The agricultural industry faces the challenge of increased labor costs from a variety of sources. The pressures on farm owners are stemming from a shrinking employee pool, strict labor regulations, and increasing wage requirements. These shifts in the landscape of agriculture are forcing farmers to reevaluate the way they operate. Introducing more innovative solutions is a necessity to stay afloat in the coming years. There are solutions to curb the rising costs and their impacts but it is also extremely important to understand why these changes are happening.
Factors Driving Rising Labor Costs
1. Legislative Changes
Recent legislative changes have had a major impact on labor costs in agriculture. For example, the USDA reports that the Adverse Effect Wage Rate (AEWR) will increase by more than 50 cents an hour and some states will increase by more than a dollar. According to Field Clock, "For the first time, farmers in each region will have an AEWR of more than $14 per hour, with three states exceeding $19 per hour” (Field Clock) States with individual rates are Hawaii, Florida and California. These legislative measures are aimed at improving worker conditions but inadvertently force operational costs to rise and increase the financial burden on farmers.
2. Labor Shortages
The agricultural sector is also experiencing a labor shortage, driven by an aging hired workforce and increasing immigration policies, and declining interest in agricultural jobs among younger generations. According to the USDA, the median age of non-US-born workers has risen by 7 years from 2006 to 2021 (USDA) A large demographic of hired farm workers comes from foreign-born people who have immigrated in search of work - but as other higher-paying jobs are becoming available, the younger generations are not inclined to join the agricultural industry. For example, the US Bureau of Labor Statistics states that the mean annual wage for fast food workers is almost $30,000 (Bureau of Labor Statistics) As there is a smaller pool to hire from, the cost demands rise and the quality of work will potentially be diminished.
3. Inflation
Economic inflation is an issue for our country affecting wages and the general cost of living everywhere. Rising labor costs are directly affected by the struggling economy and while all major expenses increase there is a demand for higher wages to maintain a standard of living. This song and dance will continue as the government attempts to protect workers through increased wages. Despite the good intentions, these policy changes will ultimately add to the cost of production and the products on the shelves.
Impact on Farming Practices
The increase in labor costs is prompting farmers to look once again at their operations and see where they can add innovative solutions to increase efficiency and automate, ultimately moving away from a heavy reliance on manual labor. Here are some of the biggest changes that are being made to alleviate some labor pressures.
1. Automation and Robotics
Automation is transforming modern agriculture. Farmers are increasingly investing in robotic systems designed to handle labor-intensive tasks such as planting, weeding, and harvesting. These technologies not only reduce the need for human labor but also increase precision and productivity, potentially cutting costs in more than one way. For instance, robotic harvesters can operate continuously and handle delicate crops with minimal damage. This shift towards automation is led by the need to keep labor costs low while also maintaining the level of production.
2. Precision Agriculture
The basis of precision agriculture is that the adoption of data and technology can optimize field-level management of crop farming. Some of the ways this is done are with GPS, IoT sensors, and data analytics to monitor crop health, soil conditions, and weather patterns. By utilizing inputs like water, fertilizers, and pesticides more efficiently, farmers can increase crop yields while also reducing costs related to labor. For example, with Phytech’s automation, users are able to relax knowing that the plan they set up for irrigation is consistent, reliable, and optimal. The use of precision agriculture ensures that resources are used effectively.
3. Training and Up-skilling
There will always be labor-intensive jobs, and to ensure profitability and production it is key to invest in the workforce. Employers must create an emphasis on training and advancement opportunities for farmworkers. They can increase their productivity while also reducing the overall cost of labor. Skilled workers can manage and maintain advanced agricultural tools, ensuring that farms operate smoothly and efficiently. By developing a skilled workforce, farmers can maximize the benefits to their farms and the industry as a whole.
Comments