California’s family farming industry is at a critical crossroads, perhaps one of the most significant in our history. Contentious and often-complex issues such as escalation of the state minimum wage, water storage, ever-increasing operating costs, and stifling regulations, all add up to obstacles that farmers in neighboring states do not have to contend with. In addition, the cost of replacing antiquated equipment like tractors and harvest machines has accelerated ten-fold in the past several years. A tractor that was $80,000 eight years ago is now $380,000.
Small farmers on the Central Coast often lack the resources, personnel and political clout in Sacramento to do much about the issues. The new minimum wage and overtime laws will ensure that California farmers remain uncompetitive with neighboring states. Add to that the amount of vegetable production that now comes from Mexico and the future of the vegetable growing industry becomes bleak. The hourly wage rate for a California agriculture worker is a daily rate in Mexico and no amount of cost cutting can offset that.
In the early ’90s when high-speed packaged salad lines were coming on line, almost 100% of all bagged salads were grown and produced in California (and Arizona in the winter). Today, that number is closer to 50%. At the same time the category was exploding, California was losing those investment dollars and the jobs that go with it to other states because of operating costs. The salad category today has grown to a multi-billion dollar industry at retail.
The last salad processing plant I was involved in was a $55 million investment that employed almost 900 workers. Now, those type of investments are coming on line, but through processing plants in Mexico. Soon the Central Coast will have an even smaller footprint in the industry and the skilled jobs that go with it. A Sacramento legislator once told me the micro-climates needed for growing will ensure the salad industry will always be here. That rationale might work for almonds and computers, but the numbers for bagged salads and processed vegetables prove otherwise.
Labor costs have become one of the biggest drivers threatening the California family farm. California’s minimum wage will be $15 per hour within three years. Neighboring states like Arizona or Nevada minimum wage are as much as $4-per-hour less. On a farm that may require 100,000 man-hours per year to operate, the cost disadvantage becomes significant. Although the vegetable industry already averages well above minimum wage for many positions, when the bottom rises, so does the top to compete with other industries for workers. On top of that, overtime laws are changing such that the daily agriculture exemption for overtime after 10 hours fades away.
All of this may eventually spell doom to the small family farm. Mary Alameda, who grew up on a California farm, wrote an editorial last year in Farm Bureau, Viewpoints, lamenting the loss of family farms.
“For the first time in my life, I fear the future of agriculture. I fear the fields will go fallow,” she wrote in Farm Bureau. “I fear my favorite local fruits and vegetables will become a thing of the past. I fear the extinction of the people and industry l fell in love with. With the current labor situation, we will be abruptly awoken from our farming fantasy. I was once excited to return to the farm I left, but l’m now afraid l won’t recognize it.”
Her fears are well founded, but it doesn’t have to be that way. There are solutions, but perhaps not the political will. But the loss of small family farms hurts all of us, not just the farmer.