A farmworker picks a cluster of cherries off a tree at Cooper Family Orchards in The Dalles on June 30, 2023.

SALEM — Two years ago, Oregon lawmakers passed a new law requiring growers to provide farmworkers with overtime pay — a requirement opponents said could drive small, family-owned farms out of business.

In response, the state crafted a zero-interest loan program to help farmers cover that cost. But despite extensive outreach and marketing, much of the $10 million made available through the program remains untapped a year later, data shows.

To qualify for the awards, created under House Bill 2058, farmers must anticipate that they won’t make more than $3 million in gross income in the calendar year and the loan must be repaid within two years.

An official with the Oregon Business Development Department says the agency hasn’t seen much demand for the program’s funds.

The state’s agricultural overtime law — which will fully phase in by 2027 — also provides tax credits over six years to help farmers mitigate the overtime costs. The tax credit program also has barely been used, thus far.

Oregon has an estimated 35,500 farm operations that spread across 15.3 million acres, with an estimated 174,000 farmworkers.

“We did not receive a significant amount of inquiries about the program after legislation passed and prior to opening the first round of funding,” Nathan Buehler, a spokesperson for Oregon Business, said of the loan initiative.

As of April 17, only $603, 496, or 6.03%, of the program’s funds have been disbursed since the first application period opened in late April 2023, Oregon Business data shows. A total of $9.4 million remains unused and will be available through June 30, 2025.

Oregon Business has received 36 applications for the program, Buehler said, but some withdrew or weren’t eligible. Twenty-five applicants were successful, with the average award of $27, 431. The cap is $40,000.

Buehler said the agency saw “demand taper off since mid-2023,” but the money is still available for eligible entities to tap into “should they need it.”

“With the current trend of applications received, the numbers suggest we will not run out of funding,” he said.

Greg Addington, executive director for the Oregon Farm Bureau, referred questions to Jenny Dresler, director of regulatory affairs with Public Affairs Counsel.

Dresler, who is the Farm Bureau’s contracted lobbyist and was engaged in the overtime law debates, said farmers expressed concerns about the way the program was structured. They had wanted grants instead of loans, she said.

She also pointed to 2023 being a difficult harvest year as a possible reason for the program’s low participation.

Growers are not going to apply for the repayable award program, Dresler said, when there are other mechanisms available for them to control costs, such as capping workforce hours, increasing mechanization and switching to different crops.

“A lot of the agricultural stakeholders said our folks are never going to borrow on a future that they don’t know,” she said.

Growers are currently echoing some of the same concerns as they push back on rule changes to improve farmworker housing.

The repayable award program hasn’t been the only measure to see low interest, however.

The Oregon Department of Revenue received 369 applications in 2023 for the agricultural employer overtime tax credit program, said Rudy Owens, a spokesperson for the agency.

Those who applied and were eligible will be notified of their credit amount no later than June 1.

Thirty-two of those applications were from Oregon’s dairy sector, which includes an estimated 228 dairy farms. Farmers who are eligible to apply for the tax credit are also eligible to apply for the interest-free loan.

State officials say the low participation in the programs isn’t due to a lack of outreach.

The Department of Revenue and Oregon Business conducted extensive outreach, such as holding listening sessions, attending events and conferences statewide, and advertising in multiple local media outlets.

“We expect that the number of applications could grow for future years when the overtime threshold hours decrease,” Owens said of the tax credit program. “The department will continue to do outreach throughout the year.”

Beginning in 2023, farmers were required to pay time and a half to workers who work more than 55 hours a week. The threshold will decrease to 48 hours in 2025, and to 40 in 2027.

Dresler said she couldn’t “guess at the reason” for the low participation in the tax credits but pointed to concerns expressed by farmers in 2022. At the time, farmers said the tax credits were dysfunctional and inadequate.

Most operations were able to keep hours under the 55-hour threshold as a result of low harvest yields in 2023, she said. When asked why 2023 was a difficult harvest year, Dresler said she didn’t know, but imagined “there were some climate forces at play.”

Patti Verduzco, communications director at PCUN, Oregon’s largest farmworkers union, didn’t respond to inquiries about how the overtime law has been playing out for workers.

The overtime exemption for farm workers was enacted during the Jim Crow era. Oregon was the eighth state to grant overtime pay to farmworkers.

“We are going to start to see a shift in what Oregon agriculture looks like in response to this policy,” Dresler said. “Maybe it becomes more mechanized and maybe we see a movement to other crops that don’t require labor in the same way as we historically have.”

Dresler, however, wasn’t able to point to evidence that any farms have gone out of business or have been forced to sell their operations as a direct result of the law’s implementation, thus far.