Business feature: Official calls ruling ‘financial blow’ to farmers

Courtesy photo: Jennifer Lansford

Matthew Lansford checks on cow and calf pairs on his family’s farm, Lansford Inc. Lansford is one of the local employers affected by the recent New Mexico Supreme Court ruling on workers’ compensation for farmers and ranchers.

Since 1937, New Mexico farmers and ranchers have been exempt from workers’ compensation — until now.

In Rodriguez v. Brand West Dairy, the New Mexico Supreme Court Thursday ruled 4-1 that state farmers and ranchers must provide employees with coverage for workplace injuries.

The decision overturned a nearly 80-year provision in the state law that allowed agricultural employers to opt out of workers’ compensation coverage for their employees, deeming it unconstitutional for its violation of the Equal Protection Clause in the New Mexico Constitution.

But what some say is a victory to workers, others argue is a hit to the agriculture industry.

“We are thrilled that farm workers finally have the right to workers’ compensation like the rest of us,” Gail Evans, legal director of the New Mexico Center for Law and Poverty, said in a phone interview Friday.

Evans said the law, which applies to an estimated 1,800 farms and ranches employing three or more people, will cover roughly 90 percent of all agriculture workers in the state and cost the industry less than 1 percent of its annual profit.

“It’s making a small group of large farms provide coverage to its employees,” she said. “It does not impact small family farms in our state, and it doesn’t impact farming practices.”

But New Mexico Farm and Livestock Bureau CEO Chad Smith would disagree.

Smith said in a phone interview Friday the decision was “something absolutely detrimental to the industry.”

“We filed an amicus on the case because we felt very passionate about it,” Smith said. “This was basically 80 years of a constitutional guarantee for our industry, and now it’s been overturned. We’re very disappointed in the decision, and it’s something that we have to deal with.”

Smith called the ruling a “financial blow” to New Mexico farmers and ranchers.

“Obviously with the price of commodities, it’s a huge impact to the industry,” he said. “You can see where it’s gonna impact everybody, but more so, the small farmers and ranchers out there that are barely making it.”

Smith said some farmers — those who can’t bear the burden of additional costs — will likely look to crops that can be harvested mechanically.

One such farmer is Mike White of Dexter, who’s also president of the New Mexico Farm and Livestock Bureau.

At W-F Farms, what White calls his “mom-and-pop operation,” there are three employees including White, his wife and his son. Because of their health insurance, the workers’ compensation coverage is a purchase White “probably will never use,” he said.

“Personally, I think it’s another mandate from the government for us to have to do paperwork and now have an additional cost we’re gonna have to incur,” he said. “And that’s an expensive fee. I don’t really like that or appreciate that out of our government.

“It’s just another one of those things where the government interceded into agriculture.”

White said it’s especially difficult for small-scale operations.

“Nowadays, you have larger farms that employ a lot more people who already have workers’ compensation,” he said. “It affects the smaller ones such as ours.”

Depending on the type of crops and economics, White said he may consider alternative crops requiring less labor.

“Like chili,” he said, “we won’t grow it unless we have mechanical harvesting. Everything we’ll try to do with less labor, but that doesn’t get us away from the cost of paperwork and inspections that come along with workers’ comp.”

He added, “Sometimes it’s misconceived that the agriculture industry doesn’t care about their workers, but we do. They actually become your family.”

Jennifer Lansford is another employer who can attest to this.

Lansford and her husband, Matthew, own Lansford Inc., a Clovis farm and cattle ranch with five employees. The Lansfords have been farming and raising cattle for 13 years.

Jennifer Lansford said the ruling is “very discouraging for employers.”

“As agricultural producers, we are price takers, not price setters,” she said. “Most other businesses can adjust their sales prices of their products accordingly to accommodate for an overhead expense such as insurance. We do not control commodity prices; therefore, we can’t recoup the cost of workers’ compensation insurance through our product sales.”

She said the rates for agricultural workers’ compensation insurance “are incredibly high right now” because there’s limited data on which companies can base their rates.

“The rates we have personally been quoted are about 15 percent of our payroll,” she said. “Obviously this is a big blow to our bottom line, as it’s coming at a time when many of the local commodities are at multi-year low.”

As for harvesting mechanically, Jennifer Lansford said she’s considering using larger, more advanced equipment that could require fewer employees.

“Technology is an important factor in the agriculture industry,” she said. “We are constantly evolving and striving towards better practices for long-term sustainability. I do think in light of the recent ruling, we may be forced to look at options that maximize our output while minimizing our labor and time.”