to say, ‘Sorry it’s sunsetted, we’re booting you off the rolls.’ You get one chance to make this decision. With over three million Floridians already enrolled in Medicaid, Florida cannot afford to foot the bill for millions more.”

The commissioner later tweeted that “the expansion of Medicaid in FL does not create jobs or strengthen any. And it will cost Floridians $5B over the next 10 years.”

Meanwhile, Mr. Stuart remains optimistic, due in no small part to the land grant University of Florida’s IFAS, which steadily pumps out new product to provide royalty streams and give Florida farmers a competitive edge. Increasingly these days, IFAS is focusing on coming up with crops that can better be harvested mechanically — and better mechanization to harvest current crops.

“Keep an eye on the University of Florida,” Mr. Stuart said. “If you look at the growth and development of new commodities and industries in Florida, most of the time the development of those industries has resulted from some phenomenal work in breeding and other areas done in IFAS. If you want to take a look at the future, take a look at what IFAS is doing and I think you’ll get a good glimpse of where we’re heading.”