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April 2016, Volume 22, Number 2

Florida: FFP, H-2A

FFP. The Fair Food Program released its annual report for 2014-15 early in 2016. Buyers paid a total of $4.1 million in premiums in 2014-15, up from $3.5 million in 2013-14. In most cases, FFP buyers pay an extra $0.015 per pound of tomatoes, suggesting that FFP payments were made on 271 million pounds of Florida tomatoes.

Florida growers shipped 36.5 million 25-pound boxes of tomatoes in 2014-15 or 912 million pounds from about 33,000 harvested acres, suggesting that the FFP covered up to 30 percent of tomato shipments. The share of Florida tomatoes covered by FFP premium payments is lower because buyers pay a higher rate per pound for the grape, Roma, and other smaller tomatoes not included with the 25-pound boxes.

FFP standards that protect workers apply to all employees on participating farms, whether they receive the premium price or not.

The average grower price, according to USDA, was $10.60 a box, and ranged from $3 to $21 a box; total revenues were $385 million. Growers put the cost of production at $9 a box or $0.36 a pound. More growers are leaving the industry. Grainger Farms filed for bankruptcy protection in May 2015, and East Coast Brokers and Packers filed for bankruptcy protection in 2013.

The FFP began in 2011 as a labor standards system to increase wages and improve working conditions for workers on tomato farms. The program began with restaurant buyers such as Taco Bell, McDonald's and Subway, and has since expanded to retail grocers including Ahold and Wal-Mart. The FFP is expanding to other East Coast states where Florida-based growers produce tomatoes, and to strawberries and bell peppers in Florida.

The FFP lists several challenges, including tomato buyers who do not participate in the FFP allow growers who do not want to join FFP or are suspended from participation to sell their tomatoes. The FFP has joined with tomato growers to argue that some Mexican tomatoes were dumped in the US, forcing Mexican growers to raise their minimum selling price. Finally, the FFP complained of similar labor-standards programs that, they believe, do not involve sufficient worker education and empowerment.

H-2A. Florida had more farm jobs certified to be filled by H-2A workers than any other state in FY15, and the major employer of H-2A workers in the state is citrus. By some estimates, 85 percent of Florida oranges are picked by H-2A workers who are guaranteed a wage of $10.70 an hour in 2016.

Most Florida oranges are processed into juice. Mechanical harvesters are available to harvest oranges, and they harvested a peak 36,000 acres in 2006 before growers returned to hand-harvesting to avoid damage to trees affected by citrus greening. The return to hand harvesting was accompanied by increased employment of H-2A workers.

Most Florida oranges are picked by contractors and other intermediaries under a variety of arrangements that usually involve picking and hauling the crop to juice processors. In addition to wages to pickers and payroll taxes on picker earnings, the major cost of using H-2A workers is providing them with housing at no charge.

Two-thirds of the non-wage costs of H-2A workers arise from the requirement to provide them with housing, and the average cost in Florida is about $150 per month per worker. Under the AgJOBS proposal included in comprehensive immigration reform, farm employers of guest workers tied to them could provide housing or pay workers a housing allowance that would generally be about $1 an hour in rural areas for 160-hour-a-month workers and expect them to find their own housing. It is not clear whether guest workers unfamiliar with housing markets in agricultural areas would be able to find housing within these budget parameters.

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