To amend the Specialty Crops Competitiveness Act of 2004 to increase the authorization of appropriations for grants to support the competitiveness of specialty crops, to amend the Agricultural Risk Protection Act of 2000 to improve the program of value-added agricultural product market development grants by routing funds through State departments of agriculture, to amend the Federal Crop Insurance Act to require a nationwide expansion of the adjusted gross revenue insurance program, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Specialty Crop and Value-Added 
Agriculture Promotion Act''.

SEC. 2. DEFINITION OF SPECIALTY CROP.

    Section 3(1) of the Specialty Crops Competitiveness Act of 2004 
(Public 108-465; 7 U.S.C. 1621 note) is amended--
            (1) by inserting ``fish and shellfish whether farm-raised 
        or harvested in the wild,'' after ``dried fruits,''; and
            (2) by adding at the end the following new sentence: ``The 
        term includes specialty crops that are organically produced (as 
        defined in section 2103 of the Organic Foods Production Act of 
        1990 (7 U.S.C. 6502).''.

SEC. 3. PERMANENT AUTHORIZATION OF APPROPRIATIONS FOR STATE SPECIALTY 
              CROP BLOCK GRANTS.

    Subsection (i) of section 101 of the Specialty Crops 
Competitiveness Act of 2004 (Public 108-465; 7 U.S.C. 1621 note) is 
amended to read as follows:
    ``(i) Authorization of Appropriations.--For fiscal year 2006 and 
every fiscal year thereafter, there is authorized to be appropriated to 
the Secretary of Agriculture $500,000,000 to make grants under this 
section.''.

SEC. 4. BLOCK GRANTS TO STATES FOR VALUE-ADDED AGRICULTURAL PRODUCT 
              MARKET DEVELOPMENT.

    (a) In General.--Subsection (b) of section 231 of the Agricultural 
Risk Protection Act of 2000 (Public Law 106-224; 7 U.S.C. 1621 note) is 
amended to read as follows:
    ``(b) Grant Program.--
            ``(1) Block grants to states.--
                    ``(A) Amount of grant to state.--From the amount 
                made available under paragraph (6) for a fiscal year, 
                the Secretary shall provide to each State, subject to 
                subparagraph (B), a grant in an amount equal to the 
                product obtained by multiplying the amount made 
                available for that fiscal year by the result obtained 
                by dividing--
                            ``(i) the total value of the agricultural 
                        commodities and products made in the State 
                        during the preceding fiscal year; by
                            ``(ii) the total value of the agricultural 
                        commodities and products made in all of the 
                        States during the preceding fiscal year.
                    ``(B) Limitation.--The total grant provided to a 
                State for a fiscal year under subparagraph (A) shall 
                not exceed $3,000,000.
            ``(2) Use of grant funds by states.--A State shall use the 
        grant funds to award competitive grants--
                    ``(A) to an eligible independent producer (as 
                determined by the State) of a value-added agricultural 
                product to assist the producer--
                            ``(i) in developing a business plan for 
                        viable marketing opportunities for the value-
                        added agricultural product; or
                            ``(ii) in developing strategies that are 
                        intended to create marketing opportunities for 
                        the producer; and
                    ``(B) to an eligible agricultural producer group, 
                farmer or rancher cooperative, or majority-controlled 
                producer-based business venture (as determined by the 
                State) to assist the entity--
                            ``(i) in developing a business plan for 
                        viable marketing opportunities in emerging 
                        markets for a value-added agricultural product; 
                        or
                            ``(ii) in developing strategies that are 
                        intended to create marketing opportunities in 
                        emerging markets for the value-added 
                        agricultural product.
            ``(3) Amount of competitive grant.--
                    ``(A) In general.--The total amount provided under 
                paragraph (2) to a grant recipient shall not exceed 
                $500,000.
                    ``(B) Majority-controlled producer-based business 
                ventures.--The amount of grants provided by a State to 
                majority-controlled producer-based business ventures 
                under paragraph (2)(B) for a fiscal year may not exceed 
                10 percent of the amount of funds that are used by the 
                State to make grants for the fiscal year under 
                paragraph (2).
            ``(4) Grantee strategies.--A recipient of a grant under 
        paragraph (2) shall use the grant funds--
                    ``(A) to develop a business plan or perform a 
                feasibility study to establish a viable marketing 
                opportunity for a value-added agricultural product; or
                    ``(B) to provide capital to establish alliances or 
                business ventures that allow the producer of the value-
                added agricultural product to better compete in 
                domestic or international markets.
            ``(5) Reports.--Within 90 days after the end of a fiscal 
        year for which funds are provided to a State under paragraph 
        (1), the State shall submit to the Committee on Agriculture of 
        the House of Representatives and the Committee on Agriculture, 
        Nutrition, and Forestry of the Senate a report describing how 
        the funds were used.
            ``(6) Funding.--On October 1 of each fiscal year, of the 
        funds of the Commodity Credit Corporation, the Secretary shall 
        make available to carry out this subsection $100,000,000, to 
        remain available until expended.
            ``(7) State defined.--In this subsection, the term `State' 
        means each of the 50 States, the District of Columbia, the 
        Commonwealth of Puerto Rico, the United States Virgin Islands, 
        Guam, American Samoa, and the Commonwealth of the Northern 
        Mariana Islands.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on October 1, 2005.

SEC. 5. REIMBURSEMENT OF CERTIFICATION COSTS.

    (a) Incentive Program.--The Secretary of Agriculture shall 
establish an incentive program to encourage the independent third-party 
certification of agricultural producers and processors for product 
qualities, production practices, or other product or process attributes 
that increase marketability or value of an agricultural commodity. The 
Secretary shall include independent third-party certification systems, 
including programs such as Good Agricultural Practices, Good Handling 
Practices, and Good Manufacturing Practices programs, that the 
Secretary finds will provide one or more measurable social, 
environmental, or marketing advantages.
    (b) Standards.--The Secretary shall set standards regarding the 
types of certifications, and the types of certification-related 
expenses, that will qualify for reimbursement under the program.
    (c) Limitation on Amount of Reimbursement.--An agricultural 
producer or processor may not receive reimbursement for more than 50 
percent of the qualified expenses incurred by the producer or processor 
related to accepted certifications.

SEC. 6. NATIONWIDE EXPANSION OF RISK MANAGEMENT AGENCY ADJUSTED GROSS 
              REVENUE INSURANCE PROGRAM.

    (a) Expansion.--Section 523(e) of the Federal Crop Insurance Act (7 
U.S.C. 1523(e)) is amended by adding at the end the following new 
paragraph:
            ``(3) Permanent nationwide operation.--Effective beginning 
        with the 2006 reinsurance year, the Corporation shall carry out 
        the adjusted gross revenue insurance pilot program as a 
        permanent program under this title and may expand the program 
        to cover any county in which crops are produced. To facilitate 
        the expansion of the program nationwide, the Corporation may 
        grant temporary premium subsidies for the purchase of a policy 
        under the program to producers whose farm operations are 
        located in a county that has a high level of specialty crop 
        production and has not had a high-level of participation in the 
        purchase of crop insurance coverage.''.
    (b) Comptroller General Study.--The Comptroller General shall 
conduct a study of the Federal crop insurance program to determine how 
well the program serves specialty crop producers and to recommend such 
changes as the Comptroller General considers appropriate to improve the 
program for specialty crop producers.

SEC. 7. EXPANSION OF FRUIT AND VEGETABLE PROGRAM IN SCHOOL LUNCH 
              PROGRAMS.

    The Richard B. Russell National School Lunch Act is amended--
            (1) in section 18 (42 U.S.C. 1769), by striking subsection 
        (g); and
            (2) by inserting after section 18 the following new 
        section:

``SEC. 19. FRUIT AND VEGETABLE PROGRAM.

    ``(a) In General.--The Secretary shall make available in not more 
than 100 schools in each State, and in elementary and secondary schools 
on 1 Indian reservation, free fresh and dried fruits and vegetables and 
frozen berries to be served to school children throughout the school 
day in 1 or more areas designated by the school.
    ``(b) Priority in Allocation.--In selecting States to participate 
in the program, the Secretary shall give priority to States that 
produce large quantities of specialty crops.
    ``(c) Publicity.--A school participating in the program authorized 
by this section shall publicize within the school the availability of 
free fruits and vegetables under the program.
    ``(d) Authorization of Appropriations.--There is authorized to be 
appropriated for fiscal years 2006 and 2007, $20,000,000 to carry out 
this section.''.

SEC. 8. INCREASE IN LIMIT ON DIRECT OPERATING LOANS; INDEXATION TO 
              INFLATION.

    Section 313 of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1943) is amended--
            (1) in subsection (a)(1), by striking ``$200,000'' and 
        inserting ``$500,000 (increased, beginning with fiscal year 
        2007, by the inflation percentage applicable to the fiscal year 
        in which the loan is made)''; and
            (2) in subsection (b), by striking paragraph (2) and 
        inserting the following new paragraph:
            ``(2) the average of such index (as so defined) for the 12-
        month period ending on--
                    ``(A) in the case of a loan other than a loan 
                guaranteed by the Secretary, August 31, 2005; or
                    ``(B) in the case of a loan guaranteed by the 
                Secretary, August 31, 1996.''.

SEC. 9. TRADE OF SPECIALTY CROPS.

    (a) Assistant USTR for Specialty Crops.--Section 141(c) of the 
Trade Act of 1974 (19 U.S.C. 2171(c)) is amended by adding at the end 
the following new paragraph:
            ``(6)(A) There is established in the Office the position of 
        Assistant United States Trade Representative for Specialty 
        Crops. The Assistant United States Trade Representative for 
        Specialty Crops shall be appointed by the United States Trade 
        Representative.
            ``(B) The primary function of the Assistant United States 
        Trade Representative for Specialty Crops shall be to promote 
        the trade interests of specialty crop businesses, to remove 
        foreign trade barriers that impede specialty crop businesses, 
        and to enforce existing trade agreements beneficial to 
        specialty crop businesses.
            ``(C) The Assistant United States Trade Representative for 
        Specialty Crops shall be paid at the level of a member of the 
        Senior Executive Service with equivalent time and service.''.
    (b) Study of Uruguay Round Table Agreement Benefits.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct a study on the benefits of the agreements 
        approved by Congress under section 101(a)(1) of the Uruguay 
        Round Agreements Act (Public Law 103-465) to specialty crop 
        businesses.
            (2) Report.--Not later than one year after the date of the 
        enactment of this Act, the Comptroller General shall submit to 
        Congress a report describing the results of the study conducted 
        under paragraph (1).
    (c) Foreign Market Access Strategy.--Not later than one year after 
the date of the enactment of this Act, the Secretary of Agriculture 
shall develop and implement a foreign market access strategy to 
increase exports of specialty crops to foreign markets.

SEC. 10. INCREASED AUTHORIZATION FOR TECHNICAL ASSISTANCE FOR SPECIALTY 
              CROPS.

    Section 3205(d) of the Farm Security and Rural Investment Act of 
2002 (7 U.S.C. 5680(d)) is amended by striking ``$2,000,000'' and 
inserting ``$10,000,000''.

Summary: Specialty Crop and Value-Added Agriculture Promotion Act - Amends the Specialty Crops Competitiveness Act of 2004 to include within the definition of specialty crop: (1) farm-raised or wild-harvested fish and shellfish. And (2) organically produced specialty crops. Makes the authorization of appropriations for state specialty crop block grants permanent. Amends the Agricultural Risk Protection Act of 2000 to replace the agricultural marketing resource center pilot project with a state block grant program for value-added agricultural product market development. Directs the Secretary of Agriculture to establish an incentive program for third-party certification of agricultural producers and processors for quality and production practices that increase agricultural commodity marketability or value. Provides for up 50 reimbursement of participant certification costs. Amends the Federal Crop Insurance Act to direct the Commodity Credit Corporation to carry out the adjusted gross revenue insurance pilot program as a permanent program. Authorizes the Corporation to: (1) expand the program to cover any county in which crops are produced. And (2) grant temporary policy subsidies for producers located in a county that has a high level of specialty crop production and has not had a high level of crop insurance coverage coverage. Amends the Richard B. Russell National School Lunch Act to direct the Secretary to: (1) make available to students in not more than 100 schools in each state, and in elementary and secondary schools on one Indian reservation, free fresh and dried fruits and vegetables throughout the school day in one or more school-designated areas. And (2) give priority to states that produce large quantities of specialty crops. Amends the Consolidated Farm and Rural Development Act to increase operating loan limits for loans guaranteed other than by the Secretary. Revises the related inflation percentage determination. Amends the Trade Act of 1974 to establish the position of Assistant United States Trade Representative for Specialty Crops. Amends the Farm Security and Rural Investment Act of 2002 to increase the authorization of appropriations for specialty crop technical assistance.