LANSING, Mich. (Michigan News Source) – The landscape of Michigan agriculture is undergoing significant changes with more farms relying on the H-2A visa program to address labor shortages. As the economics of farm labor shift, the program’s increasing popularity is both a solution to labor shortages and a new source of financial strain.

What is the H-2A program?

Historically, the H-2A program, initiated during President Ronald Reagan’s tenure in 1986, was designed to supplement the American agricultural workforce with migrant labor during peak seasonal demands without displacing American workers.

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According to The Detroit News, however, David Bier of the Cato Institute points out a growing trend: “Very few U.S. workers are entering agricultural jobs, especially seasonal farm jobs. It doesn’t make sense for us to be pushing U.S. workers into temporary seasonal jobs over year-round permanent employment.”

This shift comes at a time when the number of older agricultural workers, including U.S. citizens and long-term unauthorized immigrants, is increasing, leading to more retirements and creating gaps that farms are struggling to fill domestically. As a result, Michigan farms have turned to the H-2A visa program more frequently, although the number of workers declined for the first time in over a decade last year, according to data from the Department of Labor charted by Grant Schwab.

What is the “adverse effect wage rate?”

One of the central mechanisms of the H-2A program is the “adverse effect wage rate” (AEWR), which is intended to prevent the undercutting of American workers’ wages by setting a minimum wage for migrant laborers. The U.S. Department of Labor calculates the AEWR based on regional data from federal surveys on farm labor and wages. Since 2008, while average private sector wages in Michigan have increased by approximately 45%, the AEWR has surged by about 85%, outpacing both inflation and general wage growth.

This substantial rise in the AEWR has contributed to increased labor costs for Michigan farmers, who are already contending with competition from low-cost foreign agricultural products. As countries with lower labor costs produce cheaper agricultural goods — thus making their products more attractive in global markets — Michigan farmers must manage these elevated labor expenses while remaining competitive against a tide of low-cost foreign imports, which squeeze their profit margins and threaten the economic viability of their operations.

This situation forces many farmers to reevaluate their crop choices, invest in labor-saving technologies, or even consider reducing their scale of operation to maintain financial sustainability.  In response to these challenges, a federal bill was introduced earlier this year aiming to temporarily freeze wage increases in the H-2A program through the end of 2025, providing potential relief for farmers facing financial strain.

What’s going on in Congress?

Similarly, Democratic Representative Elissa Slotkin (D-Lansing) is backing the bipartisan Farm Workforce Modernization Act, which seeks to halt wage increases until 2025 and limit the annual growth of the AEWR to 3.25%. This act also seeks to create a pathway for certified agricultural worker status for H-2A workers, granting them legal residency for five and a half years and ensuring reentry to the United States after international travel.

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As policymakers debate the future of agricultural policies, the future of Michigan’s agricultural sector hangs in the balance, with potential legislative changes poised to either alleviate or compound the challenges faced by farmers. The outcome of this legislative effort could very well determine whether family farms, which have been a staple of Michigan’s economy and cultural heritage, can survive in the modern economic climate.