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Farm Labor and Mexican Produce Exports

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Mexican Fruit and Vegetable Exports and Farm Labor

May 3, 2018

About half of US fresh fruit (53 percent in 2017) and a quarter of US fresh vegetables (31 percent in 2017) are imported. Mexico supplied 48 percent of the imported fresh fruit and 68 percent of the imported fresh vegetables in 2017. The US imported $11.6 billion worth of fresh produce from Mexico in 2017; 53 percent was fruit and 47 percent was vegetables.

The Los Angeles Times published a four-part series December 7-14, 2014 documenting forced labor, debt peonage, and poor living conditions of some workers on Mexican farms that produce tomatoes and other commodities for US consumers, suggesting that Americans are benefiting from the exploitation of Mexican farm workers.

Data are scarce. Up to 10 percent of the two to three million hired farm workers on Mexican farms are internal migrants who leave their usual homes and live temporarily on or near the farms where they work for three to six months. Many of these migrants are indigenous non-Spanish speakers who are recruited in poor areas, given pay advances of $50 to $100, and promised daily wages of $10 to $15 a day for six-day work weeks. Migrants also receive housing and transportation to the fields where they work.

Three themes dominate farm labor discussions in Mexico in 2018: worries about sufficient labor for expanding exports, frustration with the cost of formal employment, and fears of top-down supply-chain and political pressure to improve wages and working conditions.

First, many growers in Mexico’s expanding fruit and vegetable export sector report difficulties finding local workers at prevailing wages, which are 200 pesos or $10.70 a day in the Jocotepec berry area bordering Lake Chapala in Jalisco, well above the 88 peso ($4.85) minimum wage. Harvest workers earn piece rate wages and average 300 pesos ($16) a day or more, giving them an incentive to work fast, but the number of local workers is falling and the share of migrants is rising as local workers find year-round jobs.

Most migrants are recruited in poor areas and bussed to temporary housing for three to six months. Most are young men, some do not speak Spanish, and there are often tensions between 100 or more solo men and established families in local communities. Some growers believe that local 16 and 17 year olds could and would do farm work, but the Mexican government insists that hired farm workers be at least 18.

Second is frustration over the cost of hiring farm workers legally. Mexico has several employment-related benefit programs funded by employer and employee contributions, including IMSS, Infonavit, and wage-risk premiums that total 22 percent of wages. The complaint of farmers (and some workers) is that there is no accounting by the government of these taxes, which are made in the names of employees. Migrant workers get few benefits from these government-run programs because IMSS does not have health care facilities in migrant areas of origin and migrants do not earn enough to benefit from Infonavit housing subsidies or the government’s pension system, employers are tempted to avoid paying employment-related taxes.

Fewer local workers and frustration with payroll taxes sets the stage for the third element, media, buyer, and political pressure to improve farm worker conditions. Improving wages and working conditions, and ensuring that all employers pay employment-related taxes, will raise labor costs, which could slow the expansion of Mexican produce exports. Navigating between expanding export opportunities and more migrant labor could prove challenging, especially for small and medium-sized Mexican farm exporters.