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**SPECIALTY CROPS**

***Background***

President Bush signed the Specialty Crop Competitiveness Act of 2004
(Act) on December 21, 2004. The Act seeks to promote increased
consumption of specialty crops and increase the competitiveness of
specialty crop producers. Specialty crops are defined as fruits and
vegetables, tree nuts, dried fruits, and nursery crops (including
floriculture). The Act authorizes \$54 million annually for the next 5
fiscal years to help meet these goals.

The Act authorizes: (1) specialty crop block grants to States through
2009; (2) technical assistance for specialty crops through 2009; (3)
efforts to reduce the backlog of agricultural export petitions; (4)
publication of a report on sanitary and phytosanitary export issues; (5)
research on methyl bromide alternatives; (6) a national specialty crop
research program; (7) a specialty crop committee; (8) a pest and disease
response fund; (9) a peer review of import and export regulations; and
(10) maintenance of a USDA training facility for USDA fresh fruit and
vegetable inspectors.

The 2006 Agricultural Appropriations Act provided funding for one of the
Act's initiatives by authorizing USDA to provide State agencies with \$7
million in specialty crop block grants to be used solely to enhance the
competitiveness of specialty crops. USDA is drafting regulations that
will implement the grant program in early 2006.

In addition to the Act, the 2002 farm bill authorized a Fruit and
Vegetable Snack Program which provides free fresh produce to schools to
encourage children to snack on fruits and vegetables. The program began
as a pilot program covering over 100 schools in 4 States and 7 schools
on Indian reservations. The program was funded by a one-time allocation
of \$6 million from funds available under Section 32 of the Act of
August 24, 1935 (Section 32). In 2004, the program was expanded, through
the Child Nutrition and WIC Reauthorization Act, to include additional
schools in four additional States and on two additional reservations.
This law also provided mandatory funding of \$9 million annually through
fiscal year (FY) 2008. In November 2005, the 2006 Agriculture
Appropriations Act added Utah, Wisconsin, New Mexico, Texas,
Connecticut, and Idaho to the existing program. These States are funded
at \$6 million for\
FY 2006.

The 2002 farm bill also required the Secretary of Agriculture to use not
less than \$200 million of Section 32 funds to purchase fruit,
vegetables, and specialty crops starting in FY 2002 and each subsequent
year. Of this \$200 million, not less than \$50 million is allocated to
the Secretary of Defense to purchase fruit, vegetables, and specialty
crops.

Specialty crops production represents approximately 50 percent of the
total value of U.S. crop production. For 2005, the retail value of U.S.
specialty crops is estimated to have been around \$60 billion.

***General Opinions Expressed***

-   Many commenters stated that USDA should encourage additional
    specialty crop production, as fruit and vegetable consumption is
    vital to the health of all Americans and is a major component of
    USDA's newly released food pyramid.

-   Several comments noted that it is difficult for specialty crop
    growers to compete against heavily subsidized and minimally
    regulated foreign producers. U.S. specialty crop growers face tariff
    and nontariff trade barriers in international markets.

-   Many comments suggested that the next farm bill should expand upon
    the Specialty Crops Competitiveness Act of 2004, including
    continuing and increasing the block grants to States.

-   Several comments, referencing the 2002 farm bill's fruit and
    vegetable planting restrictions, stated that farmers should have the
    flexibility to plant fruits and vegetables without being penalized
    if they do not have a history of growing such commodities or if
    their acres are enrolled in Federal farm programs that provide
    direct payments.

-   A few comments supported the current restriction on the growing of
    fruits and vegetables on subsidized acreage enrolled in USDA farm
    programs, while also encouraging the effective enforcement of this
    restriction.

-   Some comments encouraged more funding for specialty crops research
    and market development.

-   Many comments suggested expanding the USDA Fruit and Vegetable Snack
    Program to all 50 States.

-   A few comments stated that Federal farm policy has basically ignored
    specialty crop producers.

-   Many comments supported the expansion of the Department of Defense
    Fresh Fruit and Vegetable Program.

-   Several comments stated that Hawaiian foliage crops should be
    included in the Specialty Crops Competitiveness Act.

-   A few commented that it should be easier to purchase crop insurance
    for specialty crops.

***Detailed Suggestions Expressed***

-   The Specialty Crop Regulatory Initiative should be funded in order
    to help obtain regulatory approvals for biotechnology-derived
    specialty crops.

-   Low-interest loans and tax incentives should be provided to
    encourage specialty crop production.

-   USDA should promote specialty crops such as colored cotton and
    heirloom varieties.

-   USDA should move expeditiously in implementing the Specialty Crops
    Competitiveness Act of 2004.

-   The farm bill should address the following specialty crop issues:
    block grants, international trade, nutrition, marketing, invasive
    pests and diseases, research, competitive grants, and conservation
    programs.

-   USDA should help develop domestic markets for Asian specialty crops.

-   U.S. raisin producers face serious obstacles in competing with
    foreign raisin producers.

-   High-value specialty crops such as nursery crops should receive
    support.

-   Ethnic crops such as lemon grass and sinqua should have access to
    specialty crop grants.

-   Farmers should be allowed to opt out of the Federal farm program,
    without penalty, on a yearly basis in order to raise fruits and
    vegetables.

-   Marketing orders should continue to be used to promote fruit and
    vegetable consumption.

-   Amending Federal law to allow marketing orders to implement food
    safety programs would help promote fruit and vegetable production
    and consumption by assuring consumers of the safety of the products.

-   \$1.5 million should be appropriated for the Agricultural Marketing
    Service (AMS) National Training and Development Center in
    Fredericksburg, Virginia, for the training of fresh produce
    inspectors.

-   For FY 2007, \$9 million should be allocated from the Commodity
    Credit Corporation to fund AMS market news information for U.S.
    fruit and vegetable growers.

-   A new fruit and vegetable marketing program to encourage consumption
    of these commodities should be created.

-   Support was expressed for the Farming Flexibility Act of 2005 which
    would allow the growing of fruits and vegetables on farm program
    acres.

-   The Fruit and Vegetable Snack Program should be expanded not only to
    every State, but to 100 schools in each State.

-   Funding should be increased for USDA's Technical Assistance for
    Specialty Crops program.

-   The farm bill should include the California Institute for the Study
    of Specialty Crops at Cal Poly's recommendations for maintaining and
    improving the competitiveness of specialty crops.