.The Impact of Santa Cruz County Agriculture’s Labor Shortage

[dropcap]D[/dropcap]ick Peixoto, CEO of the 2,000-acre Lakeside Organic Gardens in Watsonville, checks calls that come in on his smart watch as we chat in a conference room in a rural part of Watsonville. The soil-stained carpet is evidence of meetings he’s already had that day with his farmers and managers.

Patient and friendly, with a neat grey mustache, Peixoto (pronounced pay-sho-toh) rambles a bit as he discusses the current state of the ag industry in Santa Cruz County. But when asked if he’s been affected by the labor shortage that many farmers are facing throughout California, he gets right to the point: at the height of summer, he says, he loses 5 to 10 percent of his crop yield every day because he doesn’t have enough workers in the field. Deciding what not to pick has become part of his daily routine.

“Every day I sit down with my guys, and we draw up a plan of what we’re going to do in the field at 6 o’clock every morning. We decide what we’re going to irrigate, cultivate, fertilize and everything down the line. When that meeting is done, the harvest crew comes in. The salespeople send over a sheet that says, ‘This is what we want to harvest today,’ and that’s based on what we tell them we have to harvest. We’ll look at that and say, ‘We don’t have enough labor to do this, this and this, but the market is cheap on carrots today, so we’re going to leave carrots in the field,” he explains. “Every day in the summertime we have to leave some crops behind because there’s not enough labor to harvest it all.”

Santa Cruz County farmers, like those in every growing region throughout the state, are enduring an escalating labor shortage that’s forcing them to abandon ripe crops—especially at the height of summer, when competition for labor is the most fierce. A study from the California Farm Bureau conducted in the summer of 2017 showed that 55 percent of farmers surveyed had experienced employee shortages across all areas of production—planting, cultivating and harvesting—and were unable to secure up to 50 percent of their seasonal workforce, despite heavy recruiting, and offering higher wages and other incentives.

This is a drastic change from the abundant labor force the California agriculture industry has enjoyed since World War II, when the Bracero Program was initiated to attract workers from Mexico to work in the fields and on the railroads. Though the program officially ended in 1964, immigrants have dominated the labor force for large and small farms ever since. Today, the U.S. Department of Labor estimates that 75 percent of agricultural workers are born in Mexico, and more than half of them are not authorized to work in the U.S.

The 61-year-old Peixoto, who has farmed in the Pajaro Valley since he was 17, says that for the first 35 years of his career, the labor force was so abundant that workers would stand at the edge of the field hoping to be hired.

“We could hold up our hand and 10 guys would come,” he says. “I’ve never seen anything like this. We’ve tried to eliminate [the size of the workforce] in the past just for cost savings, but we’re in a whole different world now, where we need to do it just to survive.”

BORDER OF BUSINESS

Peixoto owns another 1,000 acres in Imperial Valley in Southern California, and says that while the issue is pervasive across the state, certain conditions like housing availability are making the labor shortage more acute in Santa Cruz County. While most of the workers in the lower part of the state live in Mexicali and go back and forth across the U.S. border every day, that commute becomes impossible the farther north you go. “Up here it’s a whole different story, because all of our labor has to live here close to the farms,” says Peixoto.

Mexico’s economy has also improved in recent years, dissuading many would-be migrant workers from crossing the border, especially since it was tightened under the Obama Administration. Since Trump took office, policymakers in Washington have increased a sense of fear and anxiety about deportations among undocumented farmworkers. According to the U.S. Immigration and Customs Enforcement, the agency conducted 143,470 arrests of aliens in 2017, the most in the last three years. Deportations resulting from ICE arrests increased 27 percent from 2016.

Lauro Barajas, national vice president of the United Farm Workers, and regional director of the UFW for Santa Cruz, Monterey and San Benito counties, says that the increased fear of deportations has had a chilling effect on the normal seasonal movement by workers to different farms at different harvest times.

“Workers try to stay in one place, and aren’t moving around as much as before,” says Barajas. “Before, workers used to finish one crop and move to the other, but now they aren’t as much.” Farmers surveyed by the California Farm Bureau also reported that in addition to difficulty recruiting and retaining a workforce, agricultural employers now have to contend with an atmosphere where employees worry about being stopped, detained and threatened with deportation as they travel to their jobs.

Meanwhile, the ag workforce is also aging, without a new generation taking its place. Many younger workers from Mexico who come to the U.S. are choosing less physically demanding jobs in the construction and hospitality industries—both of which are also experiencing a high demand for labor, and pay comparable wages.

Even offering higher wages, farmers have not been able to attract non-Latino employees. “It’s hard work, let’s be honest,” says berry farmer Peter Navarro. “In the years that I’ve been in farming I’ve only had two or three non-Hispanic workers. They go a couple hours and can’t take it. I had one that went four days. It’s a hard job. We try and make it as safe as it can be, but it’s fieldwork at the end of the day. You even have second-generation Hispanics, kids whose parents did this work, that are looking elsewhere.”

WEEDED OUT

Competition with cannabis farms has caused further stress on the industry. Local vegetable and berry farmers are raising concerns that while cannabis growers are drawing from the same labor pool, they’re not on a level playing field with other agricultural crops and legalization will only compound this issue.

Navarro, who farms 93 acres of strawberries and 90 acres of blackberries and raspberries in the Pajaro Valley, states that in addition to being physically easier to grow and harvest than other crops, cannabis growers can pay considerably more. “They pay cash—we don’t. Our payroll is all by check. With all the deductions we have to make, they’re able to pay a higher hourly wage. We’re very concerned,” says Navarro. While paying in cash has traditionally been prevalent because of the secrecy of cannabis grows, as of Jan. 1, 2018 cannabis farmers are subject to the same payroll stipulations as other employers.

In Santa Cruz County, berries are one of the most labor intensive crops, and also one of the most lucrative for both workers and farmers. Berry farmers, like many other growers in the state, pay a “piece rate” on top of an hourly wage that pays relative to the volume of produce picked in order to incentivize productivity. According to the Bureau of Labor Statistics, most farmworkers were paid an hourly wage of at least $10-$10.50 per hour in 2017. Workers who are paid piece rate earn around $14 an hour on average, but for labor intensive crops like berries a skilled worker can earn as much as $25 to $30 per hour in a well-tended field at peak harvest.

As a result, one way farmers are competing for workers during peak harvest has been to attend to their fields so that workers are able to achieve these higher piece rates by breeding large, easily visible berries in consistent numbers.

“You try to keep your field as attractive as possible by having a good clean crop with a healthy plant that will have an abundant crop to attract workers. They go around and look at fields, and if they look good, they may ask if you have a job available. If you don’t have a good looking field with a lot of healthy plants, people will look for a job somewhere else,” says Navarro.

Aesthetic issues aside, fellow Watsonville berry farmer JJ Scurich has already seen valued employees lured away by cannabis. “We’ve lost some of our best, quickest piece rate employees that were making in the $25 to $30 per hour range in the summer. They were able to get more attractive cash-paying jobs in the [cannabis] greenhouses. Everyone’s been having some kind of experience like that. We have cannabis operations closer to our fields. It’s definitely attracted some of our labor force away from us.”

Gelacio, a 27-year-old farm worker, has worked at the same Santa Cruz County strawberry company for the last five years. He told GT in Spanish that he has not considered working for a cannabis farm and believes that if he or other workers at his company did, his employer would likely increase their wages to entice them to stay. Gelacio already receives a medical plan, paid holidays and a pension plan, and believes that his employer will need to continue to pay at least a dollar over the increasing minimum wage in order to compete with cannabis farms.

The company that Gelacio works for has not been significantly affected by the labor shortage and so far has been able to complete the work with the staff on hand, although he admits that they occasionally work on Sundays in order to finish picking berries. He says that he has not felt threatened by ICE officers because he lives close to work and doesn’t need to drive very much.

In response to the shortage, Navarro, like other farmers in the area, has reduced his acreage from 130 acres of strawberries to 93. “What’s the point of growing that amount if you can’t get to it?” he says. As a result of the labor shortage, he predicts that more production is likely to move out of state to meet market demands. Because California has the strictest food safety regulations in the country, Navarro worries that importing agricultural products from other countries may pose a safety issue, in addition to being more expensive. “It’s a shame because this entire coast of California is the best growing area for strawberries and a lot of fruits and vegetables. We’re very lucky to have an area that can produce such high-quality fruits and vegetables, but there’s areas of the market that are driving things out.”

TECH FUTURES

Farmers are looking toward new technologies for help, and machines to aid all areas of production are creeping their way onto the market. Some local lettuce farmers are already using a water knife to cut romaine hearts, tripling production over hand labor. Martinelli’s, the largest apple grower in the Pajaro Valley, is experimenting with machines that shake ripe fruit to the ground.

Perhaps the most valuable technology is in development in the strawberry industry. The most lucrative edible crop in Santa Cruz County, strawberries brought in more than $229 million in 2016, according to the most recent Crop Report. Raspberries ($158 million) and blackberries ($51 million) were the second and third most valuable crops. Many of the farmers interviewed for this story said that Driscoll’s is leading the charge with berry tech, and understandably so—the fourth-generation Watsonville-based company controls about a third of the six-billion-dollar U.S. berry market, including 60 percent of organic strawberries. Driscoll’s is said to be developing a system for growing berries on table tops that works like a house gutter, with berries grown at waist height that fall to the side, making them easy for a human hand or machine to pick. The L.A. Times reported in July 2017 that Driscoll’s is also investing in a robotic strawberry picker, the AgroBot, that is currently being developed by Spanish inventor Juan Bravo. Bravo’s website boasts that the cutting-edge technology will feature real-time artificial intelligence to determine fruit ripeness and 3D sensing and customizable adaptations, but a market-ready prototype, by all accounts, is still a long way off. Driscoll’s did not respond to numerous inquiries about their tech projects.

“Our berries are so delicate that there’s really no avoidance of the human touch to place them in their packaging with minimal damage.” — JJ Scurich

Peixoto has also been looking into harvesting machines that have the potential to reduce his need for labor by 30-40 percent. But he isn’t taking the $65,000 to $250,000—or more—costs lightly, and admits that such investments are out of the question for most local farmers. He believes that Driscoll’s and other large growers that can afford to purchase these machines will end up renting or leasing them and their growing technologies out to other farms.  

Peixoto emphasizes that they are not replacing people with these machines—they’re replacing labor that they don’t have. “They won’t eliminate the labor, but they’ll reduce the labor. We take for granted that we have a labor force that will do this harvesting, and they always have. But that labor force is dwindling, and you have to look down the road and realize it’s not going to cure itself. It’s not like we’re going to wake up two years from now with all the labor we need.”

Even so, a more immediate and sustainable solution is needed now. Says Navarro, “Simple economics tells you that we need to try to find an alternative. As the minimum wage keeps going up, it’s going to become very, very difficult to grow agriculture. You have to try alternatives. Robotics is being worked on, but it’s down the line. It’s not something you’ll see next year or even two years from now. It’s a process and it will be very expensive. How many smaller growers will be able to invest in something like that?”

A HUMAN TOUCH

Scurich remains skeptical that a strawberry harvesting robot will ever match the dexterity of the human hand. “Our berries are so delicate that there’s really no avoidance of the human touch to place them in their packaging with minimal damage,” he says. He would rather see something on the market that would help the harvester, not replace them.

Mechanization is not a viable option for many small farms, says Tom Broz of Live Earth Farm, not only because of the financial burden but because of their size. He grows about 50 different crops throughout the year on a 45-acre organic farm in Green Valley, nestled against the Santa Cruz Mountains, and mechanization for him would be very difficult. “We’re organic, we’re vegetables and it’s small scale. We can’t invest in a very expensive harvest machine if we’re only growing two to three acres of that crop,” he says.

However, Live Earth’s small size does allow him to more easily adapt to market changes, and during the height of the season he plans to change his growing schedule to plant fewer labor-intensive crops. During that time, Live Earth will grow fewer vegetables that require bunching, or need to be dug up and washed, like cilantro, radishes, carrots, beets and chard, and more crops that are easier to pick at a higher volume, like tomatoes, peppers and eggplants.

Broz makes an effort to employ a permanent workforce as much as possible, which is sustained in part by their CSA program and farmers markets. Because he has steady employment to draw from, he says he hasn’t experienced the same kind of fluctuations as other farms have.

“A lot of our workers are husband and wife teams, so we try to commit ourselves to employ at least one member of the family throughout the year,” he says. “We’re a smaller operation, with less workers but more specialized and diversified. The workers we need need to be more specific in what their responsibilities and skills are.”

But he has struggled to bring in seasonal labor during the time-sensitive harvest season, especially if there’s pressure from the weather. During a heat wave last summer, he was unable to bring on enough extra labor to harvest crops before they became damaged.

While every farmer has to make different decisions based on their land, market, production and labor situations particular to their operation, he believes that in order to ensure the future of Santa Cruz’s farming industry, farms will need to provide benefits to their workers, including housing. Broz already provides 70 percent of Live Earth workers with permanent housing, and says other larger growers in Monterey have built their own farm worker housing and have been able to retain a more stable workforce. According to the California Farm Bureau, farmers throughout the state are increasingly seeking to retain more of their workforce year-round as a way to ensure that there are employees on staff for peak times.

Additionally, he believes that a viable guest worker program is absolutely necessary. “It would benefit us tremendously to be able to bring workers in from other parts of the world. We need to streamline and have a program that works for agriculture and for the workers coming over that we can track and have some kind of accountability. That’s not existent right now because in our history of how we have employed ag workers, there has never been the political will to invent something that’s more streamlined.”

GETTING ORGANIZED

A guest worker program currently exists, but is not popular among California farmers. The H-2A program allows U.S. employers to bring foreign workers to the United States to fill temporary agriculture jobs if the employer can ensure that there are not enough U.S. workers who are able to do the temporary work, and that bringing in such workers will not adversely affect the wages or working conditions of similarly employed U.S. workers. However, according to a CFBF survey, fewer than 3 percent of responding farmers use H-2A workers. The local farms featured in this story fall into the 97 percent that don’t. Farmers complain that the program doesn’t meet their employment needs because it’s difficult to ensure that they will receive a worker with the appropriate skill set to harvest their particular commodity.

The process is also bureaucratically difficult and expensive. Farmers are required to house their H-2A workers, and in Santa Cruz County that can be especially difficult and costly. They can also create tension with domestic crews, who may become disgruntled when they realize that H-2A workers receive benefits that aren’t offered to them, like housing and a ride to work.

Because of their shorter growing season, berry farmers are unable to hire workers year-round. For farmers like Scurich, a comprehensive guest worker program is essential. “It’s no secret that our immigration system is really broken. The H-2A program is not a well-oiled machine and it’s difficult to get people that you request when you need them. I think the only thing that’s going to help is improvements to the immigration system or a guest worker system that’s more effective than the H-2A program currently is.”

Barajas says he hopes that farmers will consider investing in workers that are already here before possibly displacing them through guest worker programs. Now that there’s real competition for workers, the companies that employ them need to improve wages and benefits to maintain them.

“I live in Salinas. The cost of housing is really expensive in this area, and companies aren’t willing to pay enough for the cost of living,” says Barajas. Workers now have the advantage to demand better wages and benefits, or they’ll go to another company. However, even with this pressure, some farmers have been slow to react.

“I don’t see that at this point that workers are willing to work for the minimum wage. Workers understand that this is their opportunity and they have an opportunity to leave to a different company,” says Barajas.

Barajas cites Swanton Berry Farm as an example that other farms could emulate. The 80-acre organic farm is famous as the first certified organic farm in the U.S. to sign a labor contract with the UFW and offer its workers an employee stock ownership program, in addition to health insurance, vacation and holiday pay, low income housing on site, pensions and other benefits. While some farmers have already integrated some of these benefits, for others it would require a significant change to operations.

Looking toward the future, Peixoto believes that more needs to be done to encourage younger generations to pursue careers in agriculture, an industry that he feels has not earned its bad reputation.

“I really feel like agriculture gets a black eye. But there’s a lot of opportunities in agriculture. Agriculture is changing. We have GPS-guiding tractors and GPS mapping fields and [we’re] flying over them with drones and using automatic irrigation pumps—a lot of technology,” says Peixoto. “We’re going to need more people on a higher level to keep us on course.”

Inspired by this vision, Lakeside Organic Gardens has put aside $2 million into a fund to start a sustainable and organic farming education center. While it’s still in the planning stages, Peixoto hopes the center will educate school age children about opportunities in sustainable agriculture, be a “clearinghouse of information” to teach the next generation how they can own and manage farms, and educate the community about the value of agriculture and the accomplishments of the local industry.

“There are many farmers in this valley that are really committed to their labor force,” he says. “They don’t look at the labor force as a tool; they look at it as their partner in business.”

In his Watsonville restaurant, California Grille, the first thing customers see when they walk in is a huge glass etching of farm life in the valley. “It’s a way to honor the unspoken heroes of the valley, and that’s the farmworkers,” says Peixoto. “They don’t get enough praise. People talk about ‘bad immigrants’ and ‘illegal aliens,’ but they don’t realize that they’re what makes this whole valley go. They’re the locomotive that pulls the train all the way down. You can talk about the mayor or the senator, but they’re the guys that make it happen. If you talk to farmers in this valley, you’ll find that a lot of us are committed to our labor force and we want them to grow as we grow.”