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EXHIBIT 18

STATEMENT OF H. A. THOMAS, JR., MANAGER OF THE AGRICULTURAL PRODUCERS LABOR COMMITTEE, LOS ANGELES, CALIF.

I. REPRESENTATION

Agricultural Producers Labor Committee represents the producers of 98 percent of the oranges, grapefruit, and lemons grown in the States of California and Arizona; it is also associated with Avocado Growers Association, a grower cooperative association, made up of 95 percent of the producers of avocados in California, and the Western Growers Association, made up of the grower-shippers of a large percentage of the carlot shipments of vegetables from California and Arizona.

My statement will pertain primarily to the relation of the citrus growers to the exemption in the Fair Labor Standards Act.

There are approximately 28,000 citrus growers in California and Arizona and these growers cultivate, on an average, 12 acres of citrus fruit. They are directly interested in and vitally affected by the exemption in the Fair Labor Standards Act and the regulation of the Administrator defining "area of production" in that the packing houses are in most instances operated by associations of growers, and in all instances the costs of handling, washing, grading, and packing are paid by the growers.

There are in California and Arizona 275 citrus packing houses. Of these, 235 citrus packing houses, packing approximately 85 percent of the oranges and grapefruit and 94 percent of the lemons grown in California and Arizona, are nonprofit cooperative associations organized and controlled by the citrus growers. Such cooperative citrus packing houses act as the agent of the members in picking, washing, grading, and packing their citrus fruit, and as trustee of the growers in receiving and distributing the funds received from the sale of the fruit. They handle only the fruit of their members. As such cooperative packing houses act as agents for and pack the fruit for the account of the members, all packing costs are borne directly by the grower-members. Forty citrus packing houses, packing approximately 15 percent of the oranges and grapefruit and 6 percent of the lemons grown in California and Arizona, are independently owned. Such packing houses either pack exclusively the fruit which they grow, or pack fruit for growers under contract whereby the fruit is packed for the account of the grower. In the latter case the fruit is packed and sold and the packing charges plus a reasonable fixed charge are deducted from the sales price and the balance is passed on to the grower. In such a case the grower directly bears the increased cost of packing the fruit. In some instances a buyer may acquire fruit directly from the grower for cash, but in such instances the buyer deducts the packing and handling costs from the purchase price, so that any increase in packing charges is directly paid by the grower.

There are approximately 330,000 acres of land in California used in the production of oranges, grapefruit, and lemons. The annual total value of the citrus crop produced amounts to approximately $300,000,000, and there are employed in the citrus packing houses in normal times approximately 20,000 workers, consisting largely of the growers, their children, other members of their families, and their neighbors. Labor relations in these packing houses is one of being a good neighbor, rather than one of strict industrial conflict such as is sometimes found in industrial centers.

II. THE 3 (F) AGRICULTURAL EXEMPTION

Under section 3 (f) the activities of the growers in the growing, production, and harvesting of citrus fruit are exempt from the minimum wage and maximum hours provision of the act.

There are different seasons for each variety of citrus fruit. The navel season in central California begins in November and lasts through January; the navel season in southern California begins in December and lasts through May. The Valencia season in central California begins in April and lasts through June; the Valencia season in southern California begins in May and lasts through October; and navel season in Arizona and the desert is during the early winter months; lemons are harvested at different times during the year, but the peak of the harvest takes place during the winter season in most of the districts.

III. THE 7 (B) (3) EXEMPTION

Some of the houses have only one variety and operate only a few months other houses have more than one variety and operate for longer periods; most f the houses have both varieties of oranges and some of them have lemons and grapefruit; in all cases a survey supplied to the Administrator shows that 50 per cent or more of the volume handled by the individual house was received a handled during a 14-workweek period, so that their operations were seasonal, a: the Administrator found the citrus industry in California to be a seasonal industry in accordance with 7 (b) (3). These establishments are entitled to that exemption. IV. THE 7 (C) EXEMPTION

Citrus fruits are a perishable and seasonal fresh fruit, and such establishme: s are entitled to the 7 (c) exemption for the packing of such fruit. They do canning or processing. Under this section they are entitled to an additiona 14-workweek exemption from the maximum hours division of the act.

These establishments need the 7 (b) (3) and 7 (c) exemptions, as the." operations are seasonal, affected by weather conditions, pests, maturity rates and other factors beyond the control of the farmers. Consequently they a unable to regulate their hours of work so as to prevent abnormal costs aris". from overtime where they are forced to operate the establishments more th. 40 hours per week. They have endeavored at all times to maintain a leve. f operation satisfactory to the employee, and to avoid long or unusual hours however, the conditions over which they have no control make such operation necessary at various times during their operating period, and they would be unduly penalized if it was necessary for them to pay overtime during such perc Their operations cannot be standardized, as can be those of an industr establishment.

These establishments pay the highest wage for agricultural labor of any oper ators in the United States; consequently they would be the most heavily penalin if they were required to pay overtime during their seasonal operation.

V. THE 13 (A) (10) EXEMPTION

Citrus is produced in commercial quantities in 13 counties in California aré counties in Arizona, and these counties have always been recognized by t Federal Department of Agriculture and the various State departments in the areas of production. These counties are: Butte, Glenn, Fresno, Kərn, Tul→ Imperial, Los Angeles, Orange, Riverside, San Bernardino, San Diego, Sant Barbara, and Ventura, in California; and Maricopa, Yavapai, and Yuma Counties in Arizona.

These areas may be defined geographically in California by the central Cab fornia area (parts of Fresno, Kern, and Tulare Counties), Sacramento Var (northern California-parts of Butte and Glenn Counties), desert area perial County and eastern portion Riverside County), Ventura-Santa Barba area (Ventura and Santa Barbara Counties), Whittier-Orange County are (part of Los Angeles and Orange Counties), foothill area (Los Angeles : part of San Bernardino Counties), San Fernando Valley (Los Angeles County Redlands and Highlands (San Bernardino County), Riverside area (Rivers County), Corona district (Riverside County), San Diego area (San D County), and in Arizona by the Yuma-Mesa (Yuma County), and Salt River Valley (Maricopa and Yavapai Counties).

Over 60 percent of the California-Arizona citrus and vegetable packing hous are located in towns of a population more than 2,500. They happen to be # located for a variety of reasons, none of which gives them any competitive = vantage over the other citrus or vegetable packing houses, or causes them operate in any other or different manner, or puts them outside the zon agricultural economic influences.

For example, there are located in the San Fernando Valley, în Caliform " seven cooperative citrus packing houses. Five of these are located within corporate limits of the city of Los Angeles. These five citrus packing tare are located within the corporate limits of the city of Los Angeles, not to whe any economic advantage or so they can operate in a manner different from other citrus packing houses, but because all of the groves of their members located within the corporate limits of the city of Los Angeles and the pack!

houses are located there to be close to the groves of their members. For the most part, these citrus groves were planted and the citrus packing houses were constructed before the San Fernando Valley became a part of the city of Los Angeles. The fact that the city of Los Angeles has extended its corporate imits to include these groves and their adjacent packing houses does not cause them to operate in any different manner than when they were in unincorporated territory. They pay the same wage rates as do the packing establishments in Ventura and San Bernardino Counties, even though the industrial establishments in the San Fernando Valley pay much higher rates. Two of these packing houses in the San Fernando Valley are located within the town of San Fernando, but the groves of their members are located within the corporate limits of the city of Los Angeles. Not only is there a great number of citrus packing houses located within town of more than 2,500, but a great deal of citrus acreage is also located within towns of more than 2,500.

All of the citrus packing houses in California and Arizona haul the bulk of the citrus fruit which they pack less than 15 miles, but about 60 percent of such citrus packing houses haul some portion of the citrus fruit which they pack more than 20 miles.

Surveys indicate that the haulage of citrus fruit in California and Arizona from the groves to the packing houses is as follows:

Percent

34

Percentage of citrus packing houses hauling all fruit less than 10 miles---Percentage of citrus packing houses hauling all fruit less than 25 miles_‒‒‒ 76 Percentage of citrus packing houses hauling all fruit less than 50 miles---90 (10 percent of the houses haul a small portion of their fruit more than 50 miles.) VI. THE RELATION BETWEEN FARM HARVEST, OPERATION OF PACKING ESTABI ISHMENT, AND SOURCE OF LABOR SUPPLY, DUE TO THE SEASONAL AND PERISHABLE NATURE OF THE CROPS

In the production and handling of citrus fruits the following economic factors must be considered and each of them given its proper effect.

The seasonal and perishable nature of the crops requires that they be harvested when they mature; they must then immediately be washed, graded, and packed when brought in from the farm, and the labor must be available for this seasonal handling. This labor is largely temporary seasonal work and obviously does not come from industry or manufacturing where the work is year around and gives no opportunity for lay-off for seasonal work. If this work is not done as the crops mature and if labor is not available, then the crops are lost.

The perishable nature of the commodities determines the length of the haul. Where products are handled in their raw or natural state they must be washed, graded, and packed when they are at proper maturity and while they are still fresh. This means that they cannot be hauled any great distance and this fact regulates the amount of this haul.

The nature of the labor force, as shown by their job classifications, indicates that they are not in competition with industrial or manufacturing job classifications.

Following is a table showing the nature of the job classifications, nature of the labor force, and the percentage of labor in each classification:

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It is clear that these classifications are not in conflict with the usual classifications in industry and manufacture. The women doing the packing, grading, sorting, trimming, and washing are largely connected with the farm families,

their relatives, and neighbors. They work in these neighborhood packing sheds for the season, and then go back to their housekeeping and other duites.

There is a minor amount of transient labor used in these packing houses, particularly men, in certain limited areas. In the Desert Valley area there is a shift of workers from the Salt River Valley, Arizona, to the Desert Valley in California. In the vegetable areas of northern California there is some shift from one area to another. But in all other districts and particularly in citrus. the great bulk of the labor force is made up of local men and women closely connected with agricultural interests.

The workers that shift from the Salt River Valley in Arizona to the Desert Valey in California, and those that shift among the various districts in northern California, are all agricultural workers. There is no shift from industry or manufacture into agriculture, but the packers from one district follow the climatic cycles and crops from one area to another in that limited way.

These packing sheds are located largely in areas surrounding agricultural comraunities, or in the communities themselves where it was necessary to go in order To get the proper transportation, icing, and other requirements for washing and handling. The labor comes from these agricultural communities and the surrounding farming area. This labor force is made up of agricultural workers only. Changes in labor forces in industry or manufacturing in towns where these activities dominate do not directly affect the labor supply in these packing sheds.

The labor supply is made up of the farmers, the members of their families, their neighbors, relatives, and others who have a direct interest in agriculture. Except for wars or other emergencies, this force remains relatively constant.

All these packing establishments operate on about the same basis; they pay the same level of wages in the same district, and the differential in wages as between districts has an economic historical background. The size of the plant is no factor, and a great majority of them are cooperative associations.

In these cooperative establishments the association is the agent of the farmer for washing, grading, and packing the fruit or vegetables, and the trustee for the farmer in obtaining and disbursing the funds received from the sale of the fruit. In many cases, particularly the vegetables, the growers are also the shippers. In the commercial operations the great portion of the commodities are handled on a consignment basis, so that the grower is required to pay the actus! cost of handling and packing. In the few cases where the commodities are purchased from the farmer the purchaser takes into consideration the established cost of packing and deducts that from the offered price.

In whatever form the fruits and vegetables are handled the farmer pays the cost of handling. These products cannot be marketed until they are put into commercial grades and packages. This places on the farmer the burden of preparing them for market in their raw or natural state.

Increased costs for this labor cannot in most cases be absorbed in increased prices because fruits and vegetables are a perishable crop and any surplus in any market produces conditions which force down the market price. In all cases of surplus production or in oversupplied markets, the price is not affected by increased cost. In fact there is generally no relation between the market price. determined by supply and demand, and the increase of handling cost. The only together does not show that there is direct relation, but rather that the inflationary cycle, such as now exists. The fact in those cases that the two move together does not show that there is a direct relation, but rather that the inflationary ccondition is general. Ordinarily, the market price is determined by supply and demand, independent of the rise or fall of costs.

The California Farm Labor Board, an agent of the War Food Administration. has conducted an independent survey of the relation between on-farm wage rates and the packing-house rates. This investigation indicates that the rates are all related to the common labor on-farm rates. This board set a ceiling on the common on-farm labor of 75 cents and the War Food Administrator has permitted the common-labor rate in the packing shed to increase in proportion that the farm labor rate has increased above the 1941 level.

These findings and the directive of May 11, 1943, by the Economic Stabilization Director indicate the relationship between the on-farm labor rates and the packing-shed rates. It is our view that the on-farm labor rates predominate and influence the packing-shed rates more than the reverse. But whichever way the influence carries, it is clear that the relationship is limited to that between the on-farm and the packing-shed labor, and that there is a very indirect, if any. relationship between these two rate levels, and the industrial or manufacturing rate in the community.

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