In response to the plaintiff’s standing argument, the defendant food company or grocery store can reply that the WTO Agreements specifically contemplate allowing compensation and retaliation for injuries inflicted upon private commercial interests. Defendant would argue that it is only presenting a defense based on explicit WTO language. Moreover, defendant would argue that, if the doctrine of standing blocks the raising of the WTO-based defenses, it would face administrative actions or consumer damages under a law that very likely violates either the SPS Agreement or the TBT Agreement. Defendants would argue that such a result is unjust and legally indefensible because nobody should be held legally accountable under a law that may be itself demonstrably invalid.The hired workers who do most of California’s farm work are primarily employed to produce crops, which accounted for almost three-fourths of the state’s $37 billion in farm sales in 2010. Within crops, most hired workers are employed to produce the so-called FVH commodities, fruits and nuts , vegetables and melons , and horticultural specialties such as flowers and nursery products that generated almost 90 percent of California’s crop sales and two-thirds of the state’s total farm sales. California requires all employers with $100 or more in quarterly wages to pay unemployment insurance taxes on worker earnings. Over the past two decades, UI data show stable average annual agricultural employment of just under 400,000, but crop support employment, primarily employees of farm labor contractors, recently surpassed the number of workers hired directly by crop employers . Average annual employment is a measure of the number of year-round job slots, not the number of farm workers, because of seasonal peaks and worker turnover. For example, agricultural employment averaged 389,500 in 2011, with a peak of 452,800 in June and a second peak of 449,600 in September; the low was 311,700 in January. The employment peak-trough ratio was almost 1.5,nft vertical farming meaning that 50 percent more workers were employed in June than in January. According to Khan et al.,an analysis of individual social security numbers reported by agricultural establishments in the 1990s found almost three individuals for each year-round farm job, suggesting 1.1 million unique farm workers.
Even though the analysis removed SSNs reported by 50 or more employers in one year and jobs that generated less than $1 or more than $75,000 in quarterly earnings, some observers believe that UI data may exaggerate the number of unique farm workers. If the three-to-one ratio of workers to year-round jobs is correct, there are about 1.1 million farm workers; at two-to-one, there are almost 800,000. For most workers, farm work is a job rather than a career. A conservative estimate is that at least 10 percent of farm workers leave the farm work force each year, so that farmers rely on an influx of new entrants to replace those who leave for non-farm jobs or return to Mexico. If California has a million unique farm workers, this means 100,000 newcomers are required to replace those who exit; for the 2.5 million unique hired farm workers across the United States, 250,000 newcomers a year are required. Mexico-U.S. migration has slowed, providing fewer new entrants to replace farm workers who exit. About 10 percent of the people born in Mexico have moved to the United States, some 12 million, and 30 percent of the 40 million foreign-born U.S. residents were born in Mexico, making Mexico the largest source of U.S. immigrants. Mexican born U.S. residents have spread throughout the United States, but almost 60 percent live in California and Texas. Between 2005 and 2010, the Pew Hispanic Center estimated zero net Mexico-U.S. migration; that is, almost 1.4 million Mexicans moved to the United States over this five-year period and 1.4 million Mexicans moved to Mexico . Many of those who returned to Mexico were deported, and some took their U.S.-born children with them. There are still Mexicans moving to the United States, but returns to Mexico outnumbered new Mexican entrants to the United States by four to one in recent years. Reasons for the slowdown in Mexico-US migration include high U.S. unemployment, border violence and more fences and agents that raise smuggling costs and risks, and improving conditions in Mexico. California agriculture is feeling the effects of slowing Mexico-U.S. migration because of its revolving-door labor market, which relies on newcomers from abroad to replace workers who exit.
If Mexico-U.S. migration does not increase with the expected U.S. economic recovery, where will California farmers get replacement farm workers? The answer depends on immigration policy: will currently unauthorized farm workers be legalized and required to continue to work in agriculture or will replacement workers be guest workers from abroad? The current H-2A program certified 7,200 U.S. farmers to fill over 90,000 farm jobs with guest workers in FY11, including 250 California farmers to fill 3,000 farm jobs. The H-2A program requires farm employers to try to recruit U.S. workers under federal and state supervision, offer guest workers free housing, and pay them a super minimum wage called the Adverse Effect Wage Rate of $10.24 an hour in California in 2012. California farm employers assert that the H-2A program is too cumbersome and bureaucratic because of the state’s diverse and perishable crops. They urge three major employer-friendly changes. First, employers would like attestation to replace certification, meaning that employers would attest or assert that they tried and failed to recruit U.S. workers while offering appropriate wages, and their attestations would allow them to recruit and employ guest workers. Second, farm employers would like to offer housing vouchers worth $200 to $300 a month instead of free housing, adding $1 to $2 an hour to current wages. Third, to help offset the cost of housing vouchers, the AEWR would be rolled back by $1 or more an hour and studied to determine how well it achieves its goal of protecting U.S. workers from any wage-depressing effects of guest workers. The Clinton Administration blocked efforts to enact these employer-friendly changes to the H-2A program during the 1990s. However, in December 2000, farm employer and worker advocates negotiated the Agricultural Job Opportunity Benefits and Security Act , which would legalize currently unauthorized farm workers and make these three employer-friendly changes to the H-2A program. They hoped that Congress would enact AgJOBS in the waning days of the Clinton Administration, but AgJOBS was blocked by those opposed to “amnesty.” Most farm employers and worker advocates continue to urge enactment of the 12-year old AgJOBS bill.
Senator Dianne Feinstein introduced a version in 2009 that would grant Blue Card temporary legal status to up to 1.35 million unauthorized foreigners who did at least 150 days or 863 hours of farm work in the 24-month period ending December 31, 2008. If Blue Card holders continued to do farm work over the next three to five years, they and their families could become legal immigrants. AgJOBS’s employer-friendly changes to the H-2A program include the Big 3 desired by farm employers: attestation, housing vouchers, and a reduced AEWR. Farm employers and workers today are in a period of uncertainty. There is unlikely to be any immigration reform that includes earned legalization or amnesty in 2012, and legalization may face continued obstacles in a Republican controlled House in the next Congress. However, employer-friendly changes to the H-2A program or a new guest worker program could accompany a federal mandate that all employers use E-Verify to check the legal status of newly hired workers. Representatives who favor mandatory E-Verify have proposed new guest worker programs administered by USDA rather than the Department of Labor that include attestation, reduced or no housing requirements,indoor vertical farming and lower minimum wages without legalizing currently unauthorized workers. Just months after tainted cantaloupes caused the deadliest U.S. outbreak of food borne illness in a century, 270 consumers were sickened and three killed this summer by cantaloupes carrying Salmonella. The FDA has linked the contaminated cantaloupe to unsanitary conditions at Chamberlain Farms of Owensville, Indiana. Like the Holly, Colorado farm implicated in the deadly Listeria outbreak in cantaloupes last fall, Chamberlain is a relatively small grower in a region with no obvious comparative advantage in cantaloupe production. Moreover, climatic conditions predispose the area to bacterial contamination. Recent outbreaks of food borne illness and an increase in infections from most pathogens monitored by the CDC in 2011 have occurred alongside growth in consumer demand for locally sourced produce that has led even multinational discount retailers like Walmart to seek out local suppliers. Growing reliance on local production sacrifices the benefits of specialization according to comparative advantage and scale economies that more concentrated production affords.
In addition, dependency on smaller, local producers may come at the expense of food safety.Voluntary and regulation-induced investments in food safety, including process control, inspection, and traceability, often include fixed-cost components and “lumpiness” that gives an advantage to larger firms, which can spread the costs over larger quantities of production. High fixed costs of food safety can cause small firms to exit. Food safety processes and technologies appear to impose higher costs per unit of output on small operations. This fear was articulated during the 1998 implementation of pathogen reduction and Hazard Analysis and Control Point systems in the red meat- and poultry-slaughter industries. More recently, small farms successfully lobbied for exceptions to similar rules for produce growers under the Food Security Modernization Act, citing concern that the higher cost of regulatory compliance to small operations would force local and direct to-consumer operations to exit. Though there are few empirical analyses of the cost of food safety investments among produce growers, studies of the 1998 regulatory changes in the meat packing industry have documented a considerable disadvantage to small firms. An ex ante analysis of the planned regulations, for instance, estimated the costs to small beef slaughter plants as a share of the value of shipments would be 100 times greater than the cost to large firms. Many of the costs associated with the regulations, including monitoring, record keeping, and sanitation equipment are fixed, at least over a range of outputs, so that the cost per unit of production decreases in the scale of production. Moreover, the Economic Research Service of the USDA estimated that smaller plants had variable and fixed costs of regulatory compliance that were three and six times higher, respectively, than those of larger firms. Output inspection costs, for instance, may vary proportionally to output over a range of outputs, so that inspection technology exhibits constant returns to scale and does not disadvantage small firms. Plant inspection costs, however, are largely fixed, so that average plant inspection costs decline with output, favoring larger operations. Large firms, for instance, may find it optimal to operate their own testing laboratories and, thus, exploit increasing returns to scale. Small firms, however, are likely to contract testing out to third parties and, consequently, bear a relatively high cost per unit output. An ERS survey of the meat- and poultry-processing sectors concluded that testing costs, in particular, were higher for smaller firms. Likewise, the cost of regulatory enforcement exhibits increasing returns to scale because of the fixed costs associated with inspection of a firm’s facilities and procedures. These include travel costs and testing that increase in the number of facilities but not in the level of output. Thus, given a fixed enforcement budget, a decline in industry concentration resulting from demands for local production is likely to lower the level of safety.Food producers face food safety costs imposed by regulation, but may also make voluntary investments in pathogen control in order to meet contractual demands of buyers, reduce the risk of crop losses, avoid liability judgments, and protect brand value. Optimal private investment in exante food safety mechanisms equates the marginal expected reduction in damage and liability costs to the marginal cost of private risk reduction. This condition is likely to induce disproportionately greater investments from large operations than from small ones. The USDA estimated that as much as two-thirds of the reduction in Salmonella contamination in meat and poultry facilities is attributable to private voluntary investments rather than regulation-induced effort. When outbreaks of food borne illness occur, those firms responsible for contamination are typically obligated to recall all or some of the affected product.