Labor shortages and farmer adaptation strategies

Abstract

Labor shortages are a growing challenge for U.S. agricultural producers, but little is known about farmers' adaptation strategies. We estimate the statistical relationship between farm labor shortages and adaptation strategies among California farmers. We find that increasing wages is the most common response, followed by changes in cultivation practices, adoption of labor-saving technologies, and use of farm labor contractors. Labor shortages are associated with an increase in the probability of raising wages by 21 percentage points and changing cultivation practices by 9 percentage points. These effects are more pronounced for labor-intensive crop farmers, highlighting the need for targeted support strategies.