Farm Credit East says its new report analyzing the impact of a $15 minimum wage on agriculture is “both telling and deeply concerning.”

The financial institution, which has a branch in Potsdam, says it used conservative and historical projections to reach its conclusions, estimating a $15 minimum wage in New York State would cost farmers between $387 and $622 million in 2021 at the peak of the wage rollout. This figure resembles similar economic analysis from American Farm Bureau Federation that estimated a $500 million impact on New York agriculture’s labor costs or 25 percent of farm net income.

The report found that “The additional labor costs resulting from this proposal could clearly impact many farms’ financial viability and affect future decisions to expand or modernize facilities.”

The report, using USDA Agriculture Census data, stated about 10,000 farms in New York have hired employees. Of that number, 1,365 to 1,995 (13 to 19 percent) would be in a profit loss situation if there is no significant change in the farm economy.

The report says, “Over time, the impact of a significantly higher minimum wage in New York and not in competing states will shift agriculture in two ways. Labor-intensive agriculture operations will consider agricultural enterprises that are less labor intensive (such as fruit production shifting to grain production).” The other would be “more full-time farms will transition to part-time farms to avoid hiring labor. Overall, this will reduce the size of New York’s agricultural industry." The conclusion is that this would also effect the state’s food processing and marketing businesses.

A link to the full report can be found on Farm Credit East's website: https://www.farmcrediteast.com/News-and-Events/News/20160223NYMinimumWage.aspx.