A Field Guide to the Farm Bill, Part II

A Hard Row – Farm Legislation from 1933- 1939

The first farm bill was crafted in 1933: a time of plunging crop prices, dust storms, and a burgeoning Depression. At the time, over 20 percent of working Americans were farmers, and 80 percent of farms were smaller than 175 acres.

The U.S. agricultural economy had grown in the post-WWI years, bolstered by demand from economically devastated European nations. In those boom years the American prairie fell to herd and plow, aided by new agricultural mechanization technology.

As the European economy recovered demand for U.S. farm goods fell and prices sagged. American farmers, however, maintained production levels, creating a surplus that further depressed prices. At the same time consecutive years of drought dried stressed, over-tilled topsoil to dust and blew it across the country in “black blizzards” that reached the nation’s capital. From 1929 to 1932, gross farm income dropped 52 percent to just 40 percent of urban incomes (at a time when there was 30 percent urban unemployment).

Franklin D. Roosevelt charged his Secretary of Agriculture, Henry Wallace, with the task of rescuing the agricultural economy. Wallace (who, on an unrelated note, has a melon named after him in China) drafted the Agricultural Adjustment Act of 1933. The Act strengthened the failing farm economy by paying subsidies to farmers to fallow their land, setting mandatory minimum prices for agricultural products, and developing storage systems to regulate the flow of grain onto the market (and thus level price fluctuations).

Wallace also took the drastic and unpopular action of purchasing and slaughtering six million pigs and paying farmers to plow under ten million acres of cotton. Wallace mollified critics by establishing the Federal Surplus Relief Corporation to direct surpluses to relief efforts. In 1935, an Amendment to the Agricultural Adjustment Act allowed for the appropriation of funds to purchase surplus agricultural products for food relief. In the same year, the Soil Conservation Act created the Soil Conservation Service, which paid farmers to implement soil conservation practices including cover crops, contour plowing and crop rotation. 

The latter half of the 1930s saw gradual economic improvements in the agriculture sector, due to the efforts of the FDR administration. From 1933- 1936, farm incomes doubled. However, the benefits disproportionately went to large farmers, causing the consolidation of farmland and the exodus of at least three million small farmers from the land.

Doubtless, some of the young men of the dust bowl diaspora found themselves in the Civilian Conservation Corps, who in 1938 were deployed across the great plains region to re-plow the land into furrows and plant shelterbelts of native trees, resulting in a 65 percent reduction in soil erosion. The rains returned the following year, ending the nine-year drought.

Also in 1939, the first Food Stamp Program was instituted, designed to address hunger while continuing to draw down the agricultural surplus. Families could purchase orange coupons (or ‘stamps’) and receive 50 cents worth of blue stamps for every dollar of orange stamps purchased. The blue stamps could be used to buy only government-designated surplus food items. At its peak, four million Americans were enrolled in the Food Stamp Program, which was eliminated in 1943 when the economy received a boost from WWII.

The 1930s established the precedent for the system of price supports and subsidies that would inform later agricultural policy, but it is worth noting some contrasts. In the 1930s, prices were controlled by limits on production, whereas later legislation would turn toward the opening of markets to inflate prices. Also, the first agricultural subsidies were tied to conservation, while later legislation would decouple subsidies from conservation and instead tie them to production, bringing conservation back into the farm bill under a separate title and thus making it more vulnerable to cuts.

The 1930s also helped to set in motion the steady consolidation of farmland into the hands of the few, as policies did little to protect tenant farmers, sharecroppers, and the smallest family farms—a trend that would later be compounded in the 1940s-1970s by advances in farm mechanization and increasing political support for industrialized agriculture, the period covered in the next Field Guide to the Farm Bill.

Sources/ Recommended Reading

“Timeline: Surviving the Dust Bowl 1931-1939” American Experience, PBS.org. Retrieved 11-21-2011

Mintz, S. “1930s: The Farmer’s Plight” Digital History, 2007. Retrieved 11-22-2011

Kittredge, Jack. “A Brief History of the Farm Bill” The Natural Farmer, Fall 2011.

 Dimitri, Effland, and Conklin. “The 20th Century Transformation of U.S. Agriculture and Farm Policy.” USDA Economic Research Service, Number 3, June 2005. Retrieved 11-21-2011

Swinton, Amelia “Detangling the Farm Bill.” Lettuce Link, 12-2-2010, retrieved 11-21-2011

Quincy Farmer Reports Back From Local Farms, Food and Jobs Act Fly-in

By Cara Fraver, Quincy Farm

The Local Farms, Food, and Jobs Act was introduced by Representative Chellie Pingree and Senator Sherrod Brown this month. This act is suggestions for legislation that would tweak parts of the Farm Bill to address the needs of those of us who market our farm products within 250 miles of our farms. 

On November 3^rd, I rode Amtrak to DC and met the staff from the National Sustainable Agriculture Coalition (NSAC).  NSAC had gathered an impressive group of farmers and advocates from around the country to speak to their representatives.  With Steve Etka from the National Organic Coalition, Aisha Amuda and Kathy Mulvey from the Community Food Security Coalition, Daniel Bowman Simon from SNAP Gardens and Josephine Chu Master of Arts Candidate in Global Environmental Policy at American University, I met with two New York State Congressmen. 

Chris Gibson is the Congressman from my district; in fact, he’s from Kinderhook where we lived for two years.  He is also a new member of the Agriculture Committee, which meant that he was a high priority for this fly-in.  He was quite receptive, chatting with us about his support for farms in his district, his concerns about GMOs and his focus on solar power.  Rep. Gibson listened to our concerns and seemed interested how the Local Farms, Food and Jobs Act could benefit his constituents.  This was a surprising moment for me—it felt as if by making our voices hear we actually might be able to change the direction of government. 

Our second meeting was with Rep. Bill Owens who is on the Agriculture Committee as well.  None of us were from Owen’s district, which includes lots of the Adirondacks and northern New York.  I was impressed that both of these Congressmen met with us themselves.  Yes, staffers were present, too, but they both took time out of their days to meet with us face-to-face.  Owens signed onto the bill in the days following this meeting.  Perhaps he was expecting to co-sponsor prior to our meeting or maybe we had an impact!

I took the train back to Albany that day and was back at my house just 34 hours after leaving.  We’re pretty busy around here and I don’t spend much time thinking or reading about the Farm Bill.  I have always found the minutiae of the Farm Bill’s 1500 or so pages overwhelming.  However, in learning a bit about this act, I felt that almost all of the changes mentioned addressed parts of the Farm Bill that apply directly to our farm or farmers we know.  I was happy to have overcome my doubts about speaking to the politicians who represent me and I  hope to see more support for this Act in the following weeks, especially as the Farm Bill process is more confusing than ever with this year’s Super Committee process.

NYFC releases survey of 1,000 young and beginning farmers

New Survey of 1,000 Young and Beginning Farmers Reveals What the Next Generation Needs

Download Report (PDF)

The National Young Farmer’s Coalition released a study today showing that the nation’s young and beginning farmers face tremendous barriers in starting a farming career. Building a Future With Farmers: Challenges Faced by Young, American Farmers and a National Strategy to Help Them Succeed surveyed 1,000 farmers from across the United States and found that access to capital, access to land and health insurance present the largest obstacles for beginners. Farmers rated farm apprenticeships, local partnerships and Community Supported Agriculture (CSA) as the most valuable programs to help beginners.

 “If Congress wants to keep America farming, then they must address the barriers that young people face in getting started,” says Lindsey Lusher Shute, Director of the National Young Farmers’ Coalition. “We need credit opportunities for beginning and diversified farmers, land policies that keep farms affordable for full-time growers and funding for conservation programs.”

Report findings include:

• 78% of farmers ranked “lack of capital” as a top challenge for beginners, with another 40% ranking “access to credit” as the biggest challenge.
• 68% of farmers ranked land access as the biggest challenge faced by beginners.
• 70% of farmers under 30 rented land, as compared to 37% of farmers over 30.
• 74% of farmers ranked apprenticeships as among the most valuable programs for beginners.
• 55% of farmers ranked local partnerships as one of the most valuable programs, and 49% ranked Community Supported Agriculture (CSA) as a top program.

Lack of capital was found to be the biggest challenge for beginners. Although the USDA’s Farm Service Agency offers loans to beginning farmers, current loan rules often disqualify even experienced farmers with good credit and small loans are hard to come by. For real estate transactions, FSA loans take too long to process — up to thirty days to qualify and up to a year to receive funds – and the $300,000 loan limit doesn’t go far in many real estate markets.   

Land access was the second biggest concern. Farmers under the age of 30 were significantly more likely to rent land (70%) than those over 30 (37%). Over the last decade, farm real estate values and rents doubled making farm ownership next to impossible for many beginners.

“In Nebraska the main barrier to new and beginning farmers is access to land.  Unless an aspiring farmer inherits land, it is very difficult to have access to it,” says William A. Powers, farmer and Executive Director of the Nebraska Sustainable Agriculture Society.

The National Young Farmers’ Coalition recommends action at the local, state and federal level to help beginning farmers. At the local level, communities can create market opportunities for farmers by starting Community Supported Agriculture groups and shopping at farmers markets, as well as protecting existing farmland through zoning and the purchase of development rights. States can preserve farmland and even offer tax credits for farmers that sell their land to beginners. At the federal level, Congress can include the “Beginning Farmers and Ranchers Opportunity Act” in the next Farm Bill, which supports many of the specific recommendations in the report.

Secretary of Agriculture, Tom Vilsack, is calling for hundreds of thousands of new farmers nationwide. Over the past century, the total number of American farmers has declined – from over 6 million in 1910 to just over 2 million today. For each farmer under 35 there are now 6 over 65 and the average age of farmers is 57. The USDA expects that one-quarter (500,000) of all farmers will retire in the next twenty years.

The ‘good food’ movement is inspiring many young people to farm, both from farming and non-farming backgrounds. These farmers have the potential to offset the numbers of retiring farmers and keep family farms active, but land tenure and lack of capital are getting in the way.

“Young farmers are poised to redefine the American landscape along with our food scene”, says Severine vT Fleming, Director of The Greenhorns, “We are strong of will, and determined to make farming sustainable in this country.” 

“With the release of reports such as this one, the agrarian revival, this influx of young and beginning farmers, gains status – we’re not just a few people spread across the country, we’re a well organized, politically active group that can be documented,” says Tierney Creech of the Washington State Young Farmers Coalition. “We know who our senators and representatives are, we vote, and our friends and families vote.  We need USDA and government support to succeed and we’re going to let the nation know that.”

Download Report (PDF)

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Field Guide to the Farm Bill, Part I

A series of posts covering the fundamentals of the United States Farm Bill.

By Caro Roszell

Breaking News

The next farm bill isn’t up for renewal until next year, but the necessity of big budget cuts are accelerating the process.  With the super committee’s deadline fast approaching, the House and Senate Agriculture Committees announced last week that they will seek $23 billion in cuts in a bi-partisan effort. Many of the programs that they are targeting are critical to beginning farmers and sustainable agriculture. If you haven’t already made a call, please take action now and tell Congress to save conservation funding and beginning farmer programs.

Wondering what the hay-rake is the farm bill, anyway?

Reviewed and renewed every five to seven years, the Farm bill is the collection of legislation that sets the budget and policy for the United States Department of Agriculture. Contrary to its title, many farms (especially small and medium-sized farms and fruit and vegetables producers) scarcely notice its effect—rather, it’s impact is primarily felt in the monocultures of the  American Midwest (and in the net worth of the millionaires who own them), in public school cafeterias, CAFOs, in the grocery carts of the 44 million Americans enrolled in SNAP (formerly food stamps) and the market prices for grain in nations as far flung as Ethiopia, Venezuela, Thailand, and Lebanon.

The farm bill’s far-reaching impacts are in part due to its nature as an omnibus bill, or an array of separate measures packaged into a single document and put before Congress. Omnibus legislation is used to create agreement between potentially conflicting interests—in the case of the farm bill, the primary political trade-off is food stamps for commodity-crop subsidies, in what amounts to a 700-page, 284 billion-dollar legislative compromise.

The last farm bill (the Food, Conservation, and Energy Act of 2008) mandated funding for 37 federal programs, which are divided into 15 funding areas (called Titles), with only four of those Titles accounting for 98 percent of spending:

Nutrition Programs: 67 percent. The largest chunk of the Nutrition title supports SNAP (formerly food stamps) although the Nutrition Title also includes funding for child nutrition, healthy food and community food security initiatives like farmers’ markets.

Commodity Programs: 15 percent. Also known as farm subsidies, this title covers variety of different forms of financial handouts to growers of specific products, including corn, wheat, soybeans, oilseeds, cotton, peanuts, sugar and dairy. Fruits and vegetables are not included in Commodities Programs.

Conservation Programs 9 percent. Conservation funding is primarily spent on incentives to farmers to conserve grasslands, wetlands, erosive lands, watersheds, forests and other important landscapes.

Crop Insurance: 8 percent. Subsidized coverage for crop failures for farmers must purchase the insurance policies.

The other 2 percent of spending was allocated to the other 11 Titles, which include programs covering global food aid, “specialty crops” like fruits, vegetables and organics, rural development, research, forestry, and on-farm renewable energy development.

Of course, those were just the 2008 projections. More recent data suggests that by 2012, actual spending will be closer to $401 billion, with the following allocation: 78 percent Nutrition title, 8 percent Commodity Support, 7 percent Crop Insurance and 6 percent Conservation, leaving just 1 percent for all that ‘other stuff’ like organic vegetables and alternative energy for farms.

With one-in-eight Americans enrolled in SNAP but fewer than one-in-fifty Americans working as farmers, there is some logic to the fact that almost eight cents out of every dollar spent on the farm bill affects not the way food is grown but who has access to that food. However, serious questions about the structure and priorities of the farm bill are raised when we consider the fact that our nation exports a third of all its grain (much of it to nations that don’t want it) while clearly facing a hunger problem at home; and that the USDA tells us that half of the food we eat should be fruits and vegetables while, historically, less than one percent of agricultural subsidies support fruits and vegetables.

Still, the 2008 farm bill saw some encouraging (albeit nominally funded) advances—Conservation programs received a boost in funding, and Organics showed up in a funding title. Today that progress is under threat as conservation programs and other sustainable agriculture programs face deep budget cuts. Remember to watch the National Sustainable Agriculture Coalition Blog for action alerts and call your representatives today.

In future segments of the Field Guide to the Farm Bill we will present updates on the 2012 farm bill negotiations, more closely examine the history, economics, politics, and impacts of the bill, and consider opportunities for a fair and forward-thinking farm bill.

Sources/ Suggested Reading

Imhoff, Daniel, “Kittredge, Jack. “Do We Really Need to Think About the Farm Bill?” The Natural Farmer, Fall 2011, B1-B2.

Monke and Johnson. “Actual Farm Bill Spending and Cost Estimates.” Congressional Research Service, 7-5700, 2010. Pages 5-7.  Retrieved 10-26-2011

Elliot, Kimberly A. “Agriculture and the Doha Round.” Center for Global Development, January 2007. Retrieved 10-26-2011.

“Agricultural Subsidies, Poverty and the Environment.” World Resources Institute. January 2007. Retrieved 10-29-2011.

Pollen, Michael, “You Are What You Grow” The New York Times Magazine, April 22, 2007. Retrieved 10-29-2011.

Pollen, Michael, “We Are What We Eat.”  The Center for Ecoliteracy. Retrieved 10-29-2011.

Carter Dougherty, “Global trade talks collapse over agricultural subsidies,” The New York Times, Thursday, June 21, 2007. Retrieved 10-29-2011.

Answering the “Do I need workers’ comp insurance?” question on your own.

A prudent farmer should know if he or she is required by law to carry workers’ compensation insurance. When you can’t ask an attorney, doing your own legal research can work if you have a little time and tenacity. Here are ideas for learning the workers’ comp laws of your own state.

What’s the situation?

Farmer Andrew is ready. He’s got two acres of land that he leased from his uncle, a spot at a local farmers’ market, and a friend from college to help him out for the summer. Andrew’s finances are tight: He only wants to buy the essentials, so he’s choosing only basic tools. To reduce costs, he’ll wait on a wash station, a market display, and insurance.

Where does the law come in?

Andrew might not have much of a choice in choosing whether to buy workers’ comp insurance. Depending on his state’s laws, workers’ comp might be a required purchase for a beginning farmer planning to use employees. How is a guy to determine the legal requirements if he doesn’t want to call an attorney? Well, calling an attorney really is the quickest way to get the answer. If you can’t do that, this post is a quick guide to legal research avenues. 

Details, please:

I wish I could post a simple spreadsheet that has each state indexed to the farm-related rule. But such a spreadsheet wouldn’t be very simple at all. Usually workers’ compensation laws will cover almost all employees. But agriculture is special, and these laws often have exceptions allowing some farms–as defined by number of employees, size, the duration of  employment, and/or the amount of wages paid–to avoid the insurance requirement.

Thus, farmers will have to do a little digging to find a rule specific to their situation. The first thing to do is to call the workers’ compensation office. The state may have an information hotline that provides quick answers. However, it’s quite possible the department staff won’t be able to answer your question, especially if some interpretation of the law is necessary to make a judgment regarding your particular farm. A second option is to call an insurance agent who sells workers’ comp insurance. He or she might have encountered your situation before. But, again, if he or she doesn’t work with many farmers or is uncomfortable interpreting the law for you, you might not find your answer.

A farmer, being the DIY sort, might blaze a path forward and determine for himself if it’s required. Where would such a brave soul begin? Try the workers’ compensation office’s website: It might have a guide that specifically addresses farm employers. Or you might try the state’s insurance commissioner’s office for publications.

Finding resources on various websites can be time-consuming and distracting.  Are you lucky enough to live in Wisconsin? The Wisconsin Law Library collects information from agencies and even produces its own guides to legal topics. Look to see if your state has a similar government library. Your local law school may compile information as well. Law school libraries are often available for individual guidance–stop by or call the reference desk and ask a librarian where to find answers.

If all else fails, you might try reading the law yourself. Most states publish their laws on public websites, so you just have to find them. In Colorado, search for the “Office of Legislative Legal Services.” In Michigan, look for the “Michigan Legislature.” You get the idea. Once you find an index of your state laws, browse or search for the workers’ compensation title.

Perusing the workers’ comp statute might be overwhelming at first. If you can’t find anything about farming or agriculture, check the definition of “employer.” You might find that farms aren’t actually considered employers. Then consult the definitions to figure out what a “farm” is. After that, you might have to crunch some numbers to see if you are a “farm.” Statutes can be so disorienting that in the end you still aren’t certain if you have the answer. At this point especially, your local reference librarian may provide assistance.

I know this blog post doesn’t do much to answer the very simple question of which farms are required by law to purchase workers’ comp insurance. For that I apologize. However, I do hope this post gives you a few resources to learn your legal obligations, whether it’s workers’ comp or not.

 

Washington Takes its New Internship Law For a Spin

The new Small Farm Internship Pilot Project, passed by the Washington state legislature, is a great example of how elected representatives are exploring new ways to help direct-market farmers. The pilot project permits unpaid farm internships and grants the interns workers’ compensation insurance through a simple application process.

What’s the situation?

We’re seeing legislation proposed around the country that makes it easier for direct-market farms to be successful. For example, we need laws that help farms hire and protect good employees. The Washington law is one way to allow farmers to hire unpaid labor and protect the intern. Small farms in two counties were eligible to participate in Washington’s pilot project this summer.

Details, please:

If you’ve been following my series on apprenticeships and internships, you know the contours of federal law. Small farms are exempt from minimum wage. All other farms need to register their program and follow standards if they want to hire apprentices. If a farm wants to hire interns, the program must be only an educational service for the intern. You also know that no state law may be less strict than federal law or grant exceptions where federal law does not. However, states are free to adapt the laws or pass more stringent rules. This gives states the flexibility to address the specific concerns of their citizens. Take for example the state we’re talking about now: Washington does not exempt small farms from paying minimum wage.  

That’s where Washington’s Small Farm Internship Project comes in. The project extends a limited exception to the minimum wage for interns on small farms. However, the exception doesn’t apply to all small farms: It applies to only those farms that offer curriculum-based training qualify. Remember how federal law has all sorts of requirements for educational curricula and registration? Washington captures the same idea, but simplifies the process.

Here’s how the process worked: Any farm wishing to participate in the pilot project applied for a special certificate by filling out a form that asks several questions about the farm’s internship program. The state granted this certificate if the farm had an educational program based on actual curricula, if the farm supervised interns, and if the intern did not displace experienced employees. This simple approach is great for the time-crunched farmer.

The only potential complication with the Washington law is that it defines “small farm” differently than federal law. Under federal law, small farms are those who hire workers for fewer than 500 man-hours of labor in one calendar quarter (or about five employees in a three-month time frame). The Washington law defines small farms as those with less than $250,000 in sales. I know of a couple farms that hire more than 5 employees for the summer and take in less than $250,000 in sales. I admit they might be inefficient, but hey, it happens! That means that the farmer might meet the state exemption without meeting the federal exemption. A good lawyer would advise a farmer-client in such a situation that paying less than minimum wage might be fine by Washington State, but the federal government could still come a-knocking.

Lastly, the Washington law is a pilot project at this stage. The law calls for a report to be prepared about the program’s implementation; it will be exciting to see what happens next. Also, the reason the Washington internship project makes a difference is because the state doesn’t already extend the federal exemption to small farms. In other states that already exempt small farms, this type of law wouldn’t change anything. More creative solutions will be needed as we all continue to talk about the balance between wage rates, farm security, and employee security.

That concludes our chat about farms and minimum wage. However, that’s not the end of the Washington internship project for this blog. A major bonus of the law is that it grants interns state workers’ compensation insurance. I’ll be going over workers’ compensation in my next few postings.

What do you think?

• Do you know about any other state programs that make farm internships or apprenticeships easier to offer?
• Now that we’ve finished the minimum wage discussion, do you have any concluding thoughts? Any ideas about what states should do to make labor more affordable for the small farmer?
• In my opinion, improving farm profitability should be a higher priority than lowering the wage paid to interns. Do you agree or not?   

Will Work For Food: Paying minimum wage with farm food and housing

Having realized how difficult apprenticeships and internships are from a legal standpoint, farmers might decide to pay the equivalent of minimum wage in money, food, and housing. That can be a great solution. However, relying on volunteers instead of employees may not be a good solution.

 What’s the situation?

A farmer who understands apprenticeships, internships and the minimum wage finds herself in a bind. She doesn’t have the cash flow to pay minimum wage but she doesn’t meet the standards to host an apprentice or an intern. So she comes up with one last idea: She’ll restructure her internship as a “volunteer opportunity” in exchange for food and housing.

Where does the law come in?

That hypothetical farmer is on the right track (legally speaking) in treating food and housing as wages, but she’s on the wrong track in terms of reclassifying an intern as a volunteer. For the purposes of the federal Fair Labor Standards Act–the “FLSA,” which mandates a minimum wage–food and housing may count towards wages. But even a volunteer might be entitled to the minimum wage if the individual is treated more like an employee.

Details, please:

If a farm intern is already working for low wages in exchange for an educational experience, it might seem like a good idea to avoid labor laws by calling that individual a “volunteer.” After all, that’s more or less what a low-paid intern is! But when we are talking about legal obligations under the FLSA we have to use the law’s definitions, and the FLSA states that “employ” is “to suffer or permit to work.” That’s not quite what I was expecting for a definition! But yes, to permit someone to work at a for-profit business, even without pay, may be to employ that person. If you think about it you can see what lawmakers are trying to prevent: Without this regulation, an exploitative employer could use coercion or deceit to convince a vulnerable person to work for free in order to avoid labor laws. As the Supreme Court affirmed, individuals cannot choose to decline the protections of the FLSA. The second reason for restricting unpaid volunteering at for-profit businesses is it that unpaid workers cause a downward trend in wages for the entire industry. Sure, this law wasn’t written with the ideal, socially responsible farm in mind, but it still applies to them.

A court will look to several factors in making a classification: if a farm volunteer comes regularly and frequently for their shift, if the volunteer is under the control of the farmer while they are there, if he or she was chosen for the position or can be dismissed from the position, and how important the work is to both the business and the worker. Importantly, the court will also look at compensation. The more food or other benefits a volunteer receives, the more likely they are legally an employee. An individual’s status as an employee is usually determined only after the court looks at the facts of the individual case, so it’s hard to make generalizations. The FLSA grants a special exception for volunteers of public agencies or non-profit food banks, but that’s it.

Farmers might be thinking, “I’m caught at every turn. I might have to pay my employees, my apprentices, my interns, and maybe even my volunteers minimum wage?” That might be the way it is. We don’t know exactly because the precise facts haven’t been litigated. But all is not lost. Farms might be cash-poor, but they are usually food-rich. Farms can supplement money wages with food and housing to total minimum wage.

If a farm offers food and housing, the total fair market value of all compensation should equal minimum wage for all the time worked. To determine the fair market value, look around at what similar accommodations go for. If you have a 1-room cabin with indoor plumbing and a small kitchenette, what’s the rent on a similar cabin in a similar location and with the same amenities? If you offer a yurt and there isn’t a yurt for rent your side of the Mississippi, things are a little harder. Let your best judgment be your guide or ask your neighbors what they think.

Finding the fair market value of food can be easy or difficult. If the farm is a CSA and each worker gets a share, the fair market value is whatever the farm charges for a share. Let’s say, for example, the farm makes all their seconds-quality produce available to workers. The problem is that the value of seconds produce is harder to determine, especially if the quality is variable. Further, how much are the employees actually taking?  If the employee doesn’t actually take food it’s going to be harder to convince a judge that the employee received part of their wages in food.   

Considering how troublesome it can be to set fair market value, getting an agreement in writing is a good practice. Agree with your intern on the value of the housing you provide and the amount and quality of the food they will accept. A signed contract isn’t a slam-dunk, but the clarity and honesty that a contract establishes goes a long way towards preventing problems.

After all these posts and long descriptions of internships and apprentices, the moral of the story is this: It’s easier to pay minimum wage than to wedge your program into an exception! Also remember that I’ve been describing federal law, and that many states have regulations that are more rigorous (but never less rigorous) than federal law. And don’t forget that what makes a person an employee for minimum wage purposes may not be the same as for workers compensation and unemployment insurance: We’ll talk about some of those issues next!

What do you think:

• That wraps up my explanation of internships, apprenticeships and the federal minimum wage. Do you have any concluding thoughts on the role these programs should play on a small to medium socially conscious farm?
• What are the most, or least, troublesome aspects of these programs?
• Do you agree that it’s probably easier to pay minimum wage, or do you think I’m forgetting something about cash flow on the small to medium farm? I would love to hear your thoughts.

The Intern That Isn’t: Part 2

Under  federal law, interns are very different than regular employees. The six criteria for a valid internship make it difficult, but possible, for a farm to utilize interns. Farms must pay careful attention to program structure, not use interns as a labor source, and communicate clearly with interns.

What’s the situation?

Internships are a very common way for farms, and many other industries, to trade wages for an educational experience. The problem is that many farmers aren’t aware that the federal government has defined exactly what an internship is and isn’t. Failure to comply with internship standards opens the farm up to a potential lawsuit.

Where does the law come in?

The law clearly states that an intern cannot be an employee. Regardless of the title given to a worker, if they look like an employee, act like an employee and are managed like an employee, that worker is an employee. Employees are regulated by the Fair Labor Standards Act (FLSA), which requires farms to pay employees the minimum wage (with the exception of federally defined “small” farms).

Details, please:

My previous post introduced readers to the background on federal internship law. Let’s recap: Interns, apprentices, and employees are three distinct worker categories. Interns and apprentices both receive education, but they are completely different in terms of regulations. Apprentices are employees that may be paid less than minimum wage. Interns may also be paid less than minimum wage but the catch is that interns are not employees. Interns may not benefit the farm – interns work exclusively for their own benefit. That’s why they aren’t classified as “employees” and why they can be paid less than minimum wage.

Internships aren’t regulated by statute; instead the 6 criteria for an internship were established through a 1940’s court case. Since then those 6 criteria have stuck, and were recently reaffirmed by the Department of Labor (DOL) in Fact Sheet #71. I need to emphasize that Fact Sheet #71 applies to for-profit businesses. If your farm is a nonprofit organization (in that  your farm is a 501(c)(3), not simply a labor of love!) then these criteria do not apply to your intern program.

My previous post discussed two of the six criteria:

1. The internship must be for the benefit of the intern.
2. The intern must not provide the business with an immediate advantage, for example, by performing the regular, productive work of the business.

This week, we’ll talk about the remaining four criteria:

3. The internship must be similar to an educational course.
4. The intern does not displace regular employees.
5. The intern is not entitled to a job at the conclusion of the internship.
6. The intern and employer understand that the worker is not entitled to compensation.

If each of the six criteria aren’t met, the worker is an employee and falls under the regulations of the FLSA.

Number four states that an internship has to look like an educational course. At first, this seems do-able because we know the farmer provides instruction to new hires about the mechanics of farming. Let’s take tomatoes- you show the new guy how to trench seedlings, how to trellis growing plants, how to determine ripeness, and then how to clip, store, and display tomatoes for sale. That’s a thorough education. But I’m not sure that would satisfy the DOL. Fact Sheet #71 specifically states that the position must be “structured around a classroom or academic experience,” which is quite different than inserting educational content into a work experience.  If a farm has established curricula to teach tomato production, they stand a better chance of meeting this criterion.

Criterion four is a tricky one: the intern cannot displace regular employees. If a farmer hires interns instead of employees, she’s clearly not meeting this criterion. But what if the farmer decides to hire an intern or hire no one at all? You can hear him say, “My intern doesn’t displace an employee because I wouldn’t hire employees anyways. I would just work longer, harder hours if the intern wasn’t around.” It’s a good argument. But I don’t know of the court would buy it. These issues haven’t been litigated. A good lawyer could certainly argue that the farmer is not his own employee and therefore his intern doesn’t displace himself. But in that case you probably have a “small farm” and are exempt from the FLSA, including the requirement to pay minimum wage as a whole.

Criteria five and six are relatively straightforward. Farmers cannot use internships to trial-run potential new employees. Fact Sheet #71 seems to say that the trial-run exists according to the intern’s perspective. If the intern thinks she’ll be awarded a permanent position if she does well enough, the farmer might violate this criteria. Lastly, both farmer and intern must understand that the intern is not entitled to wages. Again, the emphasis should probably be on the intern’s perspective. Promising performance bonuses or a stipend if the intern works at least a certain amount of time would probably violate criterion six.

These criteria are challenging but still do-able. The bottom line is that interns are not employees. Internships are educational programs, not affordable labor mechanisms. If a farm does not structure their internship program in accordance with federal law and either the intern or the government files suit, the farmer could potentially be liable for employee back wages plus back taxes. I highly doubt the DOL will be showing up at the farm gate anytime soon. But regardless, every business owner should be aware of these regulations and use them to guide their decisions.

Next up: Can you just call your interns “volunteers” instead and avoid the six criteria? We’ll also talk about meeting minimum wage requirements with food and housing instead. Sooner or later we’ll discuss new state internship laws.

What do you think?

• If we all know that most industries don’t follow internship criteria should farmers hold themselves to the criteria?
• What makes farmers more or less likely than other industries to be sued on this issue?

NYFC Needs Your Input on Organics

Next week, NYFC will testify at a USDA listening session on organic agriculture and we need your input on what to tell agency officials. We need to know about your experiences with the National Organic Program and conservation programs like EQIP, as well as the challenges that you may be facing as an organic producer and ideas about how the USDA can help.

In the comments section, please tell us:

• Your experience with the National Organic Program
• Your experience with USDA conservation programs, such as EQIP and CSP
• Your experience with USDA as an organic farmer
• Challenges that you’re facing as an organic farmer. 

Legal and Insured Farm Internships in the Works in WA

The Washington State Department of Labor and Industries is taking a new approach to farm internships. In 2010, the Washington legislature authorized the Small Farm Internship pilot program in Skagit and Island counties, allowing young and beginning farmers to intern on small farms in order to learn about farming and farm businesses.  This program does several important things for farms and eager  interns. One is that it acknowledges the work-for-learning trade of a farm internship in place of the more typical work-for-money trade.  Eligible small farms–farms with annual sales of less than $250,000–can enroll by submitting an internship plan describing the parameters of the internship, the type of work each intern is expected to perform, and what they will learn. Enrolling in the program allows unpaid farm interns to be covered by discounted Workers Compensation insurance. That means if an intern is injured, the medical expenses could be covered by Labor and Industries. Without the insurance, the intern and the farm would have to pay out of pocket.

As we see it, this is an opportunity to create a model that protects both the farm and intern. They need your feedback to make sure they know there is support for the program, and to help design it so it works for farmers and interns.

For a thorough discussion of the general legality of farm apprenticeships and internships, please see NYFC guest blogger Rachel Armstrong’s latest–and next–few posts.