The Hagstrom Report

Agriculture News As It Happens

Battle ahead over specialty crops on subsidized land

The battle over whether fruits and vegetables should be planted on acres eligible for crop farm subsidies will be revived in the 2012 farm bill debate, according to testimony delivered today at a Senate Agriculture Committee hearing on specialty crops and organics in the new farm bill.

Since 1996, farm bills traditionally treated fruits and vegetables as specialty crops separately from program crops such as wheat and cotton, which have subsidies tied to their acres. Growers of fresh fruit and vegetables have pushed for that prohibition, arguing that because specialty crop growers have never gotten subsidies it would be unfair if farmers who get them would compete with them.

But after soybeans were made a program crop in 2002, fruit and vegetable processors in the Midwest argued that acreage was shifted away from fruits and vegetables grown for canning and freezing, and made it difficult to maintain their industry. The 2008 farm bill contained a Planting Transferability Pilot Program that allows the growing of fruits and vegetables on program crop acres if the acreage is under contract for processing and the farmers give up their program crop subsidies on those acres.

At today’s hearing, Glenn Abbott, a farmer from LaCrosse, Ind., who represented the American Fruit and Vegetable Processors and Growers Coalition, called the pilot a success even though farmers have not shifted nearly as many acres as was authorized.

Abbott attributed low usage of the provision to a limited demand for fruits and vegetables for processing and a “hassle factor” in the sign-up procedure. Abbott said he and other Midwestern farmers cannot get convince landlords to allow them to plant tomatoes on their ground because they fear losing base acreage and their right to subsidies.

The result, Abbott said, is that about 5 percent of Midwestern producers stop growing vegetables each year and that it is harder and harder for processors to stay in business.

Abbott endorsed a bill introduced today by Sen. Richard Lugar, R-Ind., that would amend the farm bill to allow an acre-for-acre opt-out from the farm programs for production of fruits or vegetables under contract for processing, and declare a policy that vegetable production for processing on program base acres would not cause future loss of base acreage.

Since Lugar’s Farming Flexibility Act would allow only additional production of fruits and vegetables that are under contract for processing, “there is no potential for impact on the fresh produce markets,” Abbott said.

Lugar said in a news release today that the bill would save $8 million over 10 years in foregone subsidies.

But Charles Wingard, a vegetable grower from Pelion, S.C., who represented the United Fresh Produce Association, said the pilot project should be discontinued.

“The specialty crop industry strongly supports maintaining or strengthening the current restrictions that prevent the planting of fruits and vegetables on acres receiving program payments and discontinuing the Planting Transferability Pilot Program,” Wingard testified. “The goal of any responsible farm policy should be to enhance the tools necessary to drive demand, utilization of specialty crops and not distort the production and marketing of these commodities in the United States. Unfortunately the PTPP program has fallen well short of that goal.”

A Michigan dry bean farmer also testified that if Congress decides to allow the growing of dry beans on program crop land, growers should be compensated through another program.

“The restrictive planting clause has benefited growers by discouraging non-traditional growers form jumping into dry bean production during peak times for dry beans; we also understand the world climate has changed,” said Dennis Engelhard, a Unionville, Mich., farmer who is past chairman of the Michigan Bean Commission and president of the U.S. Dry Bean Council.

If the clause is modified, Engelhard said, the specialty crop block grants that go to states to promote consumption should remain in place and health-related research that would encourage increased consumption of dry beans should be considered. “We believe that dry beans and their healthy status could be a key to the obesity and other health issues,” he said.

Specialty crop growers also called for continued technical assistance to specialty crops and the market access promotion program to help them export, noting that plant health laws are trade barriers in other countries.

While the United States in general exports more agricultural products than it imports, showing a healthy surplus of $30 billion in trade statistics, specialty crop imports have grown.

“In contrast to the positive growth of the trade surplus for U.S. agriculture — 148 percent since 1999 — the trade deficit for specialty crops has increased 162 percent during the same time and reached a record $10.2 billion in 2010,” Wingard said.