May 15, 2014

Nebraska grower wants H-2A fix

Andy Daniels has seen enough.

The Columbus, Nebraska, vegetable grower has tried everything he can think of to ward off obstacles being erected by U.S. Department of Labor (DOL) officials, who are making it difficult to compete equitably in the marketplace, he said.

Diversified vegetable crops

Daniels Produce is located in Platte County, in the east-central part of Nebraska. Daniels and his wife, Tannie, own and operate the farm. A University of Nebraska graduate, Daniels has been working with Tannie for nearly 40 years. The couple is joined in the operation by their daughter Kelly, who is the office manager; and son Jason, the general manager of product.

“In the 1980s, we diversified into fresh-market vegetable production due to a lack of opportunities for conventional farming,” he said.

The business quit raising feed corn and soybeans in 2002. Today, Daniels Produce raises close to 600 acres of vegetables.

In the early 1990s, Daniels Produce began to sell its sweet corn wholesale to other produce vendors and a few grocery stores. Daniels said 85 percent to 90 percent of the harvest is sold through wholesale sources. Most of the produce is distributed throughout Nebraska, Kansas, Missouri, Texas and Florida. Produce also is sold at six retail farm stands in the region.

This year, Daniels Produce will grow 380 acres of sweet corn, 80 acres of cabbage, 40 acres of bell and jalapeño peppers, 20 acres of cucumbers and 25 acres of mini squash, gourds and pie pumpkins. The farm also produces 3 acres of watermelons and the same amount of cantaloupe. It has 12 greenhouses and a germination room for developing crops such as cabbage and bell peppers.

H-2A challenges

In order to effectively operate at harvest, Daniels needs about 75 H-2A workers. One of his main gripes about the H-2A program is what he sees as a disparity in the Adverse Effect Wage Rate (AEWR) established for his state. AEWR is the minimum wage that DOL has determined must be paid to U.S. and alien workers by employers of non-immigrant H-2A workers.

Where agricultural employers offer employment to non-immigrant foreign workers, payment of at least the AEWR is required. Essentially, the AEWR sets a separate minimum wage rate (in other words, a rate that will not adversely affect the employment opportunities of U.S. workers) for each state.

“Our obligatory offered wage rate to our employees during our five years of participation in the H-2A program has gone from $8.36 an hour to $13.41 an hour for 2014, a 62 percent increase,” Daniels said.

“Nebraska, along with three other states in the northern plains region, has the highest rate in the U.S., and it is a full $2.30 an hour higher than the AEWR average,” he said. “Is anyone naïve enough to think we can pass along such costs and still sell our product and compete in interstate commerce with states with lower wage rates? Where does this wage come from – how to do we compete; how do we survive?

“A nationwide Adverse Effect Wage Rates need to be set and it needs to be changed now,” Daniels said. “A workable guest-worker program needs to be introduced and the H-2A program, with its ridiculous hoops and red tape, needs to be twilighted out.”

Daniels has written letters to U.S. legislators and had conversations with state and national agriculture officials regarding his concerns.

“This is a highly labor-intensive occupation,” Daniels wrote. “The state of Nebraska has maintained a 4.5 percent unemployment rate right through the recession we just encountered. The county I live in, Platte County, maintained an unemployment rate of 3.5 percent. We live 100 miles from Lincoln and Omaha, so to find a workforce we have not only gone to the bottom of the barrel; but a few feet below that.”

Due to the lack of a reliable labor force, Daniels said he turned to the H-2A program in 2009.

“Not only did we want a reliable source of labor, but one that was documented and legal, and that is what we obtained,” he said. “When we entered into the H-2A program, we got something amazing that we had never had before: the best employees we have ever hired in 25 years of vegetable production. Those amazing employees and our complete lack of an alternate option is the reason we are now entering into our sixth year in the program. But we have had extreme and costly battles with the program from the start.”

Participating in the H-2A program was a more expensive route of hiring the 50 people “we need to plant and harvest our crop,” Daniels said. “From the beginning, we found this to be a very difficult and expensive program, but to our dismay it has now turned into a prohibitively expensive bureaucratic nightmare.”

It’s his belief that the increased AEWR wage rates, along with inspection crackdowns on farms by the Occupational Safety and Health Administration (OSHA), are being undertaken to put pressure on growers to lobby legislators for passage of controversial immigration reform measures.

DOL audited Daniels’ operation in April, he said.

“This is my first audit with OSHA, the Department of Labor, and it’s going to cost me a lot of money,” Daniels said. “I spent the winter working on this (H-2A) issue, and now I get audited.”

His disputes with DOL have included a court case in which he and a group of growers successfully sued the department because of a provision stating that, in the case of a natural disaster (in his case, two hailstorms) impacting his laborers’ employment, his farm was required to pay 75 percent of their wages or find them another job.

“My big problem three years go was (DOL) denied my harvest crew four days before they were coming here. They had added a sentence to the application that I filled out two months before that. I had to resubmit and reapply. Me and six other farmers took them to court. With the help of our state senator, we got a settlement in 38 days. The federal judge says they were wrong in doing it to us.

“We lost our crop for 38 days,” he said. “We lost $400,000 in 38 days, in a state where the unemployment rate was 4.5 percent and the county’s was 3.5 percent – fully employed. Who’s going to come to Nebraska to pick our crops?”

Daniels said that because field corn and soybean prices skyrocketed a few years ago, his land value followed suit.

“I was able to sell two-thirds of my 110-year old family farm at a high price, which allowed me to continue to operate,” he said. “Three years of government regulations, interference and H-2A cost increases took its toll.”

Despite the “overbearing” conditions, Daniels said he is fighting hard to remain a player in agriculture.

“I love farming,” he said. “I had a neighbor stop in and told me they couldn’t believe I could keep putting up with all of this. I love doing this; this is my passion. When I was a kid I used to put cans on the windowsill and grow beans. I saved peach and watermelon seeds and planted them.

“I just love doing what I’m doing,” he said. “I don’t need to make any money. My biggest fear is not being able to do it anymore. I’m 61. My daughter and son farm on the same place, and my son doesn’t know if he wants to do this. I know I can’t sleep at night.”

– Gary Pullano