Montana farmers turn to South Africa to fill labor gap

The Wall Street Journal reported in August 2015 that fruit and vegetable output is falling in the United States by more than $3 billion annually because farmers can’t keep enough workers in the fields. And that is only the beginning.

Crops rot on the vine, processing facilities are forced to cut their operating hours, family farms can’t take full advantage of their resources — all because of a persistent shortage of farm labor.

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“It’s just really, really hard to find people,” said Travis Choat, owner of an irrigated farming and feedlot operation outside Terry.

He said that on average, despite offering more than $11.50 per hour, free housing, free beef and a gasoline allowance, he’s experienced a 300 percent annual turnover rate on the local people he has hired.

“We’ve offered the upper end of what we believe we can afford and still stay in business,” Choat said of his attempts to hire local employees. “We end up using day work and other things to try and get by. This is our limiting factor.”

Despite a U.S. Department of Labor report that 7.9 million Americans are available for work but remain unemployed and the average wage for farm labor jobs is now surpassing $11.60 an hour, the amount of available farm labor in the country remains in short supply.

“The industry says there is about a 40,000 person shortage in the agriculture sector nationwide,” said Montana Department of Agriculture spokesperson Jayson O’Neill. “That’s everything from unskilled labor to biotechnology.”

The exact reasons for this shortage are difficult to pin down, but they are numerous, including: a lack of Americans willing to do the hard work associated with farming; the uncertainty of what often amounts to seasonal employment; a reluctance to relocate to the remote rural areas where most ag jobs are found; and an aging agricultural community with many children leaving the farm to find work elsewhere.

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“Farm labor has always been difficult to find,” said Rob Davis, president of the Montana Grain Growers Association and an ag producer with a farm in northeastern Montana. “The qualified ag labor that today’s ag requires is just not out there.”

Whatever the reasons, a handful of employment brokerage companies have recognized the need for more ag workers in the country and are responding by contracting with individual family farms and commercial ag enterprises to bring hundreds of temporary guest workers to the United States.

One of these is USA Farm Labor Inc.

Over the past 13 years, the North Carolina-based company has brought thousands of seasonal ag workers from South African to the United States. The single most common destination for these workers are small family farms looking for one to three people to help them get the work done — and business is booming.

“Many of our clients in North Dakota and Montana are just a husband-and-wife operation,” said Manuel Fick, chief executive officer of USA Farm Labor. “Maybe they have a son or daughter who works on the farm, or maybe their kids are going to college wanting to do something different. They’ll contact us for help getting one or two South Africans, and with that they can cope.”

Fick said business at USA Farm Labor has grown at least 10 percent annually since its offices opened in Waynesville, North Carolina, in 2003. Over the past three years, the requests for help have exploded.

“Since 2013, we’ve grown between 40- and 50-percent each year,” Fick said. “I’ve had to hire three or four additional people at our office just to cope with the volume in this year alone, and I need another three or four.”

USA Farm Labor is one of five ag labor contracting services now operating in the United States. Its success is a reflection of the desperation many ag producers face in finding qualified helpers who are willing to work. Davis is one of their clients.

He said he would prefer to hire American help, but the local helpers just doesn’t stick around.

“We’ve hired local people, gave them the same wages as we’re paying the foreign help, and they just seem to think they’re overworked and underpaid,” Davis said. “Nobody wants to do the work that we need done. I think the longest employment we’ve had with local guys is two weeks.”

That stands in stark contrast to the labor situation in South Africa.

According to the trade journal African Economic Outlook, South Africa’s economy has been in sharp decline since 2008. Unemployment there has reached 24.3 percent, with youth unemployment nearing 50 percent at the end of 2014. The South African currency, the rand, is now worth less than six cents to the U.S. dollar — less than half of its value just five years ago.

Fick said that a typical farm worker in South Africa today earns the U.S. equivalent of around $500 a month — when they can find work — and that many of these people are white, English speaking South Africans displaced by labor policies instituted by the South African government following the end of Apartheid.

“There are about 100,000 white South Africans who graduate from high school each year who can’t find employment,” Fick said. “Many are now looking toward Canada and the U.S. to find work.”

Working 12- or more hours a day, six days a week, South African guest workers can gross more than $4,000 a month in the United States. After mandatory deductions for U.S. federal income tax, a frugal worker could bring home in 10 months what it would have taken him five years to earn in South Africa.

“With that type of money, they can take care of their family and have a little bit of a dream,” Fick said.

It would seem to be a perfect fit; however, it comes at a substantial cost.

Bringing foreign labor into the United States is strictly regulated by both the Department of Labor and U.S. Citizenship and Immigration Services (USCIS). The process is detailed, cumbersome and expensive.

In addition to wages, living accommodations and a food allowance; all of which are regulated by the U.S. Department of Labor, employers also must pay for a South African worker’s round-trip airfare to and from his homeland, administrative and processing fees to various federal agencies, plus the costs for recruitment, employee screening and the visa application services USA Farm Labor supplies.

In total, a Montana farmer can expect to pay an additional $4,500 to bring a new South African worker to the United States for the first time. The costs decrease after the initial application and screening process, but even with an established employment history, a South African worker will cost, on average, more than $300 per month above what equivalent U.S. labor would cost.

“The question is, can’t he (the farmer) just take the extra $300 and give it to an American and then maybe he’ll have a permanent worker,” Fick said. “But it doesn’t work out like that. They’re just not there.”

One of the requirements established by the U.S. Department of Labor to hire a foreign worker is that the potential employer must first place newspaper want-ads in at least four states seeking an American for the same job. According to Fick, to comply with this requirement, in 2015 USA Farm Labor advertised nationwide for 800 available farm labor positions.

They received just 10 responses.

“Of the 10 applications we received, only two people took the job,” Fick said. “And of those two, only one finally got to the workplace.”

Given the current short supply of American workers willing to put in the long hours and hard work ag labor demands, many farmers are willing to accept the extra costs and paperwork necessary to hire a South African — even when that individual may not be as skilled or knowledgeable about modern agricultural practices as their American counterpart.

“Many of our clients tell me, ‘Just get me a good, reliable, honest, hard-working, show-up-every-day guy, and I’ll train him what I need to,’” Fick said.