Feb 22, 2011

Planting project’s days numbered?

The Planting Transferability Pilot Project (PTPP) is entering its third year, but its long-term future remains cloudy.

PTPP, managed by USDA’s Farm Service Agency (FSA), allows growers in seven Midwest states to grow certain processing vegetables on their base acres – land normally reserved for federally subsidized program crops like wheat, soybeans and corn.

Outside the pilot project, growers who want to grow vegetables (or fruit) on their base acres face the penalty of losing all their federal subsidies – permanently. Growers participating in PTPP, however, only lose federal benefits on the acres planted with vegetables – and only for the years the vegetables are actually there, said David Schweikhardt, a professor in Michigan State University’s Department of Agricultural, Food and Resource Economics.

PTPP is the result of a compromise in the last Farm Bill – the fruits of a debate that, to a certain extent, pitted the processing side of the industry against the fresh side.

Federal restrictions on planting fruit and vegetables on base acres were enacted more than two decades ago, in order to protect growers who do not receive federal subsidies (that is, fruit and vegetable growers) from competing against those who do (program crop growers). Since 2002, a coalition of processors, suppliers and growers (now called the American Fruit and Vegetable Processors and Growers Coalition) has been fighting to remove those planting restrictions, seeking more land for processing fruit and vegetable crops.

During the negotiations that led to the 2008 Farm Bill, however, the coalition ran into opposition from the Specialty Crop Farm Bill Alliance, which represents dozens of fruit and vegetable organizations.
The processing coalition had originally pushed for a complete removal of the planting restrictions on fruits and vegetables, but the controversy led Congress to roll the more limited pilot project into the 2008 Farm Bill, said Steve Smith, director of agriculture for Red Gold, a tomato processing company based in Elwood, Ind., and member of the coalition.

PTPP has been an important program for Smith’s company. Last year, roughly half of Red Gold’s tomato growers (about 25 of them) supplied a quarter of the company’s processing tomatoes from 3,500 PTPP acres in Indiana, Ohio and Michigan, he said.

But members of the specialty crop alliance have questioned the overall level of participation in the project.

The Farm Bill laid aside 75,000 acres for the PTPP experiment, which started in 2009. The acreage was divided among Minnesota (34,000), Michigan, Indiana, Illinois, Wisconsin (9,000 each), Ohio (4,000) and Iowa (1,000), according to Smith.

But only about one-eighth of those acres have been utilized so far, said John Keeling, CEO of the National Potato Council and co-chair of the alliance.

Such a lack of interest argues against the claims that there’s a major need for planting flexibility, said Robert Guenther, senior vice president of public policy for United Fresh Produce Association, another member of the specialty crop alliance.

The alliance isn’t against greater planting flexibility for processing growers – it just doesn’t want it done at the expense of the fresh market, Guenther said.

Smith believes such concerns are unfounded. In his opinion, PTPP has proven that growing processing vegetables on farms with a history of subsidies will not disrupt fresh markets.

“Even though it sounds like we might be competing with fresh-market folks, we really aren’t.”

There’s not a lot of product movement between the fresh and processing markets. For one thing, the varieties grown are completely different, he said.

Vic Shank, president of Central Produce Sales in Dowagiac, Mich., agrees with Smith’s assessment. His company has participated in PTPP, and will probably do so again this year.

Processing growers need more land for crop rotation, but current rules don’t give them many options, Shank said.
Dave Smith, executive secretary of the Michigan Vegetable Council, had similar opinions. It would be better for processing growers if they could rent more acres, he said.

PTPP covers seven processing crops: cucumbers, green peas, lima beans, pumpkins, snap beans, sweet corn and tomatoes. In order to participate, growers must have a guaranteed buyer for their vegetables and must present the contract with that buyer to their local FSA office. They also must agree to produce the vegetables as part of a crop rotation program, according to FSA.

PTPP is scheduled to last through 2012. The next Farm Bill debate will decide what happens to the project after that.

The processing coalition that fought for PTPP has broadened into a national effort, with the goal of permanently removing planting restrictions across the country, Steve Smith said.

The specialty crop alliance, on the other hand, still believes that any situation where subsidized growers compete against non-subsidized growers is “fundamentally inequitable,” Keeling said.

To learn more about PTPP, visit your local FSA office or FSA’s website.

– Matt Milkovich