Apr 23, 2007

Federal Programs Are Worth Billions to Specialty Crops

We’ve been hearing a lot about specialty crops lately, thanks in large part to the 2007 Farm Bill. In anticipation of the new bill, specialty crop representatives have been making their case to lawmakers in Washington, D.C., bemoaning the fact that U.S. farm policy does little to help the industry.

When compared to program crops like wheat, cotton, soybeans and corn, it’s easy to see why specialty crop producers might feel neglected. Five program crops receive 92 percent of U.S. farm subsidies, while specialty crops receive none. That’s a huge disparity, but it’s not the whole story. While examining a report released by the Congressional Research Service in January, I was surprised to learn the federal government does quite a bit for the specialty crop industry. Indirectly – through crop insurance, disaster assistance, marketing, research and other programs – federal contributions to specialty crops are in the billions of dollars. For FDA alone, Congress appropriated $508 million in 2004 for food safety, inspection, enforcement and import monitoring activities.

The report, called “Fruits, Vegetables and Other Specialty Crops: A Primer on Government Programs,” summarizes USDA, FDA and Department of Labor programs and details how some of them are funded.

According to the report, USDA’s Risk Management Agency administers the federal crop insurance program, which covers about 50 specialty crops. Eligible producers can receive catastrophic insurance, which is free except for an administrative fee. The Farm Service Agency administers a program that makes low-interest emergency loans to farmers in counties that have been declared disaster areas. Eligible growers can borrow up to 100 percent of their actual losses (not to exceed $500,000), which would include destroyed fruit trees, buildings and equipment

Since 2001, Congress has authorized three “market loss payment” programs, primarily for apple growers. The programs provided $269 million in income assistance to apple growers in 1999 and 2000. Additionally, specialty crop growers have received assistance through ad hoc crop-loss disaster programs. The programs have provided almost $20 billion to all crops, including specialty crops, since 1988.

USDA’s Agricultural Marketing Service (AMS) administers several programs that help the produce industry expand its markets. There are 34 active marketing orders and agreements covering specified fruit, vegetable and tree nut crops. The groups are financed by assessment fees, but also USDA appropriations, which totaled $14.8 million in 2003.

In 2004, $15 million was appropriated for USDA’s Value-added Producer Grant program. The grants can be used to develop marketing plans, among other things. Congress also has provided funds to defray costs for the National Organic Program.

AMS collects, analyzes and disseminates local, regional, national and international market information for numerous agricultural commodities, including fruits, vegetables and ornamentals. The annual appropriation for such work is about $30 million.

In August 2001, Congress passed a supplemental appropriation bill to ameliorate a period of low income in the farm sector. Out of $5.5 billion, Congress directed $159.4 million toward specialty crop producers, which was divided among states. The funds supported more than 1,400 specialty crop projects. In 2004, the Specialty Crops Competitiveness Act took the block grant program further, authorizing an annual appropriation of $44.5 million in 2005 through 2009, according to the report.

USDA purchases and donates a variety of commodities – including fruit, vegetables and tree nut products – to domestic nutrition and food assistance programs. In 2001, almost $7 billion from domestic programs supported the consumption of fruit and vegetables by low-income individuals and families.

The Market Access Program helps share the costs of marketing and promoting U.S. agricultural products overseas. MAP’s allocation in 2004 was $125 million, of which $47 million was awarded to trade organizations, cooperatives and groups promoting U.S. fruit and vegetables in foreign markets.

Congress appropriated $27 million annually in 2003 and 2004 for quarantine and inspection programs run by the Animal and Plant Health Inspection Service. APHIS protects U.S. agriculture from plant pests and diseases, which is especially important for specialty crops. Congress appropriated $55 million annually in 2003 and 2004 for fruit fly exclusion, detection and control; $11.6 million in 2003 for APHIS to negotiate phytosanitary disputes; and about $24 million in 2003 and 2004 for a pest detection program.

In 2003, $411.3 million was transferred to APHIS for emergency programs for plant and animal pest and disease management, on top of $318.2 million in funds appropriated for that purpose. Specialty crop pest eradication programs saw some of those funds in 2003, including citrus canker ($36 million), glassy-winged sharpshooter ($14.5 million), fruit flies ($18.8 million) and emerald ash borer ($12.7 million), according to the report.

USDA appropriations help support a nationwide network of public laboratories and academic institutions. In 2004, the Agricultural Research Service (ARS) spent $80 million on research related to fruit; $48.5 million on vegetables; $8.6 million on tree nuts; and $29.4 million on nursery crops and turfgrasses. ARS also spent $18 million on methyl bromide research in 2004, looking for alternatives to the pesticide.

The same year, $26 million in federal funds went to fruit research at state agricultural experiment stations; $33.6 million went to vegetable research; $1.5 million to tree nut research; and $11.3 million to nursery crop.

USDA’s National Agricultural Statistics Service, which gathers data from all over the country, received $129 million in 2004. The Economic Research Service, USDA’s economic analysis agency, received $71.4 million, according to the report.

As you can see, the federal government hasn’t exactly neglected specialty crops. With that knowledge in mind, growers should rest easier. Then again, with the prospect of getting a bigger piece of the federal pie, I can’t blame them if they lie awake at night, dreaming of another slice.