New administration brings ag policy changes

The U.S. agriculture sector is poised to witness significant shifts with the advent of the new Trump Administration and the 119th Congress.

For agricultural employers, understanding the potential impacts of these policies on agricultural labor is crucial to effectively navigate the forthcoming changes. Some of these shifts could be more advantageous for farm and ranch families than others.

One of the paramount concerns for agricultural employers will be shifts in immigration policies. The agricultural sector heavily relies on immigrant labor, particularly seasonal workers who engage in essential tasks such as planting, tending and harvesting crops. With stricter border controls and immigration enforcement, employers may face a dwindling labor pool. This could exacerbate labor shortages, increase labor costs and, subsequently, potentially result in higher prices for consumers. Not to mention, frightened people are less productive employees.

The H-2A visa program, which allows agricultural employers to hire foreign workers for temporary or seasonal work, is likely to see changes under the new administration.

If the process becomes more streamlined and efficient, it could alleviate some labor shortage concerns. However, if the program faces additional restrictions or bureaucratic hurdles, agricultural employers may find it challenging to secure the necessary workforce in a timely manner, negatively impacting enterprise productivity and profitability.

Another area of potential impact is the federal minimum wage and labor regulations. Any increase in the federal minimum wage or Adverse Effect Wage Rates (AEWR) under the H-2A program will directly affect the agricultural sector, where profit margins are already thin. Mandated government wage rates disconnected from market forces are likely to lead employers to adjust their business models to accommodate higher wages or could add pressure to invest in automation to reduce reliance on manual labor.

While the initial investment may be significant, the long-term benefits of mechanization could include higher productivity, lower labor costs and improved competitiveness. However, contrary to the assertions found in the Heritage Foundation’s Project 2025, cost-effective large-scale mechanization of certain on-farm tasks is mostly illusory today.

Additionally, changes in labor regulations regarding overtime, working conditions and employee benefits could impose further financial burdens on employers, necessitating careful planning and adaptation.

One potentially bright spot for employers and the people in their employment is a bill introduced by Claudia Tenney (R-NY), HR 240, which seeks to amend the Fair Labor Standards Act to preempt individual states from imposing overtime standards on ag employers for work in excess of 60 hours per week. As we know, the thoughtless imposition by some state legislatures of ag overtime requirements results in reduced pay for workers.

On the flip side, Ken Calvert (R-CA) has introduced HR 251, the Legal Workforce Act, which would mandate the use of E-Verify. Whether his bill will achieve majority support in the House is unclear.

Trade policies enacted by the new administration can have significant ramifications for agricultural employers. Tariffs, trade agreements and export regulations influence market access and competitiveness. Any policies that restrict the flow of agricultural products or increase costs will reduce profitability for employers. On March 4, 25% tariffs were placed on Mexican and Canadian products.

Of course, the new administration’s Departments of Labor and Justice could see fit to either settle NCAE’s ongoing litigation against the Biden administration’s AEWR rule or grant NCAE’s petition for a change in the AEWR methodology, making American farmers and ranchers more competitive in the marketplace.

The policies of the new Trump Administration and the 119th Congress could have far-reaching effects on agricultural labor from the employer’s perspective. By closely monitoring policy developments, advocating for favorable regulations and embracing innovation, agricultural employers can navigate these changes and hopefully thrive in an evolving landscape.

FAQ

How could the Trump administration’s labor policies affect agricultural employers?

Potential changes to immigration enforcement, H-2A visas, wage regulations, overtime requirements and trade policies could affect agricultural employers. Marsh argues these developments could affect workforce availability, operating costs and agricultural profitability.

What changes to the H-2A visa program were anticipated in 2025?

Marsh explains that a more streamlined H-2A process could help employers secure seasonal workers, while additional restrictions or administrative requirements could make hiring more difficult. These are possibilities rather than confirmed policy changes.

What is the Adverse Effect Wage Rate, and why does it matter to farmers?

The Adverse Effect Wage Rate (AEWR) is a wage requirement associated with the H-2A agricultural worker program. Higher mandated wage rates could increase employer costs and place additional pressure on farm profitability.

What agricultural labor legislation is discussed?

H.R. 240, introduced by Rep. Claudia Tenney to address state agricultural overtime standards for work exceeding 60 hours per week, and H.R. 251, introduced by Rep. Ken Calvert to mandate E-Verify use.

Can automation solve agricultural labor shortages?

Marsh identifies mechanization as a potential way to improve productivity and reduce labor dependence but cautions that cost-effective, large-scale automation remains impractical for certain agricultural tasks.

Michael Marsh has led the National Council of Agricultural Employers since 2017. A Wyoming native and certified public accountant, Marsh worked for a CPA firm with farm and ranch clients investigating fraud. He was director of finance for the Almond Board of California for 7 years and for 15 years was CEO of the largest U.S. dairy producer trade association.