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This doesn't mean that it is good policy in this case.
Farm labor is currently the most dangerous occupation in existence (far more so than say, factory work), and prison labor managers aren't known for their attention to safety standards (hell, 47% of kids under 18 in food service jobs are doing dangerous work in violation of federal law, and many of them have parents who vote). Of course, immigrant labor isn't know for its political clout either, which partially explains why farming has remained so dangerous.
Then there is the issue that the most effective way to farm is highly mechanized and tool dependent. This isn't necessary want you want gang bangers and car thieves doing. Chain gangs died at the hands of the tractor, which made prison labor uneconomic for simple farm labor even when paid only a pittance.
In Utah, they had (and perhaps still do have) prisoners doing phone bank work, which protects the public from physical harm, although it does seem an invitation to fraud which is what many inmates are in for.
Honestly, some form of prison labor makes sense. Enforced idleness is a sure prescription for prison violence. Work builds, at least, the work habits, and possibly even the skills that prisoners will need when they get out with $100 bucks, no place to live, and a major impediment to obtaining legitimate work in most cases. Farm labor isn't building the kinds of skills they are going to need when they get out, although it may provide some sense of habitually working and an alternative to picking fights with fellow inmates.
Most prison labor is designed to minimize conflict with the private sector to avoid the sticky economic issues associated with having inmates underbid law abiding workers. This program seems to be an admission that there is no competition with the private sector because Americans won't do the work at any price that farmers want to pay.
Link: UFW Campaign of the Week - Email Colorado's Gov. today!