To support specialty crop producers and production in the United States, to improve the program of value-added agricultural product market development grants by routing the grant funds through State departments of agriculture, 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. ANNUAL GRANTS TO STATES TO SUPPORT SPECIALTY CROP PRODUCERS.

    (a) Availability and Purpose of Grants.--Subject to the 
appropriation of funds to carry out this section, the Secretary of 
Agriculture shall make a grant each fiscal year under this section to 
each State that submits an application requesting the grant for that 
fiscal year. The grant funds shall be used by the State department of 
agriculture solely to enhance the competitiveness of specialty crops 
produced in that State. The application for a fiscal year shall be 
submitted at such time and in such form as the Secretary prescribes.
    (b) Grants Based on Value of Production.--The amount of the grant 
for a fiscal year to a State under this section shall bear the same 
ratio to the total amount appropriated pursuant to the authorization of 
appropriations in subsection (e) for that fiscal year as the value of 
specialty crop production in the State during the preceding calendar 
year bears to the value of specialty crop production during that 
calendar year in all States submitting applications for a grant for 
that fiscal year.
    (c) Grant Funds as Supplement to State Expenditures.--Grant funds 
provided under this section shall supplement the expenditure of State 
funds in support of specialty crops and specialty crop producers, and 
shall not replace State funds.
    (d) Definitions.--In this section:
            (1) The term ``specialty crop'' means all agricultural 
        crops, except wheat, feed grains, oilseeds, cotton, rice, 
        peanuts, sugar, and tobacco.
            (2) 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.
            (3) The term ``State department of agriculture'' means the 
        agency, commission, or department of a State government 
        responsible for protecting and promoting agriculture within the 
        State.
    (e) Authorization of Appropriations.--There is authorized to be 
appropriated to the Secretary $500,000,000 for fiscal year 2005 and 
each fiscal year thereafter to make grants under this section.

SEC. 3. BLOCK GRANTS TO STATES FOR VALUE-ADDED AGRICULTURAL PRODUCT 
              MARKET DEVELOPMENT.

    (a) In General.--Section 231(b) of the Agricultural Risk Protection 
Act of 2000 (7 U.S.C. 1621 note) is amended to read as follows:
    ``(b) Grant Program.--
            ``(1) Block grants to states.--
                    ``(A) In general.--From amounts made available 
                under paragraph (6) for each fiscal year, the Secretary 
                shall provide to each State, subject to subparagraph 
                (B), a sum equal to--
                            ``(i) the amount so made available; 
                        multiplied by
                            ``(ii)(I) the total value of the 
                        agricultural commodities and products made in 
                        the State during the preceding fiscal year; 
                        divided 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 amount that may be 
                provided to a State for a fiscal year under 
                subparagraph (A) shall not exceed $3,000,000.
            ``(2) Grants by states.--A State to which funds are 
        provided under paragraph (1) shall use the money 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 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 grantee under paragraph (2) 
        shall use the grant--
                    ``(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, 2004.

SEC. 4. REIMBURSEMENT OF CERTIFICATION COSTS.

    The Secretary of Agriculture shall establish a quality 
standardization program for certification of farmers and processors 
under quality assurance systems. The program--
            (1) shall set standards for types of certifications that 
        qualify under the program;
            (2) may provide for certification under programs such as 
        Good Agricultural Practices, Good Handling Practices, and Good 
        Manufacturing Practices programs;
            (3) shall establish what certification-related expenses 
        shall qualify for reimbursement under the program; and
            (4) shall provide that farmers and processors shall be 
        reimbursed for 50 percent of qualified expenses related to 
        accepted certifications.

SEC. 5. 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 2005 reinsurance year, the Corporation shall carry out 
        the adjusted gross revenue insurance pilot program as a 
        permanent program under this Act 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. 6. EXPANSION OF FRUIT AND VEGETABLE PROGRAM IN SCHOOL LUNCH 
              PROGRAMS.

    The Richard B. Russell National School Lunch Act (42 U.S.C. 1751 et 
seq.) is amended--
            (1) in section 18, 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 to students 
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 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 2005 and 2006, $20,000,000 to carry out 
this section.''.

Summary: Specialty Crop and Value-Added Agriculture Promotion Act - Directs the Secretary of Agriculture to make annual State grants to enhance specialty crop competitiveness. Stipulates that such grants shall supplement and not replace State funds. Defines specialty crop as any crop other than wheat, feed grains, oilseeds, cotton, rice, peanuts, sugar, and tobacco. 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 to establish a quality standardization program for certification of farmers and processors under quality assurance systems, which shall include 50 percent 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.