The hiring of farm labor contractors (FLCs) and custom harvesters (CHs) has increased greatly in the last two decades, yet there is no published information for growers about the results of hiring FLCs or CHs. Farm labor contractors are the middlemen who bring together growers and farm workers. They provide any of a number of services from recruiting, training, and supervising workers, to supplying equipment and making field decisions. Custom harvesters perform a full harvest service, providing both workers and harvest equipment. A pilot study sponsored by the Agricultural Personnel Management Program investigated three questions regarding employers' experiences with FLCs and CHs:
A. What types of work are FLCs and CHs being hired to do, and what services do they provide?
B. What are growers' experiences with and opinions about the work of FLCs and CHs?
C. What are the characteristics of the grower contractor relationships?
The study was based on a mail survey to the 500 members of the Monterey County Farm Bureau and the Grower-Shipper Vegetable Association of Central California. The Salinas Valley was chosen because of a strong recent trend there toward hiring FLCs. Seventy usable questionnaires were returned for a response rate of 17 percent. Respondents' agricultural operations included growing crops (82 percent of respondents), harvesting (30 percent), and shipping (63 percent). Primary crops grown by respondents were lettuce, cauliflower, broccoli, and other vegetables. Their firms were large, with over half farming more than 1,000 acres and more than two-thirds having gross annual sales over $1 million.
Most respondents hired workers through a combination of sources including direct hire, FLCs, CHs, and workers supplied by others (growers or shippers). A quarter of the respondents listed a concern about fairness to workers as the most challenging aspect of labor management.1 Concerns included how to provide continuous employment, fair wages, health insurance, good
working conditions, and fair treatment so that employees would return. Other challenging aspects were getting and keeping dependable workers (15 percent) and problems with immigration laws (11 percent).
Type of Work and Services Provided
Tasks. Surveyed growers hired FLCs most often to do hoeing work, including thinning and weeding (67 percent). The second most commonly contracted task was harvesting (56 percent). A few growers hired FLCs to do various other tasks, such as transplanting, tying, stumping, pruning, suckering, irrigating, topping and lifting, and grafting.
Crops. FLC work was found most often in the leading vegetable crops produced in the county, including lettuce (26 respondents), broccoli (14), cauliflower (11), and celery (9). In each crop, about twice as many growers hired FLCs for hoeing work as for harvest work.
Services. FLCs provided a number of services to most respondents, including making payments to workers (93 percent of respondents), recruiting (88 percent), providing drinking water and field toilets (88 percent), paying payroll taxes (88 percent), supervising workers (83 percent), providing pay stubs (81 percent) and worker equipment (79 percent). Contractors also transported workers, set wages and benefits, and trained workers for over half the respondents. They provided harvest equipment and made field decisions for fewer than a quarter of the respondents and provided worker housing for only 14 percent.
Nine percent of growers were contracting for more services in 1988 than in previous years, and 5 percent were contracting for fewer services.
Fees. FLC fees were paid either on a commission basis (as a percentage of payroll) or in a flat fee covering the FLC's expenses (including wages paid) and time. While no reason was given for the selection of either method, the commission payment was associated more often with hoeing and transplanting work, and a flat fee more often with harvesting work. Most growers and FLCs appeared to prefer one or the other type of payment, because only four respondents used both methods. Commission rates were not clear from the answers received, since some included payment for payroll taxes and some did not.
Custom harvesters. CHs were hired most often in broccoli (8 respondents) and lettuce (7). Two to three respondents hired CHs in celery, tomatoes, cauliflower, grapes, and carrots. A comparison of harvest labor sources indicates that FLCs were used by more respondents than CHs to harvest lettuce, but CHs were used by more to harvest broccoli (table 1). Some respondents used both FLCs and CHs to harvest tomatoes.
Growers' Experiences with FLCs and CHs
Reasons for hiring. The main reason employers hired FLCs was to reduce the paperwork involved in hiring workers (51 percent). Other reasons were cost savings and reducing supervision requirements. Cost savings was the reason cited most often for hiring custom harvesters (61 percent). Hiring CHs could result in savings on equipment purchase and maintenance as well as reduced labor costs. Reducing paperwork and improving quality were the next most important reasons for hiring CHs. Table 2 lists all the reasons given for hiring FLCs and CHs. The answers were compiled from two questions: one gave a list of reasons to choose from (indicated by * in table 2), and the other asked respondents to write any additional reasons they had for hiring FLCs.
Satisfaction with FLCs' work. Most respondents were satisfied with the work of FLCs, especially in services related to paperwork (such as paying payroll taxes and paying workers), and in the provision of workers' equipment and harvesting equipment (table 3). Growers were less satisfied with the speed and skill of workers brought by FLCs. Highest rates of dissatisfaction were in training and supervision provided by FLCs, skill of workers, and quality of work product.
Most growers expressed satisfaction with the services of CHs, but two respondents complained about "sloppy work" and lack of control of workmanship.
The payoff: advantages and disadvantages of hiring FLCs. Respondents' lists of advantages and disadvantages of hiring FLCs give insight into the actual results from hiring contractors. Some of the original reasons for hiring contractors are given as advantages, but some disappointed respondents listed a few of these factors as disadvantages. New advantages also emerged that were not considered as reasons for hiring contractors (table 4).
The advantage listed most often was increased flexibility, such as having
crews to fill in when additional or unexpected labor needs arose, having
crews for short-term needs, and having quick access to a large number of
workers. Lowering costs was given more frequently as a reason for hiring
FLCs (49 percent) than as an actual advantage (24 percent). Thirteen percent
listed higher costs as a disadvantage. Those with lower costs cited lower
workers' compensation insurance costs, no medical insurance, lower wages,
and lower overhead.
Only three growers listed any positive attributes of FLC work as an advantage. They listed better quality work, better management, and specialized training (for grafting vines). The most common disadvantages were poor quality of work, including lack of quality control, poor workmanship, spotty results, less skilled workers, less attention to detail, and less productive workers.
Higher turnover was given as a disadvantage by three growers, and one cited low turnover as an advantage. One respondent complained that FLC crews were allowed to drive their cars into the field and the crew left garbage in the field.
Comparative costs and changes in the firm. Of the respondents, 48 percent reported their costs were lower as a result of hiring FLCs, 41 percent said their costs did not change, and 11 percent found costs had increased. The full meaning of these answers is not clear, since respondents were not asked the level of wages and benefits they paid before an FLC was hired or which specific costs had increased or decreased.
Some cost savings could have been realized through changes in the firms. Over 25 percent of respondents hired fewer bookkeepers and supervisory personnel. A few sold worker transportation vehicles, employed
fewer quality control personnel and closed worker housing. However, a few also hired additional quality control personnel.
Future intentions. Most respondents (86 percent) intended to hire FLCs in the same crops and tasks in the coming year, but a few (11 percent) expected to hire FLCs for fewer crops or tasks or not at all. Several of these had complained about the poor quality of work and supervision or poor treatment of workers by FLCs. Only one respondent expected to hire FLCs for additional crops and tasks in the next year.
Advantages and disadvantages of hiring custom harvesters. Cost savings was cited most often as an advantage realized from hiring custom harvesters. Flexibility was the next most commonly cited advantage. Other advantages were equipment, quality of work or supervision, reduced paperwork, reduced supervision responsibilities, less liability, and no recruitment. The biggest disadvantage was lack of control. Other disadvantages were lack of personal contact with workers, less flexibility, and high costs.
Hiring CHs had resulted in lower costs for 57 percent of the respondents, no change in costs for a third, and increased costs for 10 percent.
About three-fourths of the respondents expected to hire CHs in the same crops in the following year, but 14 percent would not hire a CH or would hire CHs in fewer crops, and 9 percent expected to hire CHs in additional crops.
GrowerContractor Relationships
Most of the FLCs were hired from the Salinas Valley, although a few were from Santa Cruz and San Benito counties, and the San Joaquin Valley. Two growers hired contractors from Yuma, Arizona.
Most of the respondents first hired an FLC before 1985 and continued to hire FLCs each year after the initial hire. Seven first hired FLCs in the 1940s and 1950s. Many of the relationships with FLCs have been long-term. Almost one-third of respondents had hired the same FLC for 10 or more years. Most of those who had hired the same FLC for fewer than 5 years had only been hiring FLCs for less than 5 years. It does not appear that the respondents tend to hire a number of different FLCs in the same year. Fifty-six percent hired only one contractor in the previous year, and another 24 percent hired two contractors.
About half of the respondents hired FLCs for 30 or more weeks a year, and another 20 percent hired FLCs for 16 to 30 weeks. Many of those who hired FLCs for 16 weeks and more reported that an advantage was the added flexibility and opportunities to hire workers for a limited amount of time. These statements indicate that growers may have been replacing, not supplementing, their regular work force with FLC labor.
Hiring of CHs has generally been more recent. Sixty-four percent of respondents first hired a CH in 1985 or later. Fifty-five percent hired only one CH in 1988. About three-quarters expected to hire CHs in the same crops in the following year.
Conclusions
While FLCs work in a variety of tasks and crops in the Salinas Valley, they are most often hired for hoeing work in the area's leading vegetable crops, such as lettuce, broccoli, cauliflower, and celery. The number of FLCs hired for harvest work is increasing. CHs are hired most often in broccoli, lettuce, celery, and tomatoes.
The most common reasons for hiring FLCs are to reduce paperwork, costs, and supervisory responsibilities. Increased flexibility is the main advantage of hiring FLCs, and poor quality work the main disadvantage. Cost savings were reported by 49 percent of the respondents, but 41 percent saw no difference in costs after hiring an FLC, and 11 percent said costs increased. Most grower-contractor relationships are stable and long-term, continuing year after year.
These results indicate that the use of farm labor contractors is of benefit to some firms but not to others. Factors worth considering before contracting with an FLC include the degree of skill needed for the task, the experience and reputation of the FLC in the particular crop and task, the quality of work provided by the current work force, the length of time needed to complete the work, and unexpected needs for additional workers. In the case of custom harvesters, the ownership or cost of specialized equipment may also be a factor.
Back to: Contents | LMD Main Page | APMP Home