Source: MICHIGAN STATE UNIV submitted to NRP
FINDING SOLUTIONS TO LABOR CHALLENGES THAT PROMOTE FOOD SUPPLY CHAIN RESILIENCE IN THE UNITED STATES
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
ACTIVE
Funding Source
AFRI COMPETITIVE GRANT
Reporting Frequency
Annual
Accession No.
1032152
Grant No.
2024-67023-42544
Cumulative Award Amt.
$649,936.00
Proposal No.
2023-10723
Multistate No.
(N/A)
Project Start Date
Aug 15, 2024
Project End Date
Aug 14, 2028
Grant Year
2024
Program Code
[A1641]- Agriculture Economics and Rural Communities: Markets and Trade
Recipient Organization
MICHIGAN STATE UNIV
(N/A)
EAST LANSING,MI 48824
Performing Department
AFRE
Non Technical Summary
In sum, the scope of our research will provide economic insights into a key set of pressinglabor challenges facing the domestic food system with the goal of "Finding Solutions to LaborChallenges that Promote Food Supply Chain Resilience in the United States." We believe thescope of research contained in this proposal will be useful to domestic agricultural stakeholders,policymakers who are tasked with promoting the general welfare of the American public, and ourfellow citizens. We appreciate your time and effort in reviewing this proposal and hope you willrecommend funding it.
Animal Health Component
100%
Research Effort Categories
Basic
0%
Applied
100%
Developmental
0%
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
61050103010100%
Knowledge Area
610 - Domestic Policy Analysis;

Subject Of Investigation
5010 - Food;

Field Of Science
3010 - Economics;
Goals / Objectives
Objective: Our overall objective is to conduct an empirical investigation into a set of key labormarket challenges facing the domestic food supply chain and identify a set of market and policyoptions that could help resolve them. We organize our research into the following six stages, eachbuilding on and supporting the proposal's theme.Stage 1: Determine whether a post-Great Recession structural shift in Mexico-US migration isresponsible for the recent spike in demand for H-2A employees and quantify the extent to whichdeclining domestic farm employment is being replenished by H-2A labor.Stage 2: Estimate the effect of the H-2A visa program's Adverse Effect Wage Rate (i.e., theH-2A minimum wage) on the wages of non-H-2A farmworkers and quantify the economic impactsof changing existing H-2A program mandates.Stage 3: Estimate the impacts of the declining domestic farm labor supply on domestic FVproduction and the demand for imported FV crops. Provide a risk assessment about potentialsupply chain disruptions on domestic food supplies and identify policy options that could reducerisk exposure.Stage 4: Examine the impact of labor-market concentration on wages while recognizing theendogeneity of concentration and the inherent difficulty of defining "markets" for labor that maybe fungible across industries and space.Stage 5: Develop a theoretical model that explains how healthcare coverage influences labormarket outcomes such as employee productivity, duration of employment and unemployment, andnegotiated wages, as well as employer profits. Test the empirical implications of our model usingreduced-form treatment effect regression models and a structural econometric model of job search,matching, and bargaining.Stage 6: Synthesize our theoretical and empirical findings to suggest a range of policy solutions,or improvements to current policies, that can promote food supply chain resilience in the US.
Project Methods
Approach:Our overall objective is to conduct an empirical investigation into a set of key labormarket challenges facing the domestic food supply chain and identify a set of market and policyoptions that could help resolve them. We organize our research into the following six stages, eachbuilding on and supporting the proposal's theme.Stage 1: Determine whether a post-Great Recession structural shift in Mexico-US migration isresponsible for the recent spike in demand for H-2A employees and quantify the extent to whichdeclining domestic farm employment is being replenished by H-2A labor.Stage 2: Estimate the effect of the H-2A visa program's Adverse Effect Wage Rate (i.e., theH-2A minimum wage) on the wages of non-H-2A farmworkers and quantify the economic impactsof changing existing H-2A program mandates.Stage 3: Estimate the impacts of the declining domestic farm labor supply on domestic FVproduction and the demand for imported FV crops. Provide a risk assessment about potentialsupply chain disruptions on domestic food supplies and identify policy options that could reducerisk exposure.Stage 4: Examine the impact of labor-market concentration on wages while recognizing theendogeneity of concentration and the inherent difficulty of defining "markets" for labor that maybe fungible across industries and space.Stage 5: Develop a theoretical model that explains how healthcare coverage influences labormarket outcomes such as employee productivity, duration of employment and unemployment, andnegotiated wages, as well as employer profits. Test the empirical implications of our model usingreduced-form treatment effect regression models and a structural econometric model of job search,matching, and bargaining.Stage 6: Synthesize our theoretical and empirical findings to suggest a range of policy solutions,or improvements to current policies, that can promote food supply chain resilience in the US.

Progress 08/15/24 to 08/14/25

Outputs
Target Audience:Our target audineces include the following groups of individuals: Academics interested in H-2A policy and farm management. Policymakers interested in understanding the effects of proposed legislative changes to the H-2A visa program. Agricultural industry groups interested in H-2A visa policy. Agricultural stakeholders interested in agri-food system economic research. Changes/Problems:We ran into some difficulties accessing the TDLinx data from ERS-USDA for the stage 4 manuscriptrevision. Because of cutbacks at ERS, there are very few people available to review results in ADRF, which lead to a significant delay in completing the revision. Further revisions may also experience similar delays, and we may have to pivot away from using ERS data in future projects on this general topic. What opportunities for training and professional development has the project provided?PI Rutledge has provided supervision to a PhD student who has learned a considerable amount about farm labor scarcity, theoretical modeling techniques, and empirical analysis methods related to stage 3 of this project. The PhD student has started making progress on this stage and has developed some analytical expertise related to the economics of farm labor markets. Co-PI Richards advised a PhD student on stage 4 of the project. That PhD student recently graduated under Richards' supervision. How have the results been disseminated to communities of interest?We have published two peer-reviewed academic journal articles (stages 2 and 5). We have disseminated research findings (some preliminary and some final) to various audiences through formal presentations (stages 2, 3, 4,and 5). We have shared research findings with US Department of Labor staff and other various stakeholder groups. We have published a lay-style article related to stage 5 in "The Conversation." We gave several presentations at academic conference highlighting results of our analyses. What do you plan to do during the next reporting period to accomplish the goals?We plan on continuing to disseminate research findings to stakeholder audiences. We also plan on continuing to make progress on the remaining research stages that have not been completed.

Impacts
What was accomplished under these goals? During the reporting period, we completed stages 2 and 5 and made progress on stages 3 and 4.Stages 2 and 5 were published in peer-reviewed journals during the reporting period and were subsequently submitted to theNational Agricultural Library's (NAL) PubAgrepository. A manuscript was developed for stage 4 and is currently under peer-review. We also started stages 1 and 3 and have further work to accomplish on those stages moving forward. We disseminated results from stage2 to staff members at the US Department of Labor who expressed interest in our research due to recent legislative proposals related to the H-2A visa program and other agricultural stakeholders. We also produced an outreach publication in "The Conversation" highlighting the main findings of stage 5 that is accessible to lay audiences. We also gave several presentations related to stages 2, 3, and 4to various audiences, which are listed below. Adverse Effect Wage Rates and US Farm Wages. Agricultural and Applied Economics Association Annual Meeting,Denver, CO, 2025. Farm Labor Costs and Specialty Crop Imports. Agricultural and Applied Economics Association Annual Meeting, Denver, CO, 2025. Rising Labor Costs and Import Dependence in the United States. Agricultural and Applied Economics Association Annual Meeting,Denver, CO, 2025. Adverse Effect Wage Rates and Domestic Farm Wages. National Council of Agricultural Employers Winter Meeting,Virtual, 2025. H-2A Adverse Effect Wage Rates and US Farm Wages. UC Davis Agricultural and Resource Economics Department Seminar,Davis, CA, 2024. H-2A Adverse Effect Wage Rates and US Farm Wages. USDA-ERA Farm Labor Conference, Santa Cruz, CA, 2024. Concentration and Wages in Retailing, Agricultural and Resource Economics Meeting, Brisbane, Australia, 2025 Concentration and Wages in Retailing, International Industrial Organization Conference, Philidelphia, PA, 2025

Publications

  • Type: Peer Reviewed Journal Articles Status: Published Year Published: 2025 Citation: Rutledge, Zachariah, Marcelo Castillo, Timothy J Richards, Philip Martin. 2025. H-2A Adverse Effect Wage Rates and U.S. Farm Wages. American Journal of Agricultural Economics, Early View.
  • Type: Peer Reviewed Journal Articles Status: Published Year Published: 2025 Citation: Rutledge, Zachariah, Timothy J Richards, and John D Lowrey. 2025. Health Coverage and Farmworker Productivity. American Journal of Agricultural Economics, Early View.