ACA will raise cost of farm labor--and therefore food

The New York Times reported today about the consequences of the Affordable Care Act (ACA) for the cost of farm labor and, in turn, the cost of food.  Sarah Varney's story is set in California, where farm laborers are typically employed year round rather than seasonally, as the case in many other places.  (Another post about year-round ag workers is here).  This means farm labor contractors cannot easily put the "workers on a 28-hour workweek like Starbucks, Denny's and Walmart are considering" doing to avoid the ACA mandate.  It also means that the contractors, who operate on very small margins--around 2%--will have to raise the prices they charge farms, which will in turn push up food prices.

Varney writes:  

Insurance brokers and health providers familiar with California's $43.5 billion agricultural industry estimate that meeting the law's minimum health plan requirement will cost about $1 per hour employee worked in the field.     

The minimum health plan under the new law will is expected cost about $250 a month in California’s growing regions, a premium which includes a high deductible--$5K a year.  With the following vignette, Varney explains why it is not feasible to pass this insurance costs onto the workers:  

On a recent morning, Jose Romero pulled weeds from a row of lush tomato plants. Mr. Romero, 36, arrived at the field around 5 a.m. and worked until sunset. Like many of the other workers in the tomato field, he was surprised to learn that his employer, Mr. Herrin at Sunrise Farm Labor, would have to offer him health coverage, and that he could be asked to contribute up to 9.5 percent of his wages to cover the costs. 

“We eat, we pay rent and no more,” Mr. Romero said in Spanish. “The salary that they give you here, to pay insurance for the family, it wouldn’t be enough.” 

There seems to be widespread agreement among agricultural employers, insurance brokers and health plans in California that low-wage farmworkers cannot be asked to pay health insurance premiums. 

On this point, Varney quotes a labor contractor, Chuck Herrin, the owner of Sunrise Farm Labor in Huron, California:  

He’s making $8 to $9 an hour, and you’re asking him to pay for something that’s he’s not going to use? 

The most intriguing part of this quote is the "something that he's not going to use" part.  Are Mr. Herrin's assumptions based on perceived cultural issues?  on the age and perceived health of the workers and their families?

Varney also notes the complication that immigration status poses for many of the workers because they may be in the country without papers.  As one farm labor contractor in Napa Valley noted, the workers are 

Nervous they’ll be tracked and then somehow the possibility of being identified, and the fear of being deported or not being allowed to work. It comes up all the time in conversations when we outline the choices.

Cross-posted to Legal Ruralism.

An Overflowing Trough ... and Accompanying Disincentives to Land Stewardship

I published this post last Sunday on Legal Ruralism, but am only now getting it up on Agricultural Law, prompted in part by Susan Schneider's excellent post on the same topic a few days ago.  Here's my post: 

A trough that overflows is the image Robert Semple, Jr., conjures in his editorial (by the same name) in [the June 3, 2012 issue of the] New York Times.  In it, Semple argues that the current version of the next generation farm bill replicates the problems long associated with the farm bill:  it supports fat cat farmers while doing too little to help small-scale farmers.  Semple makes references to "rural" and "small town" in the opening paragraph, but does not return to these concerns expressly later in the piece.  He makes no mention of rural development funds, which have always been a proverbial drop in the farm bill/USDA bucket. [Some sources I have since read indicate no provision has been made for rural development in the current draft of this farm bill].

What Semple focuses on is how federally subsidized crop insurance is increasingly replacing direct payments (a/k/a subsidies).  The lede to Semple's editorial follows:

Every five years or so, Congress promises a new, improved farm bill that will end unnecessary subsidies to big farmers, enhance the environment and actually do something to help farmers and small towns.  But what it usually does is find ways of disguising the old inequities, sending taxpayer dollars to wealthy farmers, accelerating the expansion of industrial farming, inflating land prices and further depopulating rural America. 

Semple goes on to explain how the new farm bill fails to respond to environmental concerns, perhaps even aggravating them.  He concludes by hitting hard on the bill's likely environmental consequences, given that the new focus on federally subsidized crop insurance does not depend on keeping some land fallow; nor does it require farmers not to drain wetlands.  Semple concludes:

Enriched by high prices (at least for now), cosseted by inexpensive insurance, relieved of their environmental obligations, farmers could well be inclined to start planting from fence line to fence line.  That would be a severe blow to the American landscape.  

The "fence line to fence line" comment reminds me of this passage from Wendell Berry's Jayber Crow, just one of several in which Berry contrasts two men's approaches to farming to illustrate conflicting  views of "progress" and the "good life."  The two men, Athey Keith and his son-in-law Troy Chatham, are residents of Berry's fictional Port William, Kentucky:

What I do know is that [Athey] used his land conservatively.  In any year, by far the greatest part of his land would be under grass--for, as he would say, "The land slopes even in the bottoms, and the water runs."  He was always studying his fields, thinking of ways to protect them.  He was doing what a lot of farmers say they want to do:  he was improving his land; he was going to leave it better than he found it.  I know too that his principle was always to maintain a generous surplus between his livestock and the available feed, just as between the fertility of his land and his demands upon it.  "Wherever I look," he said, "I want to see more than I need, and have more than I use."  And this is a principle very different from what would be the principle of his son-in-law, often voiced in his heyday:  "Never let a quarter's worth of equity stand idle.  Use it or borrow against it."  

***

Athey said, "Wherever I look, I want to see more than I need."  Troy said, in effect, "Whatever I see, I want."  What he asked of the land was all it had.  He had hardly got his first crop in the ground when he began to say things critical of Athey and his ways.  "Why, hell!" he would say, "it's hard to tell what that old place would produce if he would just plow it." Or:  "Why the hell would a man plow just forty acres of a farm when he could plow all of it?"  He would say these things leaning back in his chair, his ankle crossed over his knee, his foot twitching.  He was speaking as a young man of the modern age coming now into his hour, held back only by the outmoded way of his elders.  

***

Athey was not exactly, or not only, what is called a "landowner."  He was the farm's farmer, but also its creature and belonging.  He lived its life, and it lived his; he knew that, of the two lives, his was meant to be the smaller and shorter.  

Wendell Berry (with Wes Jackson) wrote this op-ed about the farm bill in the New York Times several years ago.

The photo above is of a farm in Witts Springs (Searcy County), Arkansas, May, 2012.   I offer it up as an example of place that will probably get very little benefit from the farm bill.  Searcy County is a persistent poverty county, and Witts Springs is not even a Census Designated Place.  The community appears mostly reliant on an agricultural economy, principally cattle.  The community sits on a ridge in the Boston/Ozark Mountains, about 16 miles from the county seat, and is the sort of place that would benefit from rural development funds.  The U.S. Post Office at Witts Springs was until recently on the chopping block (read more here and here), and its K-12 school closed several years ago.  I would be very surprised if any farmers in Witts Springs are receiving USDA money, in part because of the size of farms, in part because of what is produced (livestock, not crops).  Another photo from Witts Springs is featured in this post.  

P.S. Here is a story in the June 7, 2012 New York Times re the cost of the government subsidized crop insurance included in the new farm bill.  It details how rising crop prices have led many farmers to plant land that is prone to flooding--and to plant from fence row to fence row, even "where the land slopes and the water runs."  In North Dakota alone, the Times reports, nearly a million acres have become cropland since 2007.  South Dakota has lost nearly a half a million acres of grassland to farming.  Read more of the story at risk of depression.

Marijuana Cultivation Is Agriculture, too. No?

In the four years since I founded Legal Ruralism and started requiring students in my Law and Rural Livelihoods course to blog with me, they have written a lot about marijuana, its production, and its legal regulation in the context of Northern California. Read some of their posts here, here, here, here and here. I more often write about pot in relation to my home county in Arkansas, in my "Law and Order in the Ozarks" series, when the local newspaper reports the drug/plant's seizure in the Sheriff's Report. Some examples are here and here. (Such stories were previously much more common, before meth came to town).

I have typically thought of these marijuana stories in relation to crime and law enforcement, including this story in yesterday's San Francisco Chronicle. The gist of it is that the Mendocino County, California Board of Supervisors voted last week to stop issuing permits for collectives that grow medical marijuana. Doing so will cut revenue at least $500,000, and that money is going to come out of the Mendocino County Sheriff's budget.

That sure sounds like a criminal law/drug policy story, but when you think about it, it's also a an ag law story. After all, the Agricultural Law Blog is chock full of stories about the legal regulation of agriculture--especially federal regulation--and that's exactly what's happening in California as the U.S. Attorneys here declare that regulations like those promulgated by Mendocino County regulations are at odds with federal law.

Further, if my students and their sources are to be believed, pot growing is big business in northern California's more rural counties, including Lake, Mendocino, Humboldt, and Trinity counties in particular. Marijuana--like corn, beans, oats, cotton--is cultivated and sold for cash (albeit often illegally). Indeed, pot is presumably the most significant cash crop in these California counties (and perhaps some others around the nation). In short, it is a serious economic engine of an agricultural variety. This 2009 CNBC story asserts that marijuana accounts for two-thirds of the Mendocino County economy; CNBC's source is a Mendocino County study. Here's a quote from a Mendocino County resident included in that story--a quote that makes the ag law link:

This is as natural as growing corn to me. This is the lifeblood of the county. And it has been for more than 30 years.

In light of the economic impact of pot cultivation, what should we expect from the federal crackdown on medical marijuana and California county governments' responses to it? Probably not a lot. I suppose the federal crackdown is unlikely to have much impact because most marijuana growers will continue to produce--whether or not there is the possibility of distributing their product legally. It may be that the only resulting change is the reduction of funds in county coffers associated with licensing its production.