This paper examines relationships among immigration, farm employment, poverty, and welfare usage in 65 towns and cities with populations ranging from 1,000 to 20,000 I 1990 in the major. agricultural areas of California. It tests the hypothesis that expanding labor-intensive agriculture creates a negative externality by drawing large numbers of workers from abroad, offering many of them poverty-level earnings, and increasing public assistance use in rural towns. Econometric findings reveal a circular relationship between farm employment and immigration. An additional 100 farm jobs are associated with 143 more immigrants, 132 more poor residents, and 69 more people receiving welfare benefits in rural towns. An additional 100 immigrants, in turn, are associated with 36 more farm jobs. Each additional California farm job was associated with $987 in welfare payments in 1990. Since the average California farm worker in 1990 earned $7320, the "welfare subsidy" associated with using immigrants to fill farm jobs was equivalent to 13 percent of farm worker earnings. In theory, a Pigouvian tax on farm employers could be used to internalize this public assistance externality.