[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:]

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
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    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:]

    
    
    
    
    
    
    
    
    
    
    
    
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    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



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    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:]

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
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    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:]

    
    


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    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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