UC Davis Agricultural and Resource Economics

Derek Farnsworth, University of California, Davis

Explaining Agricultural Labor Shortages with Unpredictable Product Losses: A Case Study of Spotted Wing Drosophila in California Raspberries

Date and Location

Tuesday, November 12, 2013, 12:10 PM - 1:30 PM
ARE Conference Room, 2102 Social Sciences and Humanities


California agricultural producers are reporting labor shortages, particularly for commodities that require considerable seasonal harvesting labor. I propose that these perceived labor shortages can be partially explained by producers misjudging market wages due to unpredictable product losses in piece-rate harvesting operations. Using a recent invasive vinegar fly infesting Central Coast raspberries as an empirical example, I model the effect of fruit losses, unobserved by managers, when compensation is tied to a piece-rate. I find that these losses cause producers to offer net earnings below a market rate, with greater losses causing more distorted wages. Rational, informed workers select growers offering the highest net earnings and avoid growers who substantially misjudge piece-rates, further compounding yield losses in fields with significant infestation. Direct fruit losses from the invasive are estimated to be 4.9% of production for conventional raspberry growers observed in a scientific study. Should these fruit losses reduce worker productivity, estimated yield losses increase to 6.0%, with harvesting labor costs increasing 12%. These results demonstrate that productivity-compensated agricultural workers have a significant monetary incentive to arbitrage between fields, explaining why some growers may have difficulty hiring sufficient harvesting labor.

Contact Us

2116 Social Sciences and Humanities
University of California, Davis
One Shields Avenue
Davis, CA 95616

Main Office: 530-752-1515

Student Advising Services: 530-754-9536