    [House Hearing, 112 Congress]
    [From the U.S. Government Publishing Office]

                       AMERICAN SPECIALTY AGRICULTURE ACT

    =======================================================================

                                    HEARING

                                   BEFORE THE

                                SUBCOMMITTEE ON
                       IMMIGRATION POLICY AND ENFORCEMENT

                                     OF THE

                           COMMITTEE ON THE JUDICIARY
                            HOUSE OF REPRESENTATIVES

                          ONE HUNDRED TWELFTH CONGRESS

                                 FIRST SESSION

                                       ON

                                   H.R. 2847

                                   __________

                               SEPTEMBER 8, 2011

                                   __________

                               Serial No. 112-52

                                   __________

             Printed for the use of the Committee on the Judiciary

          Available via the World Wide Web: http://judiciary.house.gov

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                           COMMITTEE ON THE JUDICIARY

                          LAMAR SMITH, Texas, Chairman
    F. JAMES SENSENBRENNER, Jr.,         JOHN CONYERS, Jr., Michigan
        Wisconsin                        HOWARD L. BERMAN, California
    HOWARD COBLE, North Carolina         JERROLD NADLER, New York
    ELTON GALLEGLY, California           ROBERT C. ``BOBBY'' SCOTT,
    BOB GOODLATTE, Virginia                  Virginia
    DANIEL E. LUNGREN, California        MELVIN L. WATT, North Carolina
    STEVE CHABOT, Ohio                   ZOE LOFGREN, California
    DARRELL E. ISSA, California          SHEILA JACKSON LEE, Texas
    MIKE PENCE, Indiana                  MAXINE WATERS, California
    J. RANDY FORBES, Virginia            STEVE COHEN, Tennessee
    STEVE KING, Iowa                     HENRY C. ``HANK'' JOHNSON, Jr.,
    TRENT FRANKS, Arizona                  Georgia
    LOUIE GOHMERT, Texas                 PEDRO R. PIERLUISI, Puerto Rico
    JIM JORDAN, Ohio                     MIKE QUIGLEY, Illinois
    TED POE, Texas                       JUDY CHU, California
    JASON CHAFFETZ, Utah                 TED DEUTCH, Florida
    TIM GRIFFIN, Arkansas                LINDA T. SANCHEZ, California
    TOM MARINO, Pennsylvania             DEBBIE WASSERMAN SCHULTZ, Florida
    TREY GOWDY, South Carolina
    DENNIS ROSS, Florida
    SANDY ADAMS, Florida
    BEN QUAYLE, Arizona
    [Vacant]

          Sean McLaughlin, Majority Chief of Staff and General Counsel
           Perry Apelbaum, Minority Staff Director and Chief Counsel
                                     ------

               Subcommittee on Immigration Policy and Enforcement

                      ELTON GALLEGLY, California, Chairman

                        STEVE KING, Iowa, Vice-Chairman

    DANIEL E. LUNGREN, California        ZOE LOFGREN, California
    LOUIE GOHMERT, Texas                 SHEILA JACKSON LEE, Texas
    TED POE, Texas                       MAXINE WATERS, California
    TREY GOWDY, South Carolina           PEDRO R. PIERLUISI, Puerto Rico
    DENNIS ROSS, Florida

                         George Fishman, Chief Counsel

                       David Shahoulian, Minority Counsel

                                C O N T E N T S

                                  ----------

                               SEPTEMBER 8, 2011

                                                                       Page

                                    THE BILL

    H.R. 2847, the ``American Specialty Agriculture Act''............     3

                               OPENING STATEMENTS

    The Honorable Elton Gallegly, a Representative in Congress from
      the State of California, and Chairman, Subcommittee on
      Immigration Policy and Enforcement.............................     1
    The Honorable Zoe Lofgren, a Representative in Congress from the
      State of California, and Ranking Member, Subcommittee on
      Immigration Policy and Enforcement.............................    43
    The Honorable Lamar Smith, a Representative in Congress from the
      State of Texas, and Chairman, Committee on the Judiciary.......    45

                                   WITNESSES

    H. Lee Wicker, Deputy Director, North Carolina Growers
      Association
      Oral Testimony.................................................    47
      Prepared Statement.............................................    50
    Chalmers R. Carr, III, President and CEO, Titan Farms, South
      Carolina
      Oral Testimony.................................................    53
      Prepared Statement.............................................    56
    Dan Fazio, Director, Washington Farm Labor Association
      Oral Testimony.................................................    62
      Prepared Statement.............................................    64
    Robert A. Williams, Director of Migrant Farmworker Justice
      Project, Florida Legal Services
      Oral Testimony.................................................    83
      Prepared Statement.............................................    86

              LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

    Material submitted by the Honorable Zoe Lofgren, a Representative
      in Congress from the State of California, and Ranking Member,
      Subcommittee on Immigration Policy and Enforcement.............   108

                                    APPENDIX
                   Material Submitted for the Hearing Record

    Letter from Michele Besso, Attorney at Law, Northwest Justice
      Project........................................................   128
    Letter from Robert A. Williams, Attorney at Law, Florida Legal
      Services, Inc..................................................   129
    Prepared Statement of Tyler Moran, Policy Director, and Maura
      Ooi, Legal Intern, National Immigration Law Center.............   162

                       AMERICAN SPECIALTY AGRICULTURE ACT

                                  ----------

                          THURSDAY, SEPTEMBER 8, 2011

                  House of Representatives,
                        Subcommittee on Immigration
                                Policy and Enforcement,
                                    Committee on the Judiciary,
                                                        Washington, DC.

        The Subcommittee met, pursuant to call, at 2:15 p.m., in
    room 2141, Rayburn Office Building, the Honorable Elton
    Gallegly (Chairman of the Subcommittee) presiding.
        Present: Representatives Smith, Gallegly, King, Gowdy,
    Ross, Lofgren, and Jackson Lee.
        Staff present: (Majority) George Fishman, Subcommittee
    Chief Counsel; Marian White, Clerk; and (Minority) David
    Shahoulian, Subcommittee Chief Counsel.
        Mr. Gallegly. I will call the hearing to order.
        Today, the Subcommittee on Immigration Policy and
    Enforcement is holding a hearing on H.R. 2847, the ``American
    Specialty Agriculture Act,'' which was introduced yesterday by
    Chairman Lamar Smith.
        H.R. 2847 creates an entirely new agricultural worker visa
    program, referred to as the H-2C program, which is designed to
    provide a stable and secure labor force for American farmers.
        I would like to commend my colleague and friend Chairman
    Smith for his hard work on this issue and for introducing this
    legislation. I share Chairman Smith's goal of creating a more
    user-friendly guestworker program that will help agriculture
    find qualified workers in a very timely manner.
        I will not describe in detail the elements of the American
    Specialty Agriculture Act. However, I did want to highlight two
    important provisions which are an improvement over the current
    H-2A program.
        First, the new H-2C program will be administered by the
    Department of Agriculture. This is the Federal department which
    is most familiar with the operations of the agricultural
    industry. From a California perspective, I believe the
    Department of Agriculture will better understand the labor
    needs of growers of specialty crops and the need to avoid long,
    bureaucratic delays.
        Second, H.R. 2847 makes the H-2C program attestation-based,
    much like the H-1B visa program. This is in contrast to the
    much more time-consuming labor application process that is part
    of the H-2A program. Again, this will reduce delays which have
    often made the H-2A program unworkable for many if not most
    agricultural employers. In my congressional district, where
    specialty crops are predominant, growers have repeatedly told
    me the key factor in being able to utilize a guestworker
    program is the ability to hire workers without long lead times.
        Again, I thank the Chairman for bringing this work forward
    and dealing with this very complicated issue. And I look
    forward to the hearing of our witnesses.
        And at this time I would yield to the gentlelady from
    California, the Ranking Member, Ms. Lofgren.
        The bill, H.R. 2847, follows:]

                                   __________

        Ms. Lofgren. Thank you, Mr. Chairman.
        I think we need to be honest about why we are here today.
    The majority wants to make E-Verify mandatory for all employers
    nationwide. That is their real goal.
        But politically, they can't do that without having an
    answer to the disastrous impact that mandatory E-Verify has
    already had on the economies of several States, particularly
    agriculture. The reports are everywhere.
        After making E-Verify mandatory, Georgia and Alabama lost
    many of the farmworkers they need to harvest their crops, not
    just the undocumented ones, but those with papers, too. As
    harvest time came, farmers tried everything to find workers. As
    a last-ditch effort, our former colleague, Governor Nathan Deal
    in Georgia, even resorted to busing ex-convicts to the fields,
    and nothing worked.
        One of those probationers was quoted by Politico as saying,
    ``Those guys out here weren't out there 30 minutes and they got
    the bucket and just threw them in the air and say, `Bonk this.
    I ain't with this. I can't do this.'"
        Farmers were forced to abandon acres of fruits and
    vegetables, which literally rotted in the fields. Bo Herndon, a
    farmer in Toombs County, Georgia, lost $150,000 in Vidalia
    onions. Georgia farmer Gary Paulk lost $200,000 when piles of
    his blackberries rotted on the floor.
        It is estimated that Georgia alone will incur losses of
    $250 million to $300 million this year. That total could reach
    $1 billion next year, according to the Georgia Agribusiness
    Council. Families who have been working their land for
    generations are talking about having to give up their farms.
        The majority says this bill is the answer, but it is not a
    solution. Instead, it is an acknowledgment that the majority's
    enforcement-only mantra is not the right approach, that
    mandatory E-Verify without other changes will hurt our country,
    and that America's farms are at least partially dependent on
    immigrant workers.
        But rather than do something about immigrant workers who
    are already here, workers who, as this bill makes clear, we
    need and who have been providing critical services to the
    country for years, this bill's answer is to bring in a half
    million new workers each and every year in some misguided
    effort to replace the old workers.
        How can anyone think the answer to our agriculture labor
    needs is to deport over a million ag workers already here,
    workers who have experience, who know where to go, what to do,
    when to do it, just to ship in a half million new workers every
    year, year after year after year? How does this make sense to
    anyone?
        If we can admit we need the workers, why on Earth spend an
    exorbitant amount of money deporting the millions we already
    have just to bring in new workers who will need to be recruited
    and retrained by America's farmers, putting the financial
    burden on them?
        And how can anybody possibly think this will work? The
    majority's own witness, Lee Wicker, testified in our last
    hearing on the H-2A program that a major problem with the
    program is how difficult it is to get consular interviews for
    prospective workers and to have them be timely so that harvests
    aren't missed. This bill doesn't fix that problem.
        Recently, I got a letter from an ag group that surveyed--
    that 72 percent of the growers they surveyed reported that
    workers in the H-2A program came after the date of need an
    average of 22 days after they were needed in the fields.
        So instead of fixing the problem, that problem, this bill
    explodes it. If we have trouble getting 50,000 H-2A workers in
    for interviews and into the U.S. on time every year, imagine
    how much trouble we will have with 10 times that many.
        But even if the government could magically make the program
    work, which I doubt, a big impact would be to increase
    unemployment for Americans. While undocumented workers make up
    the vast majority of fieldworkers, this is not true in other ag
    sectors, such as dairy, livestock, and animal husbandry.
        In these areas where work tends to be year-round rather
    than seasonal, U.S. citizens and permanent residents still make
    up the bulk of the workers. And this bill for the first time
    would open up those jobs to foreign workers. Unlike current H-
    2A workers who can only fill seasonal jobs, the bill's workers
    could compete for permanent jobs as well. And because the bill
    slashes wages and worker protections, it actually would create
    an incentive for employers to replace their current American
    workers with cheaper H-2C workers.
        The majority is selling this bill as a way to replace
    undocumented farmworkers, but it actually is designed to
    replace Americans, and that is no answer either.
        But this is the choice the majority has left us. Why?
    Because the one answer that makes the most sense, finding a way
    to legalize and stabilize the current workforce for the good of
    both the farmer and farmworker, is off the table. And why is
    that? It is ideology, pure and simple.
        Let's discuss the ideology. The only reason the majority
    will not even consider the most common-sense solution here is
    because of their supposed hatred of amnesty and devotion to the
    rule of law. But is that really the case?
        Our laws have been broken for decades, failing to meet the
    needs of entire industries, particularly agriculture, so people
    took matters into their own hands. Yes, the farmworkers came
    here to work in the fields without obeying immigration rules.
    But essentially, every farmer in the country did the same thing
    by hiring them.
        The majority says the farmworkers have to pay for their
    transgressions with deportation and family separation. But what
    about the farmers? Where is their penalty? Where is the bill to
    divest them of the money they made by relying on undocumented
    labor? Where is the majority's hatred for amnesty with respect
    to them? And what about the government? What price should we
    pay for essentially ignoring the needs of American businesses
    and families for decades?
        We should all get real here and do what is right for the
    country. We simply can't allow ideology to trump common sense.
        I yield back.
        Mr. Gallegly. The gentlelady's time has expired.
        The gentleman from Texas and the sponsor of the
    legislation, the Chairman of the full Judiciary Committee, Mr.
    Smith?
        Mr. Smith. Thank you, Mr. Chairman.
        I also thank you, Mr. Chairman, for both your interest in
    this subject and your expertise in regard to this subject as
    well.
        The agriculture industry needs to hire hundreds of
    thousands of seasonal workers each year to put food on
    Americans' tables. However, many workers with better options
    choose to work elsewhere. Even though Congress devised the H-2A
    program to meet the needs of our growers, half of farmworkers
    remain illegal immigrants. This is because, as the Department
    of Labor has admitted, most growers ``find H-2A program so
    plagued with problems that they avoid using it altogether.''
        Our agriculture guestworker program needs to be fair to
    everyone it impacts--American growers, farmworkers, consumers
    and guestworkers.
        A program must provide growers who want to do the right
    thing with a reliable source of legal labor. It must protect
    the livelihoods of American workers and the rights of
    guestworkers. And it must keep in mind the pocketbooks of
    American families.
        H.R. 2847, the ``American Specialty Agriculture Act,''
    accomplishes these goals. It establishes an H-2C guestworker
    program responsive to the needs of American growers while
    maintaining strong policies to protect citizens and legal
    workers. And it does so without the fraud-ridden mass amnesty
    for illegal immigrant farmworkers that failed 1986.
        The H-2C program makes commonsense changes to the current
    bureaucratic, unworkable H-2A program. Under the current H-2A
    program, users believe that they face a culture of hostility
    within the Department of Labor. That is why the bill puts the
    Agriculture Department in charge of the H-2C program.
        Growers have to contend with a steep mountain of red tape
    to secure H-2A workers. The Bush Administration tried to
    streamline the process by making it ``attestation''-based, just
    like the H-1B program for high-skilled workers. Unfortunately,
    the Obama Administration rescinded these changes. The bill
    makes H-2C program attestation-based as it once was.
        Growers have long complained about the tremendous expense
    of the H-2A program and the required ``adverse effect'' wage
    rate, which, in my judgment, is artificially high. After
    factoring in other program expenses, such as housing,
    processing fees, and transportation costs, H-2A users have to
    pay up to $15 an hour for H-2A workers. This puts them at a
    competitive disadvantage in the marketplace.
        The bill requires growers to pay H-2C workers and American
    workers the prevailing wage, which is lower than the ``adverse
    effect'' wage rate but is high enough to prevent the program
    from depressing the wages of American workers.
        The H-2A program requires that growers provide H-2A workers
    with free housing. This can be burdensome for those growers who
    may need foreign workers for only a few weeks a year. The bill
    allows growers to provide a housing voucher instead of actual
    housing.
        Dairies and certain other agriculture producers cannot use
    the H-2A program because they employ workers year-round, and
    the H-2A program is only available for temporary or seasonal
    work. The bill opens up the H-2C program to these employers.
        Growers who use the H-2A program are constantly subject to
    abusive and frivolous litigation by H-2A workers. The bill
    allows growers to include binding arbitration in contracts with
    H-2C workers.
        It is crucial to ensure that H-2C workers remain
    guestworkers. The bill, therefore, requires workers to return
    home after 10 months each year.
        Finally, the bill allows up to a half-million foreign
    workers a year to receive H-2C visas. This will be more than
    enough to make up for a loss of illegal immigrant workers.
        American specialty crop growers hire about 800,000
    individual farmworkers each year on a seasonal basis. The U.S.
    Department of Labor reports that 48 percent of seasonal
    agriculture workers are illegal immigrants. Half a million H-2C
    workers more than meets the legitimate need.
        The American Specialty Agriculture Act finally puts in
    place a fair and workable guestworker program for American
    growers. It will help American growers hire a legal workforce
    and protect American workers. And it will help ensure that
    American growers continue growing our crops and helping our
    economy.
        I look forward to hearing from our witnesses today.
        I yield back, Mr. Chairman.
        Mr. Gallegly. I thank the gentleman.
        Mr. Conyers is not here.
        We have four very distinguished witnesses on our panel
    today. And I would ask that you all try to keep your initial
    testimony to 5 minutes, in the interest of time, so we will
    have an opportunity to ask questions. And your entire
    testimony, without objection, will be made a part of the record
    of the hearing.
        Our first witness, Mr. Lee Wicker, is deputy director of
    the North Carolina Growers Association, the largest H-2A
    program user in the Nation. Prior to this position, he worked
    for the North Carolina Employment Security Commission as the
    technical supervisor for farm employment programs and the
    statewide administrator for the H-2A program.
        Mr. Wicker has been growing flue-cured tobacco with his
    family in Lee County, North Carolina, since 1978. He graduated
    from the University of North Carolina at Chapel Hill, and I am
    sure our colleague Mr. Coble would be very happy to know that
    you are here today.
        Our second witness is Mr. Chalmers Carr. He serves as
    president and CEO of the Titan Peach Farms Inc., which is South
    Carolina's largest commercial peach operation. He also is
    treasurer of the South Carolina Peach Council and chairman of
    the South Carolina Farm Bureau Labor Committee.
        Mr. Carr began his farming career in 1990 and has been with
    Titan Farm since 1995. He has participated in the H-2A program
    now for 13 years.
        Mr. Carr received his bachelor's degree from Clemson
    University.
        Our third witness, Mr. Dan Fazio, is an attorney and the
    director of the Washington Farm Labor Association, a nonprofit
    trade association he founded in 2007 to serve labor-intensive
    agriculture employers and workers in the Pacific Northwest.
    Prior to working at the Labor Association, Mr. Fazio was the
    director of employer services at the Washington State Farm
    Bureau Federation.
        His formal comments to the H-2A regulation led to changes
    which made the program much easier to use for Washington
    employers.
        Mr. Fazio received his B.A. from the University of
    Rochester, his M.S. from the University of Southern California,
    and his J.D. from Seattle University.
        And our fourth witness, Mr. Robert Williams, is the
    director of the Migrant Farmworker Justice Project at Florida
    Legal Services, Inc. He provides representation to migrant
    farmworkers in Florida and offers legislative and
    administration advocacy on their behalf.
        Prior to this, he worked for the Florida Rural Legal
    Services, Inc. Mr. Williams also represents the United
    Farmworkers with respect to ongoing efforts to pass a
    farmworker immigration reform.
        He received his B.A. from the University of Michigan and
    his J.D. from Harvard Law School.
        So we have some very distinguished witnesses, and with
    that, we will start with Mr. Wicker.

             TESTIMONY OF H. LEE WICKER, DEPUTY DIRECTOR,
                   NORTH CAROLINA GROWERS ASSOCIATION

        Mr. Wicker. Good afternoon, Mr. Chairman and Committee
    Members. I am Lee Wicker, deputy director of the North Carolina
    Growers Association. Thank you for holding this hearing on a
    critical issue for labor-intensive agriculture.
        As the largest H-2A program use in the Nation, NCGA
    currently has 600 grower members that will employ nearly 6,000
    H-2A workers and many thousand more U.S. workers this season.
        In this Committee's April 13 hearing on the H-2A program, I
    identified the chronic problems that undermine farmer
    confidence and make hiring illegal workers a more attractive
    option. While the American Specialty Agriculture Act is not
    perfect in all areas, from the perspective of this group of
    long-term H-2A program users, the proposed H-2C program is
    close enough.
        The measured reforms go a long way toward solving the most
    onerous flaws in H-2A. This proposal is evidence the U.S. can
    have a workable farmworker program that treats workers well and
    carefully balances all the critical elements, worker
    protections, and economic viability for farmers.
        Significant reforms are made to the prohibitive program
    costs, and H-2C makes improvements in other important areas.
    The bill provides a realistic market-based prevailing wage as a
    floor that surpasses the Federal minimum by more than 10
    percent in North Carolina, on average, and even higher wages in
    specific areas.
        It also authorizes piece-rate pay systems on top of the
    super-minimum wage to promote higher earnings as a financial
    reward for increased worker productivity.
        It allows farmers and farmworkers who benefit from working
    together in the program to share the program costs, offers
    structured portability, encourages a streamlined legal dispute
    resolution system to solve farmworker complaints quickly and
    efficiently, provides authority to the USDA for streamlined
    administration of the program, and makes farmer obligations
    clear and understandable.
        These improvements will provide a viable alternative to
    employing illegal aliens and will give farmers confidence that
    they can participate in the H-2C program successfully.
        This legislation continues the long-standing principle of
    giving American workers preferential consideration in obtaining
    these jobs by requiring farmers to solicit U.S. workers through
    the local employment service and prescriptive newspaper
    advertisements before foreign workers may be employed.
        The bill maintains valuable employee benefits and critical
    worker protections for domestic and foreign workers, like
    extension of the minimum-hours guarantee, mandatory worker's
    compensation insurance coverage for workplace illnesses and
    injuries, and conditional perspective in- and outbound
    transportation, and subsistence reimbursement.
        The bill continues the requirement to provide free,
    inspected on-farm housing and offers a housing voucher
    provision that will allow farmers without on-farm housing to
    participate. It requires comprehensive recordkeeping and
    reporting obligations.
        The wage and benefit package will cost North Carolina
    farmers on average $10 to $12 per hour. The proposal imposes a
    robust enforcement regime and maintains a strong penalty
    structure for violations and severe penalties for gross
    material violations.
        All the economic benefits and worker protections in this
    bill will provide workers who accept these jobs assurance they
    will enjoy a high-wage benefit package, a safer work
    environment, and quick resolution of their grievances.
        When the public policy debate heats up about farm labor, we
    frequently hear worker representatives scream about the past
    and cite what the 60-year-old Bracero program was like and
    insist that all guestworker programs are the same. There is no
    legitimate comparison to H.R. 2847.
        The NCGA board of directors voted unanimously to endorse
    and support this proposal. It offers great employment
    opportunities and provides growers with a program that is
    substantially more predictable and user-friendly. The delicate
    balance in this bill between administrative improvements for
    farmers, worker benefits and protections, represents a win for
    farmers, a win for farmworkers, and it secures a safe food
    supply for Americans into the future.
        Passage of H.R. 2847 will save and help create more jobs
    for Americans on and off the farm. I applaud Chairman Smith's
    leadership on this issue.
        There is no time to waste. The House should pass this
    legislation as quickly as possible.
        The NCGA board also voted unanimously to join the U.S.
    Chamber of Commerce and others in support of H.R. 2164, the
    Legal Workforce Act, because it is time to level the playing
    field for all employers. More than 20 States have already
    enacted some version of E-Verify in the vacuum of Federal
    inaction. Recent decisions from the Supreme Court are signals
    that it is time for Congress to lead and pass a national
    standard so that employers, including farmers, operating in
    multiple States can comply with the law more easily.
        Some in agriculture are ringing the alarm bell in an effort
    to scare farmers to opposing H.R. 2164, because the bill
    mandates E-Verify only for new hires, proposes a special 3-year
    implementation provision, and offers an exemption for returning
    workers. We believe farmers and farmworkers have been given
    special consideration to preclude and avoid disruptive worker
    movements and extra time to transition into compliance.
        Passage of H.R. 2847, the ``American Specialty Agriculture
    Act,'' will help make this transition easier. The H-2C program
    will provide a predictable, efficient, and affordable process
    for hiring workers in temporary seasonal jobs.
        Farmers and farmworkers want to comply with labor and
    immigration laws. Congress should pass the American Specialty
    Agriculture Act so they can.
        Thank you, and I look forward to your questions.
        [The prepared statement of Mr. Wicker follows:]

                                   __________

        Mr. Gallegly. Thank you, Mr. Wicker.
        Our next witness, a constituent of one of our Committee
    Members, Mr. Gowdy, Mr. Chalmers Carr. Welcome.

     TESTIMONY OF CHALMERS R. CARR, III, PRESIDENT AND CEO, TITAN
                         FARMS, SOUTH CAROLINA

        Mr. Carr. Thank you, Chairman.
        Good afternoon. My name is Chalmers Carr, and I am the
    owner and operator of Titan Peach Farms in Ridge Springs, South
    Carolina.
        Growing 5,000 acres of peaches and 700 acres of vegetable,
    my company has been legally employing H-2A guestworkers for the
    last 13 years.
        I want to thank you for inviting me here today to share my
    thoughts with you on the American Specialty Agriculture Act and
    why I believe this bill will give lasting positive effects to
    agriculture as we know it today.
        I am also president of USA Farmers, a national organization
    representing agriculture employers throughout the country, and
    our organization unanimously supports the Chairman's bill.
        Presently, many States have passed their own immigration
    laws and employment verification bills. And without question,
    the greatest negative impact of these laws will be felt by the
    agriculture industry. These actions prove that now is time for
    Congress to reform the agriculture guestworker program,
    ensuring that farmers have access to a sufficient pool of legal
    labor.
        If a bill creating a viable guestworker program, like the
    one offered by the Chairman today, is not passed, the
    agriculture industry as we know it in this country today will
    no longer exist, and we will become dependent on foreign
    countries to feed and clothe Americans.
        Only a small portion of American agriculture employers
    participate in the H-2A program currently. It is not widely
    used because of its lack of accessibility, bureaucratic nature,
    high cost of participation, and the readily available supply of
    other labor sources. It is my opinion, though, that farmers
    would participate in a guestworker program, provided it is
    accessible to all sectors of agriculture, did not place a
    growers at a disadvantage in the marketplace, was simple to
    administer, and was free from frivolous lawsuits.
        As proposed, the Chairman's bill positively addresses most
    of agriculture's major concerns that have been raised about
    guestworker programs. It expands the use of the program across
    the entire industry by dropping the illogical requirement for
    seasonal employment, but yet focuses on the guestworker being
    temporary other than the job.
        In addition, I would also like to see that this bill
    clearly addresses agriculture processors--are able to
    participate.
        Transferring the program from the Department of Labor to
    the Department of Agriculture is another very positive step. It
    is logical that the Federal agency most accustomed to servicing
    the agriculture industry should be the one to administer a
    guestworker program for that same industry.
        The Chairman's bill calls for the use of a prevailing wage
    for similar employment in a regional area. This approach is
    much preferred to the current adverse wage effect rate, which
    has often been criticized for years for its artificially high
    wage rates that fail to reflect actual market wages in
    particular localities.
        I support the Chairman's provision but would also suggest
    that consideration be given to a wage rate that is tied to the
    Federal minimum wage. Such a solution would provide the needed
    transparency to the process and would help guard against
    manipulation of wages by administrative agencies.
        The Chairman's bill also removes the requirement of hiring
    U.S. workers beyond the start date of employment period.
    Considering the high unemployment rates, there should be enough
    U.S. workers available for agriculture jobs. However, the
    reality of the situation is the vast majority of Americans
    choose not to work in production agriculture.
        Last year alone, my company experienced a significant
    increase in the number of U.S. workers applying for jobs.
    However, of the 285 U.S. referrals applying for jobs and were
    offered employment, 60 never reported to work; 190 quit, most
    of them by the end of the second day; another 20 were
    terminated for cause; and only 15 workers actually made it to
    the end of the contract.
        This bill makes much-needed improvements to the problem of
    predatory lawsuits by allowing the inclusion of mediation and
    arbitration language in job contracts to resolve employment
    disputes, as opposed to costly lawsuits.
        It also allows employer-provided housing vouchers.
        Reforms of this nature will increase grower participation
    in guestworker programs.
        In closing, I would like to commend Chairman Smith for his
    vision in recognizing the dilemma that is facing specialty crop
    agriculture today, and for his leadership in offering a
    solution to this problem.
        In America, we have the safest and cheapest food supply
    available in the world. Without a viable worker guest program
    in this country for agriculture, that will no longer be the
    case, and our domestic food production will be moved abroad.
        And so I leave you with this question: Would you choose to
    have the food you feed your family grown on the fertile soils
    in America under the governance of USDA and harvested by
    lawfully admitted foreign workers, or would you accept having
    the food put on your dinner table tonight grown in a foreign
    country with unknown production practices and no food safety
    protocols? Understand either way the food will still be
    harvested by a foreign worker.
        I sincerely hope Congress chooses to ensure that American
    farmers will continue to be able to feed Americans at home with
    plenty left over to feed the rest of the world.
        Thank you for your time and consideration today.
        [The prepared statement of Mr. Carr follows:]

                                   __________

        Mr. Gallegly. Thank you, Mr. Carr.
        Mr. Fazio?

                   TESTIMONY OF DAN FAZIO, DIRECTOR,
                   WASHINGTON FARM LABOR ASSOCIATION

        Mr. Fazio. Good afternoon, Chair Smith, Chair Gallegly, and
    Ranking Member Lofgren, and Members of the Committee.
        Thank you for allowing me the privilege of testifying
    before you today. My name is Dan Fazio, and I am the director
    of the Washington Farm Labor Association.
        In my remarks today, I am speaking for my association and
    its members, representing many labor-intensive agriculture
    sectors across our State. Our association is responsible for
    about three-quarters of H-2A applications submitted in our
    State. As we all know, the H-2A program does not work for
    farmers or farmworkers.
        I am here to testify in support of H.R. 2847, the
    ``American Specialty Agriculture Act,'' and to urge that your
    Committee work to perfect it in a bipartisan manner.
        I am here to testify on behalf of Steve Sakuma, a third-
    generation berry grower from Burlington, Washington, about an
    hour north of Seattle, who hires about 3,000 workers each year
    and who recently made headlines by admitting in an AP story
    that the majority of his employees are probably not work-
    authorized.
        Mr. Sakuma is a retired Army colonel. His dad and uncles
    proudly fought in World War II, even though the Sakumas
    temporarily lost their farm to the internment of Japanese-
    Americans serving during the war.
        We recently held a workforce summit, and I asked Mr. Sakuma
    why he spoke out on this issue when he surely risks a raid by
    ICE and unhappy corporate customers. He told me that he did it
    because it was the right thing to do. He told me that no one
    loves this country more than his family and it is our duty to
    work together to fix this problem.
        So on behalf of Steve Sakuma and Sakuma Brothers Farms,
    please pass this bill.
        This bill addresses immigration reform, but it is really a
    jobs bill. It will increase employment, and I will tell you
    how. Right now in Washington State, it is harvest time. The big
    crop is apples. We grow more apples than all States put
    together, and it takes a lot of workers, more than 30,000 of
    them, to pick those apples.
        The workers earn about $13 an hour, and in the course of
    our 70-day apple harvest, the average worker will pick over 100
    tons of apples. According to economists, each one of those
    workers will create 2.5 jobs in trucking, processing, and
    exporting. About 75 percent of those harvest workers or more
    are undocumented.
        What happens when we don't have enough workers for the
    apples or the dozens of other commodities that are currently in
    harvest? It happens every year, and it almost always hits the
    small growers.
        Let me tell you about one of the small growers, Julie
    Michener from Grandview, Washington. Julie had 28 acres of
    apples that didn't get picked in 2009 because there were no
    workers. She lost hundreds of thousands of dollars, and the
    world lost over 100 tons of apples. Next year, Julie pushed
    over most of the trees and created a pumpkin patch and a corn
    maze.
        When small growers abandon their orchard, it robs workers
    of good-paying jobs, it robs our Nation of export revenue, and
    it robs a hungry world of nature's most healthy bounty.
        So on behalf of Julie Michener, please pass this bill.
        If there is one change I could suggest, it would be to
    allow employers and workers to extend the visas so that it
    makes it easier for full-time employers, like dairy farms, the
    shellfish industries, and dozens of other full-time agriculture
    employers to use the program.
        Right now, I am working with Ian Jefferds, a shellfish
    producer from Oak Harbor on the Whidbey Island, who was
    notified by ICE last week that 34 of his 62 workers are not
    work-authorized, and so he needs to let them go. These are
    full-time, highly trained workers. Most of them make more than
    $50,000 a year in a rural town with limited job opportunities.
    And these workers are all going to be let go from jobs that
    they love.
        So on behalf of Mr. Jefferds and his workers, please pass
    this bill.
        I could go on and on, but I will leave you with this: Our
    immigration policy should serve our national interests. In this
    case, our economic interest is served when we allow people to
    come to do the jobs that Americans don't want to do and then
    return home.
        The reason that seasonal agricultural doesn't attract
    Americans has nothing to do with Americans being lazy and
    everything to do with the job. This is hard, seasonal work that
    typically lasts for 6 months per year. In addition, it is
    sporadic. One week you work 20 hours; the next week you work 60
    hours. There is little upward mobility, and the wages that are
    offered, generally $9 to $14 per hour, are not likely to
    increase, because it is a high limit in order to be
    internationally competitive.
        If farmers are forced to pay more, they made to it, but
    they may also lose important export markets, just as we lost a
    large portion of our manufacturing sector when it was no longer
    internationally competitive.
        By allowing people to do these jobs, we create more jobs
    that Americans do want, again benefiting our economy.
        Finally, anyone who has been to Ellis Island knows that our
    immigration policy must serve a higher moral purpose. Right
    now, families in Mexico and Central America are starving
    because they can't find work. The typical agriculture job in
    southern Mexico, when you can find work, pays under $10 per
    day, while the standard in the U.S. is $100 a day. If you
    provide us a workable guestworker program, we can harvest our
    fruit and lift these human beings out of poverty.
        I urge you to send this bill out with a bipartisan vote,
    and thank you very much.
        [The prepared statement of Mr. Fazio follows:]

                        Prepared Statement of Dan Fazio

                         ADDENDUM TO PREPARED STATEMENT

                                  ATTACHMENTS

                                   __________

        Mr. Gallegly. Thank you, Mr. Fazio.
        Mr. Williams?

    TESTIMONY OF ROBERT A. WILLIAMS, DIRECTOR OF MIGRANT FARMWORKER
                JUSTICE PROJECT, FLORIDA LEGAL SERVICES

        Mr. Williams. Thank you, Chairman Gallegly, and Ranking
    Member Lofgren, and Members of the Subcommittee, for the
    opportunity to testify today----
        Ms. Lofgren. Would you bring your mic a little bit closer?
        Mr. Williams--on the American Specialty Agriculture Act.
        We are told that a new guestworker program is needed
    because mandatory E-Verify will make it more difficult for
    American agriculture to go on employing 1 million unauthorized
    farmworkers, and there are no Americans available to take these
    jobs. I am very skeptical that agriculture will stop using
    unauthorized workers even if the E-Verify bill becomes law.
    Allowing former employees to avoid verification on the fiction
    that they are returning from a seasonal layoff ensures that a
    large pool of unauthorized workers will be available to the
    agriculture industry for the foreseeable future.
        I do agree that the million unauthorized workers cannot be
    easily replaced with Americans. However, it is all too easy to
    replace hundreds of thousands of American farmworkers with
    guestworkers, and that is what I believe will be the unintended
    consequence of this legislation.
        Instead of moving us in the direction of a stable domestic
    workforce of better-paid and more productive U.S. workers, it
    will leave us more dependent than ever on foreign agricultural
    workers.
        Bringing in an additional 500,000 guestworkers or roughly
    one-fourth of the entire current workforce with minimal labor
    protections at a wage rate considerably lower than what
    farmworkers are being paid today will dramatically lower the
    wages and working conditions for America's poorest workers,
    with the probable result that hundreds of thousands of U.S.
    workers will exit agriculture.
        I want to focus my remarks on the wage issue, because at
    the end of the day, I think that is what this debate is really
    all about. The immediate effect of this bill is to transfer
    $150 million per year from the pockets of H-2A workers and
    maybe a few U.S. workers to the current H-2A employers. Many of
    these workers earn less than $10,000 per year, so they are
    going to miss the money. But if fully implemented, this bill
    could cost farmworkers in the United States $1 billion a year
    in lower wages.
        Two weeks ago, the Department of Agriculture released its
    farm labor report for July, a report which is based on a survey
    of 12,000 ag employers that shows that in July field and
    livestock workers in the United States were paid an average of
    $10.25 per hour. That is certainly less than what non-ag
    workers make, but it is not the minimum wage, either. That is
    the real market wage. It is not an artificial wage. It is what
    growers actually report paying their workers.
        We need to protect that wage. But if you bring in a half-
    million workers at a substantially lower wage, you will create
    a powerful economic incentive to replace U.S. workers with
    guestworkers, and that is exactly what this legislation does.
        It allows an employer with guestworkers to offer a wage
    which is the median of the lowest one-third of the wage
    distribution. This is the so-called level one wage. In
    practice, this wage is generally in the 15th to 20th percentile
    range. In other words, 80 percent to 85 percent of the workers
    surveyed are paid more than this wage level. By definition, it
    is a substandard wage.
        And perhaps a real-life example will make it clear, how
    large the incentive is to prefer a guestworker over U.S.
    workers. Currently, according to DOL's online wage library,
    livestock workers in Ventura County, California, are being paid
    $12 per hour. For a year-round employee, this amounts to about
    $25,000 per year. But the level one wage is only $8.93 per
    hour.
        My guess is that an employer advertising for American
    workers will get very few takers at a wage rate that is $3 less
    than the going rate. But under Chairman Smith's bill, he can
    get an H-2C worker.
        The saving in employing a guestworker over a U.S. worker is
    more than $6,000 per year. But that is not the only saving. The
    employer does not have to pay FICA and FUTA taxes on the H-2C
    worker. This results in an additional savings of $2,500. When
    the cost differential between a U.S. worker and a guestworker
    is nearly $9,000 a year, we have set the stage for a massive
    displacement of U.S. workers.
        For months, we have heard that E-Verify is a jobs bill for
    American workers. But for the poorest workers in America, it
    turns out to be just another jobs giveaway.
        Thank you.
        [The prepared statement of Mr. Williams follows:]

                                   __________

        Mr. Gallegly. Thank you very much, Mr. Williams.
        Quickly, if I might go back to Mr. Fazio, just as a point
    of interest, you mentioned an employer that recently was
    contacted by ICE. And I don't remember exactly what the numbers
    were, but he was told that he had to get rid of 50 or 60
    employees out of how many?
        Mr. Fazio. Yes, he had 62 full-time workers, and his ICE
    Notice of Suspect Documents had 34 names on it. Some of those
    workers may appeal, one or two, but it is over 50 percent, and
    this is full-time.
        Mr. Gallegly. Okay, just as a point interest, this is a
    Federal enforcement agency that came out and said that you are
    going to have to let these folks go, because they are illegally
    in the country?
        Mr. Fazio. What they said was that the documents that they
    presented when they were hired in the attestation that the
    workers gave was incorrect, and the documents were, in their
    opinion, fraudulent documents. And so unless they could provide
    a different document, that the employer had to let them go.
    That is correct.
        Mr. Gallegly. Does that mean letting them go down the
    street and go to work somewhere else?
        Mr. Fazio. That is exactly what happens. Yes.
        Mr. Gallegly. And did that mean that you were going to be
    fined for having these folks? Or is it just like our job is to
    stick our head in the sand, and when we have something laid in
    front of us that is blatantly against the law, we have to do
    something about it, and that is to shift it from point A to
    point B without any real enforcement; is that a fair
    assessment?
        Mr. Fazio. What will happen is if the farmer made some
    paperwork violations in their I-9, if they didn't cross the t's
    or dot the i's correctly, they will receive a fine for
    incorrectly filling out the I-9. But in the case of the
    employees, the employees are going to go down the street.
        As a matter fact, they will go to other shellfish farms----
        Mr. Gallegly. But this enforcement agency, when they have
    are convinced that these people have no legal right to be in
    the United States, instead of dealing with them, they tell the
    employer to get them out of here, until it comes up again. That
    is a rhetorical question.
        Mr. Williams, isn't it true that the general rule for
    temporary worker programs is that guestworkers are paid
    prevailing wage for their occupation, just like the H-2C
    program?
        Mr. Williams. Yes, the prevailing wage, historically, in
    our guestworker programs has been an average wage. That was the
    concept of the prevailing wage all along. And it makes sense,
    because if you want to protect the wages of U.S. workers,
    obviously, admitting a bunch of people at a wage under the
    average is going to pull down the average and depress the wage.
    So the wage is an average wage.
        And the current wage, the dreaded adverse effect wage rate,
    is simply an average wage paid field and livestock workers. And
    it is a much more accurate wage level than the one that they
    want to use, because it is based on a very sound survey by the
    Department of Agriculture that is methodologically sound.
        And the accuracy rate, the national figure that I just
    quoted, the sampling error there is only .7 percent. It is a
    very accurate statistic. It is not an artificial statistic or a
    made-up number. It is what workers are being paid on average.
        Mr. Gallegly. Which is obviously, at least minimally, and
    in all cases, more than what minimum wage would be?
        Mr. Williams. Yes, and I think it is also really important
    to note about those statistics, they include the wages of
    hundreds of thousands of unauthorized workers. If somehow we
    could pull out the wages of unauthorized workers who are being
    paid on the bottom of the wage scale, you would see that the
    wages paid American farmworkers are considerably higher than
    the wages that we are asking to pay--growers are asking to pay
    now under the----
        Mr. Gallegly. I think that that is one of the objectives of
    having a guestworker program, that you would have people
    legally here. And I don't mean to be combative, but it appears
    to me that you are arguing against your case.
        Mr. Williams. No, I am arguing for protecting the wages of
    the 600,000 to 800,000 American farmworkers.
        Mr. Gallegly. You appear to believe that the guestworker
    program represents indentured servitude. Is that correct?
        Mr. Williams. The guestworker program is not indentured
    servitude quite. But on the other hand, it is also not free
    labor. It is a situation where you can only work for one
    employer. You don't have the freedom to walk across the street
    and work for someone else who pays you better or treats you
    better. And so in that sense, it is a captive program. It is
    not a free labor market.
        Mr. Gallegly. One final question before my red light comes
    on, you have been on record as a supporter of AgJOBS Amnesty;
    is that not correct?
        Mr. Williams. That is certainly accurate.
        Mr. Gallegly. Doesn't AgJOBS also include a guestworker
    program?
        Mr. Williams. It does. And AgJOBS is a compromise.
        Mr. Gallegly. And isn't that basically what we are dealing
    with here? You oppose it if it comes under AgJOBS, but you
    oppose it if it comes under this category?
        Mr. Williams. No, because AgJOBS, the H2 program, the
    reform contained in AgJOBS, is providing some significant
    protections for workers that aren't in the current H-2A program
    and certainly aren't in this bill.
        This bill goes the other way. Rather than strengthening the
    H-2A program's protections for workers, this bill greatly
    lowers them.
        Mr. Gallegly. Well, I think we disagree on that a little
    bit, because one of the benefits of this program is that it
    takes folks out of the shadows, gives them legal authority, and
    protects them openly by all the labor laws in the country. And
    I would certainly think that is better than the status quo.
        Mr. Williams. Well, this doesn't take anybody out of the
    shadows. The current million people who are unauthorized are
    ineligible for this new H-2C program. They remain in the
    shadows. They are not going anywhere. They are staying here.
    They are going to be in the shadows. That is one of the biggest
    problems.
        Any attempted solution to the problem that neglects the
    million workers that are here, and their 500,000 children, is
    not a solution.
        Mr. Gallegly. I would love to have a little more time on
    this, but out of respect for my colleagues, I would yield to
    the gentlelady from California, the Ranking Member of the
    Subcommittee, Ms. Lofgren.
        Ms. Lofgren. Thank you, Mr. Chairman.
        I would just note, Mr. Fazio, your comment about the 34
    farmworkers who are going to be fired, under this bill they
    would also be fired, because they would not be eligible to get
    the temporary visa.
        Just as an aside, Mr. Williams, I think it is important to
    understand how this bill undercuts wages, because of the tier
    one issue. We took a look at some of the data. And just for
    example in North Carolina, the adverse wage rate is $9.30 an
    hour. Taking Sampson County, the Bureau of Labor Statistics
    average wage for crop workers was $9.59 an hour. But level one
    wage for that same country was $7.61 an hour. And the way, as I
    understand it, you advertise as if it is a level one status,
    because nobody is exploring that, and you lower the wage by a
    couple bucks an hour, which is significant, I would think,
    especially given farmers are working on very low margins. I
    mean, it is a hard business to be in.
        In addition to that, you don't have to pay unemployment
    insurance or Social Security for the H program. I mean, in the
    ag sector you do, and some other temporary programs.
        So what amount--that is about 10 percent, isn't it?
        Mr. Williams. That is correct.
        Ms. Lofgren. So really, it is a substantial incentive to
    replace American workers with temporary workers on a wage
    basis, isn't it?
        Mr. Williams. And that is the entire problem. If we want to
    solve----
        Ms. Lofgren. Pull the microphone, so I can hear, a little
    bit closer.
        Mr. Williams. That is the entire problem. If we want to
    solve this problem, we have to get the incentives right.
        Right now, yes, we use a lot more undocumented workers than
    we do H-2C workers--H-2A workers, and that is because it is
    cheaper to employ undocumented workers. We can say, well, we
    can replace them. We can replace the undocumented workers with
    H-2C workers, if we made it as cheap to employ them as it is to
    employ illegal aliens, maybe.
        I think, though, the more likely consequence is you would
    replace American workers, because by replacing an American
    worker, you save even more money, because the American workers
    are paid more.
        If we really want to solve the problem, we have to turn it
    around to a point where it is cheapest to employ an American
    worker.
        Ms. Lofgren. Let me ask you this, in terms of farmworkers
    who are here in violation of the immigration laws, they are
    here working without their papers, there has been speculation,
    I think it is correct, I mean these are people in many cases
    who have been here many years, they have family, kids, the
    like, they are not going anywhere voluntarily, because they
    live here.
        How are they going to, if we do this E-Verify bill, how are
    they going to ever get employed again? I mean, in your
    testimony, you talked about the role of labor contractors and
    how that folds in. Can you explain that?
        Mr. Williams. Right. Whenever we talk about doing anything
    regulatory with agriculture, the one gigantic loophole that
    exists in all our labor laws and frustrates all our efforts to
    improve things are the farm labor contractors.
        And what will happen, I am quite confident, as a result of
    the passage of the E-Verify law, will be a further progression
    toward growers turning over the total hiring function to labor
    contractors to insulate themselves from liability.
        That started, roughly, with the passage of IRCA. After IRCA
    passed, with its modest employer sanctions, one of the first
    things that happened was the percentage of workers that were
    hired through farm labor contractors started growing. It has
    been growing ever since. And this E-Verify thing will be the
    last straw, because they will all be hired in the future
    through labor contractors.
        And labor contractors are very difficult to regulate. There
    are only about 12,000 of them, but entry and exit is easy. They
    are undercapitalized. They are really not responsible players.
    You can do things to them, you can penalize them, you take
    their license away, another one will spring up the next day.
        Ms. Lofgren. Well, if I may on that point, one of the
    concepts that we have explored--and California actually
    regulates the farm labor contractors, is that if you were to
    use a contractor who wasn't subject to regulation, that you
    would also be in violation. Isn't that something we ought to
    look at?
        Mr. Williams. Well, I think, and I suggested in my
    testimony, that one very effective way to get at the problem of
    unauthorized employment in agriculture is to go after the farm
    labor contractors and require them to E-Verify.
        Why wait 3 years? Why give the worst violators in the
    United States a 3-year pass?
        I mean, when you think about it, the 12,000 farm labor
    contractors in the United States have a huge role in bringing
    in the entire unauthorized population, because agriculture is
    often the gateway job. It is the contractors who deal directly
    with the traffickers, the coyotes, the smugglers. They are the
    first job for so many people coming to the United States. If we
    were serious about doing something about the problem, I would
    say that they would be very good people to go after.
        They are also people with an unparalleled record of labor
    abuse. They are exploitative employers. Why not look at them
    first?
        And I think it would be much better to focus and really
    enforce the law against a small group of employers and actually
    follow through with it for once then to cast a wide net--for
    example, all of agriculture, a 100,000 employers, many of whom
    only employ a few workers. And all those guys in the Midwest,
    they don't employ any undocumented workers. Why not focus on
    the heart of the problem?
        And that is why I have also recommended that we go back and
    make it a violation of the Migrant and Seasonal Agricultural
    Worker Protection Act for contractors to employ unauthorized
    workers and, thereby, give workers the right to sue.
        We run across cases all the time where U.S. workers
    complain that they have been discriminated against. Give them
    the right to enforce the law, too. And I think we would go a
    long way toward getting at the problem.
        Ms. Lofgren. Mr. Chairman, I know that my time has expired,
    but I would like to ask unanimous consent to place in the
    record a statement from Richard Trumka, the president of the
    AFL-CIO; testimony from Eliseo Medina, the secretary-treasurer
    of SEIU; a statement of Mark Ayers, the president of the
    Building and Construction Trades; and a letter from Bruce
    Goldstein, the president of Farmworker Justice--all in
    opposition to the bill--as well as a letter to Chairman Smith
    from 68 organizations in opposition.
        Mr. Gallegly. Without objection.
        [The information referred to follows:]

                                   __________

                                   __________

                                   __________

                                   __________

                                   __________

        Mr. Gallegly. Now the Chair recognizes the Chair of the
    full Committee and the sponsor of this legislation, the
    gentleman from Texas, Mr. Smith.
        Mr. Smith. Thank you, Mr. Chairman.
        Mr. Wicker, thank you for your statement today. In your
    written statement, you mention that the H-2C program could well
    improve wages and conditions today in the ag industry. Tell me
    why you believe that to be the case?
        Mr. Wicker. Well, first of all, the current H-2A program
    wage source comes from the United States Department of
    Agriculture National Ag Statistics Service Farm Labor Survey,
    and they do it quarterly. And they average together wages. And
    they don't tell farmers what this survey is about.
        And to the extent that farmers fill out these wage surveys,
    I think that they want to look good to the government. And so
    they send in these surveys and they pick out the wages that
    they are paying their workers, probably on piece rate, on their
    best day at the peak of harvest when they have the most
    workers. And so it seems to me that that is inflating the wages
    under this survey system. Growers don't know what the survey
    data represents.
        And so the H-2C proposal, if the more growers would use a
    legal program, that means less workers will be working for farm
    labor contractors that Mr. Williams talks about, and we don't
    know what those workers are earning. The illegal workers that
    work under the auspices of farm labor contractors, registered
    or not, most of the time on most of these farms, the grower
    writes one check to the crew leader. It might be eight bucks an
    hour for all of the workers they provide. But we don't know
    what they pay the workers. It is not eight bucks an hour.
        So it is our view that when workers come in under a
    structured program like H-2C, with oversight and transparency,
    and the grower is the employer and they are writing a check to
    the worker, everybody knows what the deal is upfront. Workers
    have assurances that they are not going to be cheated.
        This is going to raise wage rates for all of these workers
    who are on these farms illegally that come in under the H-2C
    program.
        Mr. Smith. Thank you, Mr. Wicker.
        Mr. Carr, by the way, you are--if he is still here--
    represented by a particularly able Member of Congress, Mr.
    Gowdy, who is an outstanding Member of this Committee.
        Mr. Carr, my question to you is, you say in your testimony
    that under the current H-2A program, the ag industry who is
    trying to do the right thing is at a competitive disadvantage
    with those who hire illegal immigrants. Why is that? Can you
    explain that?
        Mr. Carr. Yes, I can. It goes to wages. It goes to the
    bureaucracy of the program and the cost of participating in the
    program.
        As I stated, I have worked in this program for 13 years,
    and I have seen wage fluctuations from one Administration to
    the next.
        Currently, this year, my company received a 28 percent wage
    increase mandated by the current Administration. Those changes
    are very hard to absorb.
        Congresswoman Lofgren talked about wages and having
    predictability in wages and how they need to be streamlined.
    But what we saw this year is an agency put a 28 percent
    increase on us, and we have to absorb that.
        Last year, we paid the OES wage that was talked about
    earlier, the prevailing wage, and it was $7.25 an hour, and
    that was the prevailing wage of all fruit harvesters in my
    geographic area. This year, I had to go to $9.11.
        I am competing against the California peach industry as my
    number one competitor. They pay $8.25 an hour. Now, I pay $9.11
    an hour plus free housing, free transportation to and from, and
    all the fees associated with it, just to be legal. We need to
    level the playing field.
        Mr. Smith. Thank you, Mr. Carr.
        Mr. Fazio, I was going to ask you what you thought about
    the H-2A program, the current program, but used every word but
    dysfunctional. If you want to use that, you are welcome to use
    that, too.
        But let me ask you this, as far as the proposed H-2C
    program, what do you think is its main advantage over the H-2A
    current program?
        Mr. Fazio. Well, first of all, I will tell you, Chairman
    Smith, on the West Coast, there is very little use of the H-2A
    program. In Washington State, it is about 5 percent of the
    seasonal workers. In California and Oregon, it is less than 1
    percent. It is like a half of a percent. And we have got--I
    can't come here--we produce more peaches in Washington and
    California than they do in South Carolina and Georgia. And I
    can't legitimately come here and tell this person we are going
    to out-produce you because we can hire workers and pay less,
    because we are hiring illegal workers. We have got to, as
    leaders in our industry, we have got to do something about this
    issue.
        It is the number one issue in Washington State, the
    workforce. We need a legal and stable workforce. How the H-2C
    program works is it makes the program able to be used, I think,
    the housing program is a very, very big--the housing issue is a
    very, very big problem.
        Let me give you an example. Under the H-2A program, the
    current H-2A program, you have to provide housing for all the
    workers that you bring up here, but you also have to provide
    extra housing. And we are talking about--in California and
    Washington, housing is extremely scarce. You have to provide
    extra housing because at any time a person--or, excuse me, in
    the first 50 percent of the contract, a person can come and
    say, ``I want that bed.'' And it has happened to us.
        I can tell you the stories of people who say that--that
    come and said: I want that bed, and you have 24 hours to get
    that H-2A worker out of there and make the bed available for
    the domestic worker.
        So housing is a huge area of concern for us.
        And I'll stop there, because there are many, many other
    areas of concern. But we have got to make the program work on
    the West Coast, where there is about 35 percent of the
    seasonal----
        Mr. Smith. Okay, thank you, Mr. Fazio.
        Thank you, Mr. Chairman.
        Mr. Gallegly. The gentleman from South Carolina would like
    to speak about how sweet the peaches from California are,
    right?
        Mr. Gowdy. I don't think I have enough time to get to that,
    Mr. Chairman. If I had more than 5 minutes, I would, probably.
        I want to thank you for holding this hearing and thank Mr.
    Smith for his leadership on this.
        Mr. Carr, Mr. Williams testified about the animus he
    believes that you hold toward American workers, so I want to
    give him the benefit of going back through the numbers that you
    testified to. If I wrote this down correctly, there were 285
    domestic applicants?
        Mr. Carr. That is correct.
        Mr. Gowdy. Sixty never showed up for work?
        Mr. Carr. Correct.
        Mr. Gowdy. One-hundred-ninety were gone before the second
    day?
        Mr. Carr. Just about second day, yes, sir.
        Mr. Gowdy. Twenty were dismissed for cause?
        Mr. Carr. Correct.
        Mr. Gowdy. And 15 made it?
        Mr. Carr. That is correct.
        Mr. Gowdy. So I want you to forgive my former high school
    math, but an attrition from 285 to 15 means you would have to
    go through that process almost 20 times to get the workforce
    that you were looking for?
        Mr. Carr. That is correct.
        Mr. Gowdy. Is your crop likely to survive that process?
        Mr. Carr. No, sir, it could not.
        Mr. Gowdy. He was very thinly veiled with his belief that
    you hold an animus toward American workers, and I am struggling
    to figure out what that could be, because you don't have to pay
    transportation costs for American workers, do you?
        Mr. Carr. That is correct.
        Mr. Gowdy. But you do for visa workers?
        Mr. Carr. Yes.
        Mr. Gowdy. Do you have to provide American workers with
    housing vouchers?
        Mr. Carr. No, we do not.
        Mr. Gowdy. So why would you not be better off hiring
    American workers?
        Mr. Carr. I would be better off hiring American workers, if
    there were----
        Mr. Gowdy. So what is the source of his belief that you
    hold some animus toward American workers?
        Mr. Carr. I cannot answer that question, sir.
        Mr. Gowdy. Well, let me see if I can ask one that you can
    answer.
        Litigation abuses. Have you experienced any of those? Have
    you experienced any overzealous taxpayer-funded investigators
    that come and look for split screens that may have been split
    30 seconds before the investigator got there? Do you have any
    horror stories with respect to that?
        Mr. Carr. I don't have particular horror stories like the
    rest of the industry that I have heard from my neighbors and
    colleagues. But, yes, just last year, we were written a letter
    on behalf of the worker who was claiming wrongful dismissal
    even though he was caught on surveillance tape fraudulently
    documenting his entry and exit time for work. And we ended up
    having to settle that case to get that worker money to return
    back home to Mexico. And we settled that case out of the
    benefit of the fact that it was going to be a whole lot cheaper
    to do that than it was to go through the court system.
        But that is the only case that has ever been brought
    against my company in terms of workers. But frivolous lawsuits
    in the Southeast have decimated the H-2A program over the last
    7 to 10 years. Growers get in for 1 or 2 years and have been
    litigated right out of the program.
        Mr. Gowdy. All right, I want to ask you about two specific
    provisions, one with respect to our friends in the dairy
    business. Is 10 months adequate? And if you were to suggest a
    tweak to this Committee, what would that tweak or fix be?
        Mr. Carr. We have to understand in a lot of things that we
    talk about today, there are regional differences within this
    country, and it is hard to talk about a program and even
    differences among ourselves based on Western philosophies and
    Eastern philosophies.
        But when it comes to year-round employment such as the
    dairy industry, I can understand that if I was a dairy producer
    that it would be difficult for me to know that every 9 months
    or 10 months, I would have to change the workforce.
        But I think having the opportunity to participate in a
    program where they would have access to legal workers, they
    could make those adjustments.
        A tweak to that would be for year-round operations,
    especially operations such as livestock, to make it on an
    annual or 12-month process, where they would have to re-
    advertise that job every 12 months instead of every 10 months.
        But the bottom line to the Chairman's bill is, by including
    all of agricultural into this program, you are going to help
    transition agriculture into a guestworker program, which they
    currently can't use right now.
        Mr. Gowdy. You wrote in your testimony that on-farm
    processors should be allowed to use the guestworker program.
    Can you expand on that?
        Mr. Carr. It is not clear in the Chairman's bill whether
    processors that further processor their products--and let's
    understand that the growing trend, especially crop agriculture
    right now today, is to further process your products anyway you
    can by adding value to them. So we want to be sure that any
    guestworker bill clarifies that a producer that processes 50
    percent or more of his own product could use the H2 or H-2C
    program.
        Mr. Gowdy. Mr. Carr, I want to thank you for coming. I want
    to thank you for your advocacy on behalf of farming. We have
    met several times. We have scores and scores of mutual friends
    in South Carolina. And I think the American farmer is a
    patriot. And I thank you for your willingness to put up with a
    labyrinthal Federal system, to try to preserve that American
    journey.
        Mr. Carr. Congressman, I want to thank you for your
    leadership within our State for holding some of the hearings
    that you have held and the conversations you have held on the
    subject, because it is near and dear to our State, as well as
    it is to all of agriculture.
        Mr. Gowdy. Thank you.
        Mr. Gallegly. I thank the gentleman from South Carolina.
        The gentleman from Florida, Mr. Ross?
        Mr. Ross. Thank you, Mr. Chairman.
        Mr. Carr, I have to comment as well on your testimony, just
    because I come from a strong agricultural district I think Mr.
    Williams may be familiar with. It is in between Tampa and
    Orlando. We consider ourselves the citrus capital of the world.
    Of course, my Chairman might disagree with that.
        But last year we had acres of citrus, strawberries,
    blueberries, and tomatoes die on the vine for lack of labor.
    And I have a good friend of mine, Bo Bentley of Bentley
    Brothers Harvesting, who, like you, employs through the H-2A
    program. But unfortunately, by playing by the rules, they have
    an unfair--or competitive advantage that some of their
    competitors have because they don't.
        And unfortunately, the H-2A program has led to a black
    market of illegal workers who have come over here and has been
    the morass that we now have today.
        And I have to give Chairman Smith a great deal of credit
    for bringing this forward. I think it is a step in the right
    direction.
        Mr. Fazio, I want to ask you a question really quickly
    about the 50 rule. Why is it important that this be eliminated
    in this bill?
        Mr. Fazio. Well, the 50 percent rule says that you are
    forced to hire all domestic workers that show up for the first
    50 percent of the contract period. And the current
    interpretation by the Department of Labor is that if you have
    one guestworker on your property, you are liable to hire an
    infinite number of domestic workers.
        We have small farmers who have maybe 20 workers on there
    that they are going to use in the H-2A program, and they are
    hiring the domestic workers as they come on board, but they are
    scared to use the program because they said, you know, someone
    could put me out of business who doesn't like this program by
    just sending 100 domestic workers.
        Mr. Ross. And they have to keep the job open for them,
    don't they?
        Mr. Fazio. Yes.
        Mr. Ross. And they could be sued if they don't, can't they?
        Mr. Fazio. That is correct, sir.
        Mr. Ross. And they have been, in fact, which leads me to my
    next question now.
        In this particular bill, there is binding arbitration. What
    has been your experience in terms of lawsuits and the effect
    that binding arbitration would have?
        Mr. Fazio. We clearly need something. I think that the
    legal services community are zealous advocates and they are
    excellent lawyers. And we try to work as hard as we can with
    them. I have talked--there are two legal services in just about
    every State now. The State and Federal grantee, and then
    another legal services component that is privately funded or
    funded by the IOLTA, the Interest on Lawyers Trust Account,
    which I won't get into.
        But I am working right now on a system where the legal
    services opposes the regulation, and they are going to sue the
    farmer.
        What happened was, I got a demand letter from legal
    services, and I called her right up. And I said, what is the
    nature of the demand? And she said, we want $500 per worker for
    extra expenses that the worker made in the regulation. I said,
    well, what were they? And she gave them to me. I said, none of
    those regulations--none of those expenses are required under
    the regulation. And she said, well, we don't agree with the
    regulation, and we don't believe that the regulation complies
    with the Fair Labor Standards Act, so we are going to sue you
    unless you pay us $500 per worker.
        Mr. Ross. And that problem is transcontinental, because it
    is happening in Florida as well.
        Mr. Fazio. And I said, you know, with all due respect, why
    don't you sue the Department of Labor or the government that
    put this regulation in place, because we are just following the
    regulation?
        And of course, it is a problem in the legal system. I am an
    attorney, and I know it is a problem in the legal system, when
    one person has their legal fees paid for by someone else, and
    another person has not got----
        Mr. Ross. There are incentives there.
        Mr. Fazio [continuing]. Their legal fees paid.
        And I am not suggesting any great change, but I am saying
    that is the reality. We wrote a check--we are going to write a
    check for what they ask, because we can't take that to
    litigation. It will cost us $100,000.
        Mr. Ross. Exactly. The cost of defense.
        Mr. Williams, well, let me do this.
        In the interest of time, I would like to yield the
    remaining of my time to Chairman Smith.
        Mr. Smith. Thank you, Mr. Ross.
        Mr. Williams, I wanted to address a couple questions to
    you, and this is based upon your written testimony where you
    say, ``It is not a bad thing if the recipients of the bill
    called AgJOBS eventually move on to better paying jobs.''
        I assume those better paying jobs are not in the ag field;
    is that correct? Or in the ag industry?
        Mr. Williams. Not necessarily.
        Mr. Smith. Okay, this is my question. If that is the case,
    and that is what you believe, why wouldn't that leave ag
    employers empty-handed, if you are allowing their workers to go
    leave where they are currently working and seek jobs elsewhere,
    particularly jobs that aren't in the ag industry?
        Mr. Williams. Because I believe the best reform, we could
    make in the agricultural area is to have a free labor market
    where ag has to compete with non-ag employers, and it has to
    raise its wages and benefits----
        Mr. Smith. Right. But now you are allowing foreign workers
    to compete with American workers, which, I think, puts our
    American workers at a disadvantage.
        Mr. Williams. I am talking about----
        Mr. Smith. Let me just finish real quick.
        If you do that, and allow these ag workers to seek jobs
    other than in the ag industry, number one, you are making them
    compete with American workers for their jobs. But second of
    all, you are inevitably leading to sort of this endless flood
    of immigrant labor coming into the country, are you not?
        Mr. Williams. I think I was referring to after the period
    of which under, say, in the AgJOB situation, workers became
    permanent residents. Then obviously, they no longer have to do
    the perspective work requirements, and they are free as any
    other person.
        Mr. Smith. But my point is still valid, I think, where now
    you are saying they can compete with American workers for other
    jobs, even jobs not in the ag industry; is that correct?
        Mr. Williams. I am saying that initially workers would be
    tied to the ag industry----
        Mr. Smith. But then they could leave and compete----
        Mr. Williams. But eventually, they would have the same
    freedom, the same right to choose their----
        Mr. Smith. I understand that, but the result is the same.
    They are competing with American workers for jobs.
        Mr. Williams. And American employers, agricultural
    employers, would be competing with other employers,
    nonagricultural employers, to hire those workers.
        That is the competition I would like to see.
        Mr. Smith. Well, I am more concerned about American workers
    than I am foreign workers, and that is a big difference we
    have, I think.
        Thank you, Mr. Chairman. I yield back.
        Mr. Gallegly. Thank you, Mr. Smith.
        The Chair will yield to the gentlelady from Texas.
        Ms. Jackson Lee. I thank the gentleman and the Ranking
    Member, and I am hoping the Ranking Member is going to get her
    time.
        Let me thank you. I recall, I think the Ranking Member and
    myself have been on the Committee for such a long period of
    time, I remember correcting the issue of housing and
    transportation and providing a better quality of housing for
    migrant workers. It seems like we did this through this
    Committee. And to my recollection, we might have even had
    something passed on that order.
        When I look at this, which I think is H-2C, it is almost as
    if I am leaning, I am going backwards.
        And I am very empathetic to my growers. I am from Texas,
    and we are all for talking about jobs, we are all for
    protecting American product and industry, and we want you to
    have as many workers as possible.
        In fact, I guess she can speak for herself, but a lot of
    Members on this side of the aisle have been supporting
    comprehensive immigration reform. And in agricultural, I think
    many of you know the Senator Feinstein was working on the ag.
    We were supporting that. Mr. Berman was working on it. We were
    supporting that.
        We really want to be supportive. But this is a little
    shocking.
        And I want to pose a question to Mr. Williams, I think it
    is, who is representing farmworkers. And 500,000 sounds like a
    great number. This reminds me of the Chinese workers on the
    railroad. I am not even sure whether they had housing or
    anything, but I know the conditions under which they were
    working were dire. Certainly, those who were slaves, meaning
    African-Americans, were not in the same category, who were
    slaves and indentured servants.
        But this looks along that line. And the reason why I say
    that, and maybe they were in better condition. I am not sure of
    the conditions for indentured servants; let me qualify that.
        Somebody had to put a roof over their head, and I don't
    know what kind a roof, can't document the devastating roofs
    that slaves had, but there was some kind a roof. I know it was
    devastating.
        It seems that H-2C deletes the requirements for housing,
    transportation, and some other benefits. If we had U.S. workers
    that are getting these benefits now, it seems that they would
    be the first in line to be fired, because you are pitting these
    workers coming against maybe workers that are already there.
        So, Mr. Williams, help me understand, is there an advantage
    to H-2C? Does it make sense not to provide basic benefits? And
    as well, not to allow some of these individuals that come with
    their families? Do you get a better work output from
    individuals that you don't provide housing to or
    transportation?
        Mr. Williams. I think, Congresswoman, the reason the
    protections are in the current law is that----
        Ms. Jackson Lee. Not this bill. Please be clear. You are
    talking about the current law.
        Mr. Williams. The H-2A. When they are in the current law--
    --
        Ms. Jackson Lee. Yes, and this changes the current law.
        Mr. Williams. Yes, it does. It doesn't eliminate all of
    those protections, but it weakens and modifies them. It reduces
    the transportation expense.
        For example, right now, a worker who comes from Mexico, he
    may come all the way from southern Mexico as an H-2A worker.
    Right now, his transportation is paid from his home to the
    place of employment, and return.
        Under the H-2C bill, his transportation would only be paid
    probably from the consulate, probably a consulate on the
    border. So the employer would no longer be paying for what
    might be a 500-mile trip within Mexico. So that is one of the
    changes.
        The housing provision still requires that the employer pay
    for it, but it allows the employer to pay for it through a
    voucher, and probably changes the regs for the housing a little
    bit. I mean, I guess the intent----
        Ms. Jackson Lee. And the quality of the housing that they
    might be----
        Mr. Williams. The Department of Agriculture would write
    new----
        Ms. Jackson Lee. Let me interrupt you, because I need you
    to quickly respond.
        This also puts this scheme, if you will, under the Ag
    Department. It doesn't have the infrastructure for this, versus
    the Department of Justice. Comment very quickly on that.
        And comment on the fact that in many States, the new
    immigration rules--no driver's license, you can't rent here.
    These bills are now in place in several States. What does this
    kind of new structure do to heap on top of those individuals
    that you want to have come work here?
        Mr. Williams. Well, clearly, these programs belong under
    the Department of Labor. The Department of Labor has years of
    enforcement expertise in this area. It has wage and hour
    investigators. The Department of Agriculture has none of that.
        And we have heard about how the Department of Agriculture
    is more knowledgeable, or whatever. Well, I think what is
    meant, maybe that is just code for saying the Department of
    Agriculture is grower-friendly, and the Department of Labor is
    worker-friendly.
        If you want to protect the worker's rights, you will have
    this program under the direction of the Department of Labor,
    not the Department of Agriculture.
        Mr. Gallegly. The time of the gentlelady has expired. And I
    would----
        Ms. Jackson Lee. Mr. Chairman, I would close by saying, I
    would like to be grower-friendly and worker-friendly. And I do
    believe we need comprehensive immigration reform to make all of
    this work.
        I yield back.
        Mr. Gallegly. The gentlelady's time has expired.
        Would the Ranking Member like that additional 1 minute?
        Ms. Lofgren. Thank you, Mr. Chairman. I appreciate that.
        I just wanted to make a couple of closing comments.
        First, the arbitration provision in this bill is, I think,
    particularly objectionable, because to say that the farmworker
    who is going to be paid under the bill $7.60 an hour is going
    to pay half the cost of the arbiter's salary, which is usually
    hundreds of dollars an hour, means that basically there is
    going to be no recourse.
        And I am not saying that any one of you as employers would
    do something wrong, but there are instances, unfortunately more
    than we would like, where people are cheated, not paid. And
    there has to be some recourse to justice.
        So I just think that is a very serious problem.
        And I object to the bill overall, but surely, we would not
    expect somebody who is so poor and works so hard to be unpaid
    and have no recourse to justice. That just cannot be the
    America that we believe in.
        I would just like to note that our former colleague, Adam
    Putnam, was certainly very instrumental in putting together the
    ag labor bill that had broad consensus across the aisle when it
    was introduced. I really think we would be much better off
    enacting that bill as it was written by Republicans and
    Democrats to serve both the ag industry but also the people who
    work so hard to pick our crops.
        And with that, Mr. Chairman, I appreciate the additional
    minute. And I yield back the balance.
        Mr. Gallegly. I thank the gentlelady.
        And I would also like to thank our witnesses for being here
    today.
        Without objection, all Members will have 5 legislative days
    to submit to the Chair additional written questions for the
    witnesses, which will be forwarded, and ask the witnesses to
    make an attempt to respond as promptly as possible, so their
    answers can be made a part of the record of this hearing.
        Without objection, all Members will have 5 legislative days
    to submit any additional materials for inclusion into the
    record.
        And with that, thank you very much, gentlemen, and the
    Subcommittee stands adjourned.
        [Whereupon, at 3:35 p.m., the Subcommittee was adjourned.]

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