Farm Workforce Modernization Act of 2019

The Farm Workforce Modernization Act of 2019, HR4916, was referred to the Subcommittee on Immigration and Citizenship on November 15, 2019. This bill establishes a program for agricultural workers to obtain legal status and reforms the H-2A agricultural guest worker program. The immediate impact is on the availability and cost of labor for agricultural operations. A stable and legal workforce reduces uncertainty and potential disruptions in the supply chain for agricultural products. The money trail for this legislation is indirect. It does not appropriate new funds but rather modifies immigration and labor regulations. Companies that rely heavily on agricultural labor, such as large-scale farming operations and food processing companies, will experience changes in their labor expenses. Increased stability in the workforce can reduce turnover costs and improve operational efficiency. Conversely, potential wage increases or compliance costs associated with new legal status programs could increase operating expenses. Financial institutions providing services to agricultural businesses, such as Synchrony Financial ($SYF) and Capital One ($COF), may see changes in loan demand or credit risk profiles related to the financial health of these businesses. Historically, immigration reform efforts impacting agricultural labor have been contentious and slow-moving. For example, the Immigration Reform and Control Act of 1986 (IRCA) granted amnesty to undocumented workers, including many in agriculture. While direct market data for specific companies is difficult to isolate solely due to IRCA, the agricultural sector experienced a period of labor stabilization. More recently, discussions around guest worker programs have consistently highlighted labor shortages in agriculture. The lack of a comprehensive solution has led to ongoing labor uncertainty and increased operational costs for producers. Specific winners from this legislation include large agricultural producers and food processors that benefit from a stable and legal workforce, such as Archer-Daniels-Midland ($ADM), Bunge Global SA ($BG), Tyson Foods ($TSN), and JBS S.A. ($JBSAY). These companies will see reduced risks associated with labor shortages and potential disruptions. Losers are less direct but could include smaller, less diversified agricultural operations that struggle to adapt to new compliance requirements or increased labor costs. The consumer sector, particularly grocery retailers, will experience more stable supply chains and potentially more predictable pricing for agricultural products. This bill remains in subcommittee. The next step is for the Subcommittee on Immigration and Citizenship to mark up the bill and potentially vote to send it to the full House Judiciary Committee. Given its 2019 introduction date and lack of movement, significant legislative action in the near term is unlikely without renewed political impetus. However, any future movement would signal a potential shift in agricultural labor policy.