United States 

Department 

of Agriculture 

www.ers.usda.gov 

 A Report from the Economic Research Service

Barry Krissoff, Mesbah Motamed, 

Edwin Young, and Chengxia You

Fruit and Vegetable 

Planting Restrictions: 

Analyzing the Processing 

Cucumber Market

VGS-342-02

February 2011

Contents

Approved by USDA’s 

World Agricultural 

Outlook Board

Planting Flexibility Offered 

by the 2008 Farm Act . . . . . . . . 2

Who Is Affected 

by Planting Flexibility? . . . . . . 3

Production of Processing 

Cucumbers: A Primer . . . . . . . 5

Quantifying the Role 

of Farm Policy . . . . . . . . . . . . . 10

Conclusions . . . . . . . . . . . . . . . 17

References . . . . . . . . . . . . . . . . 19

Appendix: Farm Program 

Payment Reductions With 

and Without the Planting 

Transferability Pilot Program 

(PTPP) . . . . . . . . . . . . . . . . . . . 21

Abstract

This report highlights the anticipated consequences of the 2008 Farm Act’s Planting 

Transferability Pilot Program (PTPP) on processing (pickling) cucumber plantings. 

PTPP allows program crop growers in seven Upper Midwestern States to reduce 

base acres and plant select vegetables for processing on those acres without reducing 

Government payments on their remaining base acres. Stagnant market demand and 

the farmers’ ability to enter or expand processing cucumber production without the 

pilot program may explain why the acres planted to pickling cucumbers may increase 

only marginally. Our fi ndings suggest that PTPP would increase production by 180 

acres, or by less than 0.5 percent of acreage in the Upper Midwestern States. About 

half an average-sized cucumber farm (43 acres) would be created in the region due to 

PTPP and an additional 137 acres would be planted by existing processing cucumber 

growers. With these small changes in regional cucumber acreage, PTPP is not likely 

to affect the national market and price outlook. The availability of nonbase acres, prior 

planting history, and distance to a processor are signifi cant variables in determining 

planted cucumber acres.

Keywords: Planting fl exibility, processing vegetables, pickling cucumbers, nonbase 

acres, Planting Transferability Pilot Program (PTPP), agricultural policy

Acknowledgments

The authors appreciate the input and data shared by colleagues at USDA’s Farm 

Service Agency (FSA): Sandy Bryant, Joy Harwood, and Brent Orr. We also would 

like to thank the reviewers for their comments: Joe Balagtas (Purdue University), Joy 

Harwood (FSA), Brad Rickard (Cornell University), Suzanne Thornsbury (Michigan 

State University), Bernard Zandstra (Michigan State University), and our colleagues 

from Economic Research Service—Molly Garber, Lewrene Glaser, Suchada Langley, 

Gary Lucier, and Donna Roberts. The authors also benefi tted from communication 

with Daniel Ford (FSA), Tom Hockert (FSA), Paul Mitchell (University of Wisconsin), 

and James Woodley (FSA). Thanks also to Angela Anderson and Cynthia A. Ray for 

editorial and design assistance.

The use of commercial and trade names does not imply approval or constitute 

endorsement by USDA.
2

Fruit and Vegetable Planting Restrictions: Analyzing the Processing Cucumber Market / VGS-342-02

Economic Research Service/USDA

This report previews the effects of the 2008 Food, Conservation, and Energy 

Act’s (henceforth referred to as the Farm Act) Planting Transferability Pilot 

Program (PTPP), with a special focus on cucumbers planted for processing 

(pickling). Designed to observe how markets might respond to greater fl exibility, PTPP permits farmers in seven Upper Midwestern States (Illinois, 

Indiana, Iowa, Michigan, Minnesota, Ohio, and Wisconsin) to reduce base 

acres and plant select vegetables for processing (cucumbers, green peas, 

lima beans, pumpkins, snap beans, sweet corn, and tomatoes) on those acres 

without foregoing Government payments on their remaining base acres. Base 

acres are defi ned as the amount of a farm’s acreage eligible for commodity 

program payments.

PTPP emerged in response to claims by Midwestern vegetable processors 

that access to vegetables for pickling, tomato paste, and canned beans, among 

other foods, has been constrained by the traditional planting rules of USDA’s 

Farm Service Agency (FSA), the administrative agency for agricultural 

commodity programs. These statutory fruit and vegetable planting restrictions were enacted in 1990 to address the produce sector’s concerns that 

payments to farms with base acres planted to fruits and vegetables could lead 

to signifi cantly lower prices, which would be unfair to a sector that received 

relatively modest Government support. In contrast, PTPP permits producers 

to reduce base acres and plant fruits and vegetables with a resulting acrefor-acre loss of farm commodity payments; these producers would, without 

PTPP, face a higher penalty.

We examined the processing cucumber market because pickling cucumbers 

are grown in six of the seven Upper Midwestern States eligible for PTPP. 

One of these States—Michigan—is the Nation’s largest pickle producer, for 

which processing cucumbers are primarily intended. Together, these six States 

account for 47 percent of domestic pickling cucumber production. Similar to 

the markets for other processing vegetables, the market for pickling cucumbers 

has declined moderately, averaging 591,000 tons over the last two decades 

nationwide and falling from a peak of 654,000 tons in 1990 to 543,000 tons 

in 2009 (USDA, National Agricultural Statistics Service, 2009). Per capita 

consumption of pickling cucumbers has also declined from an average of 5.6 

pounds (farm-weight) in the 1970s and 1980s to 4.6 pounds in the 1990s and 

4.2 pounds in the current decade (USDA, Economic Research Service, 2009).

Taking advantage of farm-level planting and program participation data from 

FSA, we tracked farm-level production and farm program participation.1

These data also identifi ed individual farms’ vegetable acreage and the availability of base acres, enabling us to conduct a detailed evaluation of planting 

constraints, the impact of increased planting fl exibility under PTPP, and 

limits on actual planting decisions within the seven Upper Midwestern States. 

Using these data, we examined how potentially new and existing processing 

cucumber growers will respond to PTPP. Legislators might then better understand the infl uence of this policy lever on acreage outcomes, as well as its 

ultimate impact on the market for cucumbers and other fruits and vegetables.

 1Studies prior to PTPP that examined the impact of eliminating planting 

restrictions relied on highly aggregated 

State-level data and pointed to varying 

outcomes (Althoff and Gray, 2004; 

Johnson et al., 2006; Thornsbury et al., 

2007; and Informa Economics, 2007).

Planting Flexibility Offered 

 by the 2008 Farm Act
3

Fruit and Vegetable Planting Restrictions: Analyzing the Processing Cucumber Market / VGS-342-02

Economic Research Service/USDA

Under the 2008 Farm Act, recipients of funds from the Direct and Countercyclical Payment (DCP) Program and Average Crop Revenue Election (ACRE) 

Program can plant whatever they like on their base acres except for fruits, 

vegetables, and wild rice.2 More specifi cally, DCP and ACRE payments are 

partially or fully forfeited each year when fruits and vegetables are planted 

on base acres. PTPP, however, opens the door for market conditions to play 

a more prominent role in farmers’ crop selection and acreage decisions. To 

show how PTPP works, table 1 summarizes the options facing a PTPP participant compared with a producer prior to 2009. 

Both before and after PTPP, farms can expand fruit and vegetable acreage 

on nonbase acres without losing DCP/ACRE payments. Farm program rules 

permit fruits and vegetables to be grown on base acreage if the farm has a 

history of planting fruits and vegetables. PTPP confers similar privileges to 

participants as those realized by DCP/ACRE participants with a history of 

planting fruits and vegetables—namely, a 1-for-1 reduction in payments for 

each base acre of vegetables planted annually. Without PTPP, farms with 

no planting history would receive a higher penalty. The appendix presents a 

detailed discussion of the factors that can affect payments.

Conceptually, relaxing planting restrictions through PTPP could expand the 

supply of processing vegetables. In practice, however, any supply response 

is likely to be small. First, many farms that grow program and horticultural 

crops have already established planting history and are unaffected by the 

current restrictions. Second, PTPP permits no more than 75,000 base acres 

to be added as nonbase and planted to processing vegetables for the entire 

Upper Midwest area. This allowable increase amounts to only a 14.1-percent 

share of processing vegetable plantings in those seven States.3

 2Tree nuts are included in this restriction. However, lentils, mung beans, and 

dry peas are excluded.

 3Processing cucumbers, green peas, 

snap beans, sweet corn, and tomatoes 

accounted for 532,700 planted acres according to available data for 2009 from 

USDA’s National Agricultural Statistics 

Service for Midwestern States.

Who Is Affected by Planting Flexibility? 

Table 1

Farm planting options before and after PTPP

Before PTPP After PTPP

Planting history

Plant on 

nonbase 

acres

Plant on base 

acres

Plant on 

nonbase acres

Reduced 

base acres

With fruit and 

vegetable history

No loss of 

payment

Acre-for-acre 

payment loss

No loss of 

payment

Payment 

made on 

reduced base 

acres

Without fruit and 

vegetable history

Minimum of: 

(1) Acre-foracre payment 

loss plus 

market value 

of vegetables; 

or (2) Entire 

DCP payment

PTPP=Planting Transferability Payment Program.

DCP=Direct and Countercyclical Payment Program.

Source: USDA, Economic Research Service.
4

Fruit and Vegetable Planting Restrictions: Analyzing the Processing Cucumber Market / VGS-342-02

Economic Research Service/USDA

Perhaps more importantly, various factors—demand-side constraints limiting 

growth, agronomic constraints, labor availability, and startup costs for 

specialized equipment—may dissuade growers from entering or expanding 

vegetable production. Most vegetables destined for processing are grown 

under contract, and farmers participating in PTPP must demonstrate that 

they have a marketing contract for the product prior to enrollment (USDA, 

Farm Service Agency). Processors are aware that longrun demand in the 

United States is stagnant or declining and that, before they contract with new 

producers for acreage or for expanded acreage with existing producers, they 

must locate, develop, and secure market outlets—which can be diffi cult. 

An operator may enter into a new contract with a processor because he or she 

perceives that doing so will increase net returns; and PTPP provides the fl exibility to do so, particularly for those without a history of planting processing 

vegetables. Some growers may perceive that they could accrue higher net 

returns because of the comparative advantage of their land (particularly if 

it is sandy, well-drained soil) and if they already own irrigation equipment 

(USDA, Farm Service Agency, October 2010). Alternatively, some growers 

may want to diversify their crops to reduce their risk or to grow vegetables 

as part of a crop rotation system to mitigate pests and diseases (USDA, Farm 

Service Agency, October 2010).

Few payment recipients enrolled in PTPP in 2009 and 2010. FSA reports that 

155 farms reported planting 10,215 acres under PTPP in 2009, 13.6 percent 

of the 75,000 allowable acres by statute (table 2).The data indicate that 5 

fewer farms participated in 2010 than in 2009, with 43 farms participating 

across both years. At this point, we cannot determine whether additional 

acres under the pilot program will be planted in subsequent years. 

Table 2

Planting Transferability Pilot Program (PTPP) 

allowable acreage and use, 2009

States

Base acres 

allowed under 

PTPP

Base acres 

actually planted

Share of 

allowable base 

acres used

Illinois 9,000 1,921 21.3

Indiana 9,000 2,567 28.5

Iowa 1,000 113 11.3

Michigan 9,000 572 6.4

Minnesota 34,000 4,273 12.6

Ohio 4,000 274 6.9

Wisconsin 9,000 495 5.5

Total Midwest region 75,000 10,215 13.6

Note: PTTP covers the following processing vegetables: cucumbers, green peas, lima beans, 

pumpkins, snap beans, sweet corn, and tomatoes.

Source: USDA, Economic Research Service, Vegetables and Melons Outlook, 2009, and ERS 

calculations based on USDA, Farm Service Agency data. 
5

Fruit and Vegetable Planting Restrictions: Analyzing the Processing Cucumber Market / VGS-342-02

Economic Research Service/USDA

Special cultivars are used for pickling cucumbers, which are not the same as 

the fresh cucumbers (slicers) purchased by consumers at retail outlets. In the 

seven Upper Midwestern States, processing cucumbers are usually seeded 

beginning in late May when the risk of frost has passed and temperatures 

exceed 68 degrees Fahrenheit (Crop Profi le, 1999; Swiader et al., 2002). 

While cucumbers can be grown in most soil types, they must be supplied 

with nutrients and continuous moisture to attain favorable growth (Swiader 

et al., 2002). Approximately half of the pickling cucumbers grown in the 

Midwest are irrigated. They mature around 60 days after planting, depending 

on the cultivar, with harvest taking place August through October (Swiader et 

al., 2002; Crop Profi le, 1999). Cucumbers should be pickled within 24 hours 

of harvest, but not before being carefully washed and trimmed (Smith, 2010). 

Cucumbers are usually rotated with corn, soybeans, tomatoes, or a cover crop 

for a minimum of 2 years to limit diseases and pests (Crop Profi le, 1999; 

Swiader et al., 2002). 

Similar to other processing vegetables, cucumbers are usually grown under 

contract with a briner or packer and, while contracts are written annually, 

long-term relationships between the grower and packer are common 

(Martinez, 2006). In 2008, a comparison of contracted and actual acres 

planted indicates that over 80 percent of the crop was under contract in 

the seven Upper Midwestern States. Contracts often specify the tonnage 

or the number of acres to be grown and the prices offered for various size 

cucumbers (Armbruster and Helmuth, 1981). The processor usually selects 

and provides the cultivar to the grower (Swiader et al., 2002). Processors 

also often determine the method of harvesting. For example, 95 percent of 

the processing acreage in Michigan is harvested by once-over mechanical 

methods (Swiader et al., 2002). Processors may provide the machines and 

operators to growers according to contract specifi cations (Swiader et al., 

2002). In these instances, the entry costs for a new grower would be lower. 

In terms of farm revenue, higher prices in recent years have helped offset a 

decline in pickling cucumber acreage. As shown in table 3, the farm value of 

pickling cucumber production nationwide reached a record $181 million in 

2009, refl ecting higher 2009 prices ($333 per ton). While prices have been 

trending upward since the 1990s, yield and acres harvested remained stagnant at 5.5 tons per acre and 114,000 acres until the mid-2000s, when acreage 

began to decrease. By 2008, acreage harvested had fallen to under 100,000 

acres, refl ecting a decline in supply. Contract prices increased relative to the 

decline in output, accounting for the increase in farm revenue. Clearly, both 

growers and processers would benefi t from renewed consumer interest 

in pickles.

Producers are eligible for PTPP in four of the eight largest producing States 

(by area and production)—Michigan, Ohio, Wisconsin, and Indiana—which 

ranked fi rst, fi fth, sixth and eighth, respectively, and accounted for 44 percent 

of U.S. processing cucumber acreage in 2009. The acreage share held by 

these four Midwest States has been growing over the last two decades as the 

industry has slowly consolidated into areas with lower per unit costs. 

Production of Processing Cucumbers: 

 A Primer 
6

Fruit and Vegetable Planting Restrictions: Analyzing the Processing Cucumber Market / VGS-342-02

Economic Research Service/USDA

Other areas of signifi cant growth include North and South Carolina, Florida, 

and Texas, which harvest counter-seasonally to the Midwest as cucumbers 

are a warm-season crop with an ideal growing temperature of 82 degrees 

(Swiader et al., 2002). For the 2009 crop, for example, Florida plantings 

occurred in January for a spring harvest, while Midwest States usually 

produced a summer/early fall crop (USDA, National Agricultural Statistics 

Service, 2009). Imports of pickling cucumbers from India, Mexico, Canada, 

and Honduras add to domestic supply and have been increasing in the last 

several years, peaking at a fresh-weight equivalent of 113 million pounds, or 

7 percent of domestic disappearance in 2009 (USDA, Economic Research 

Service, 2009). Processors have been interested in augmenting domestic 

supply with imports to achieve a greater consistency in product that is often 

demanded by mass merchandisers. 

According to FSA data, 323 farms harvested 28,766 acres of processing 

cucumbers in 2009 in the seven Upper Midwestern States (table 4).4 These 

farms controlled 143,448 acres, of which 69,041 acres were allocated to 

program crops, predominantly corn and soybeans. These farms also apportioned another 16,710 acres to other processing vegetables—including crops 

not covered by PTPP—such as potatoes. These data, combined with other 

FSA information, indicate that the majority of acres allocated to fruits and 

vegetables (57,078 acres) on these farms were for processing vegetables.

Over the period 2002-09, the number of FSA farms producing cucumbers for 

processing in the seven Upper Midwestern States decreased, while average 

per-farm acreage expanded. In 2009, 323 farms averaged about 89 acres 

planted to cucumbers, while in 2002, 503 farms planted about 63 acres each 

(fi g. 1). The three States with the largest number of cucumber-producing 

farms—Michigan, Wisconsin, and Ohio—all experienced a decline in 

farm numbers. 

4National Agricultural Statistics Service’s 2007 Census of Agriculture indicates that 198 farms harvesting 45,700 

acres of cucumbers for processing in 

these seven States. The FSA count 

differs from the census for two reasons. 

First, FSA uses a smaller administrative 

unit to defi ne a farm (see box, “What Is 

a Farm Under the Farm Service Agency 

Defi nition?”), suggesting that the 

number of FSA farms relative to census 

estimates would be larger. Second, the 

census is comprehensive in counting 

farms relative to FSA farms, which are 

limited to those participating in Government programs.

Table 3

U.S. cucumbers for pickling: Area, production, and value

Year

Area 

harvested

Yield per 

acre Production

Average 

price Crop value 

Acres Tons $ thousands

1990 115,490 5.66 653,480 209 136,313

1995 117,090 5.22 611,180 222 135,933

2000 104,710 5.86 613,160 269 164,956

2001 108,260 5.37 581,540 291 168,958

2002 117,800 5.26 619,310 273 169,006

2003 118,800 5.46 648,430 275 178,328

2004 113,500 5.23 593,880 269 159,643

2005 110,500 4.89 540,080 256 138,391

2006 103,000 4.90 505,190 305 153,968

2007 101,500 5.33 541,230 325 175,822

2008 96,600 5.87 567,100 316 178,998

2009 97,500 5.57 542,600 333 180,845

Source: USDA, Economic Research Service, Vegetables and Melons Yearbook, 2009. 
7

Fruit and Vegetable Planting Restrictions: Analyzing the Processing Cucumber Market / VGS-342-02

Economic Research Service/USDA

Ta ble 4

Farm Service Agency farms producing processing cucumbers 

in the seven Upper Midwestern States, 2009

Crop allocation Number of farms and area

Number

Number of farms 323

Acres

Total acres 143,448

Program crops 69,041

Fruit and vegetables: 57,078

Processing cucumbers 28,766

Other pilot program processing vegetables 10,320

Processing potatoes 6,390

Other fruit and vegetables 11,603

CRP, trees, and grass 8,832

Other nonrestricted crops 8,497

Total 143,448

Base 83,565

Nonbase 51,051

CRP, trees, and grass 8,832

CRP =Conservation Reserve Program.

Source: USDA, Economic Research Service calculations based on Farm Service Agency data. 

Figure 1

Farms and acreage in cucumbers for processing 

in the seven Upper Midwest States

2002 03 04 05 06 07 08 09

0

100

200

300

400

500

600

Farms

Average cucumber acres

Number

Source: USDA, Economic Research Service calculations based on Farm Service Agency data.
8

Fruit and Vegetable Planting Restrictions: Analyzing the Processing Cucumber Market / VGS-342-02

Economic Research Service/USDA

Acreage allocated to large cucumber operations has increased over 2002-09. 

Seventy percent of processing cucumber acres harvested in the seven Upper 

Midwestern States came from 22 percent of FSA farms in 2009. These farms 

each apportioned at least 100 acres to processing cucumbers (tables 5). Additionally, the number of farms planting over 500 acres increased from 6 to 

8 over 2002-09, accounting for 17 percent of cucumber acres harvested 

in 2009.

Are cucumber growers losing payments as a result of planting restrictions? 

To fi nd out, we separated acreage on FSA farms that harvest processing 

cucumbers into base acres, nonbase acres, and environmental land (conservation reserve, grass, and trees) (see table 4). Base acres accounted for 83,565 

acres and nonbase acres accounted for 51,051 acres of the total 143,500 acres 

on farms planting cucumbers in the seven PTPP States in 2009.5 Nonbase 

acres were primarily allocated to vegetables and, to a lesser extent, sugar 

beets. Since the acres designated to fruits and vegetables (57,000 acres) 

exceeded nonbase acres, some farms must have incurred a reduction in DCP 

(or ACRE) payments. For those farms with a history of planting fruits and 

vegetables, the loss was calculated acre-for-acre for each base acre planted to 

fruits and vegetables. 

Sixty-three percent of farms that produced cucumbers (202 farms) in 2009 

incurred an average payment reduction of $190,600, or slightly less than 

$950 per farm.6 For these farms, the profi t-maximizing decision to forgo 

payments may refl ect the expected net returns for planting restricted crops 

relative to the expected net return for planting corn or soybeans (or an alternative crop) plus the Government payment at the margin. As mentioned 

earlier, other growers may opt to plant pickling cucumbers because they want 

to diversify their crops to reduce risk or they may want to grow vegetables as 

part of a crop rotation system to mitigate pests and diseases.

Apart from planting cucumbers on nonbase acres, farms looking to expand 

production without losing payments can rent or purchase land from neighboring operations. For example, in Bay County, MI (the largest cucumber 

growing county in 2009), only 11 percent of cropland was farmed by 

processing cucumber growers. Growers can acquire nonbase acres or land 

with planting history by leasing or purchasing from other farms with limited 

or no payment reductions. Bay County cucumber growers controlled over 

6,900 nonbase acres, of which 6,100 acres were allocated to fruits and vegetables. Meanwhile, FSA producers in Bay County operated 43,100 nonbase 

acres, of which 23,200 were allocated to fruits and vegetables. A grower’s 

 5In reviewing the FSA data, we found 

that 22 farms indicated that they had 

more base acres than total acres. We 

adjusted the estimate downward for 

base acres so they would not exceed 

total acres.

 6We assume implicitly that 202 farms 

have vegetable history (63 percent); 

otherwise, their payment losses would 

be more substantial. We derived the 

$190,600 by calculating the number 

of restricted (fruit and vegetable) 

acres exceeding nonbase acres (nearly 

15,300) for the 202 farms and assumed 

an average of $12.46 per acre payment 

forgone (average DCP payment per 

acre for soybean and wheat base for 

these farms). The remaining cucumber 

farms (121) had more nonbase acres 

than fruit and vegetable acreage.

Tab le 5

Size distribution of farms harvesting cucumbers 

for processing in the seven Upper Midwestern States, 2009

Size of cucumber farms Farms Share of total farms Share of total acres

Number -------------Percent-------------

Less than 10 acres 33 10.2 0.4

10-49 acres 145 44.9 18.1

50-99 acres 73 22.6 15.5

100 acres or more 72 22.3 65.9

Source: USDA, Economic Research Service calculations based on Farm Service Agency data.
9

Fruit and Vegetable Planting Restrictions: Analyzing the Processing Cucumber Market / VGS-342-02

Economic Research Service/USDA

ability to acquire additional acreage suggests that, while nonbase acreage 

among cucumber growers is limited (800 nonbase acres), substantially more 

nonbase acres are available within the county (19,900 acres). The availability 

of nonbase acres might explain why farms reconstituted7 over the last several 

years to obtain nonbase acres and avoid reductions in Government payments. 

In fact, over 95 percent of the Bay County cucumber growers enrolled in 

FSA programs reconstituted over the 2002-09 period.

 7Operators can “reconstitute” a 

farm for FSA purposes to account for 

changing landlord/tenant relationships, 

to refl ect the purchase of additional 

land, or to address other issues. In such 

cases, FSA assigns a new farm number, 

even though the farm operator may or 

may not have changed.

What Is a Farm Under the Farm Service Agency 

Defi nition?1

Many agricultural producers farm a combination of owned and rented 

land. Together, the combinations comprise the total “farm operation” 

or what is referred to as the “farm” in USDA’s Agricultural Census. 

Economic Research Service estimates that 844,000 farms (38 percent 

of all census farms) received Government payments in 2008.

Land is frequently rented from multiple landowners. If all ownership 

combinations were combined into a single unit, it would be impossible 

administratively to track program parameters and ascertain payment 

attribution given the changing nature of landowner-tenant relationships 

over time. USDA’s Farm Service Agency maintains farm records based 

on smaller administrative units (farms) consisting of varying groups 

of owners and operators. Records are maintained for over 2.2 million 

administrative farm units. A farmer may operate on a number of “FSA 

farms.” For example, Farmer Jones farms 380 acres of land on three 

FSA farms: 

• Farm A consists of 75 acres of land share leased by Farmer Jones but 

owned by brothers Bill and Jim Smith.

• Farm B consists of 50 acres owned by Farmer Jones, 25 acres share 

leased from Mrs. Applebee, and 30 acres share leased from John 

Applebee, Mrs. Applebee’s son.

• Farm C consists of 200 acres of land owned by Farmer Jones.

Each farm must be enrolled separately with FSA. When electing and 

annually enrolling in the Direct and Countercyclical Payment (DCP) 

Program or Average Crop Revenue Election (ACRE) Program, farm 

operators, such as Farmer Jones, must treat each farm separately, 

enrolling one farm but not necessarily the other farms. All owners, 

operators, landlords, tenants, and sharecroppers must agree in writing 

to participate in the commodity programs. Thus, it is likely that some 

farmers will not enroll their entire farm operation. Farmers who elect 

DCP for some farms and ACRE for others are able to diversify their 

farm program portfolio. More details are available in USDA’s Farm 

Service Agency Handbook.

1Adapted from Andrea Woolverton and Ed Young, Factors Infl uencing ACRE Program 

Enrollment, USDA, Economic Research Service, ERR-94, December 2009.
10

Fruit and Vegetable Planting Restrictions: Analyzing the Processing Cucumber Market / VGS-342-02

Economic Research Service/USDA

So far, our discussion has focused on the current state of the processing 

cucumber industry. In this section, we investigate how PTPP may affect 

cucumber plantings. PTPP was designed to reveal how producers would react 

if given the chance to grow processing vegetables on their base acres without 

incurring penalties. When an operator signs up for PTPP, base acres allocated 

to processing vegetables are reduced and added to nonbase acres. Thus, the 

real measure of PTPP’s potential impact is captured in the additional nonbase 

acreage at each farmer’s disposal. To analyze the impact of PTPP, we used 

a farm’s planting history and its available nonbase acres as proxies for 

constraints that the PTPP was intended to relax. 

Data

The FSA dataset for the seven Upper Midwestern States contains nearly a 

million farm-level observations for 2009 (fi g. 2). The vast majority of these 

farms did not report acres planted in cucumbers. Cucumber production, 

however, tended to occur in geographic clusters because of agroclimatic similarities, information sharing among neighboring producers, and proximity 

to vegetable processors. Thus, we limited our total sample to just those FSA 

farms that belonged to the 45 counties in 2009 that had at least 1 planted acre 

of cucumbers destined for processing. Of the 52,060 farms in these counties, 

281 actually grew cucumbers for processing.8

Planting History and Nonbase Acres

Under current law, farms with a history of planting fruits and vegetables 

forego payments on base acres planted to fruits and vegetables on an acre-

 8The data used for the econometric 

analysis are a subset of the FSA farms 

described earlier. We used this data 

because we could not identify the locations of all the FSA-surveyed farms for 

the purpose of calculating distances 

to processors. Thus, our quantitative 

analysis focuses on 281 farms rather 

than 323 farms growing cucumbers for 

processing.

Quantifying the Role of Farm Policy

Figure 2

Composition of farm sample

Farms covered by FSA 

(i.e. farms that receive 

payments)

n = 943,000

Farms in counties 

where pickling 

cucumbers were 

produced

n = 52,060

Farms 

that grew 

pickling 

cucumbers

n = 281

 

FSA=Farm Service Agency.

Source: USDA, Economic Research Service calculations based on Farm Service Agency data.

All farms 

in the seven 

Upper Midwestern States
11

Fruit and Vegetable Planting Restrictions: Analyzing the Processing Cucumber Market / VGS-342-02

Economic Research Service/USDA

for-acre basis.9 For farmers without planting history, however, the amount 

lost is much greater: Planting just 1 acre of cucumbers on base acres can 

cause a grower to lose as much as their entire DCP or ACRE Government 

payment. Few, if any, profi t-maximizing farmers without planting history 

would likely jeopardize their total annual program payments to grow cucumbers. For this reason, producers would confi ne any acres in cucumbers to 

the farm’s nonbase area (or by renting or buying additional land). If the area 

(base or nonbase) available to farmers increases through renting or buying 

additional land, then the farm can plant program or nonprogram crops on that 

acreage. Of the 281 cucumber producers in our sample, we estimated at least 

65 percent had farm history in planting vegetables.10

Distance to Processors

Since the pilot program pertains to vegetables destined for processing, 

an additional factor underlying vegetable acreage is the cost of shipping 

harvested vegetables to processors. Profi t-maximizing vegetable growers will 

choose to grow within a radius of processors that ensures their profi ts will 

not be negatively impacted. Thus, we account for the distance between each 

FSA farm and its nearest vegetable-specifi c processor. Figure 3 illustrates 

the spatial distribution of cucumber acreage relative to processor locations. 

Forty-fi ve counties grow pickling cucumbers in the seven Upper Midwestern 

States eligible for PTPP, with the largest share across central Michigan and 

central Wisconsin. Four counties in east central Michigan (Gratiot, Bay, 

Saginaw, and Tuscola) and Portage County in central Wisconsin host the 

largest acreage (table 6).

 9Planting history is not reported in 

the FSA data used for this analysis. For 

this reason, we resort to an inference 

of vegetable planting history based on 

the planting behavior of FSA farms. 

Any FSA farm observed to plant more

acres in vegetables than the number of 

nonbase acres on that farm is judged to 

have farm planting history, since otherwise, the farm might have to forego 

its entire program payment, an extreme 

and unlikely decision. From the sample 

of 52,060 FSA farms, about 30 percent 

of the farms were inferred to have farm 

planting history. 

10Other FSA farms also may have 

vegetable history but choose not to 

plant processing vegetables beyond 

their nonbase acreage. Thus, the 65 

percent estimate may be an understatement.

Figure 3

Cucumber acreage and processor location, by county, 2009

Source: USDA, Economic Research Service calculations based on Farm Service Agency data.

Cucumber acreage

Cucumber processors
12

Fruit and Vegetable Planting Restrictions: Analyzing the Processing Cucumber Market / VGS-342-02

Economic Research Service/USDA

Throughout the region, 18 fi rms predominantly located in Saginaw, Kalamazoo, and Kent counties commercially process cucumbers.11 Key processors include Bay Valley Foods, ConAgra Foods, Freestone Pickle Company, 

Gielow Pickle Company, Hausback Pickle Company, Heinz North American, 

Kraft Foods-Claussen Pickle Company, and Pinnacle Foods Company. 

Because of the specialized equipment required, most cucumber processors 

focus mainly on pickling facilities. We estimated that an FSA farm growing 

pickling cucumbers is 41 miles, on average, away from the nearest processor. 

The average distance to the nearest cucumber processor across all FSA 

farms in the 45 counties evaluated is about 64 miles. Although transportation is costly, particularly for longer hauls, Midwest processors may contract 

counter-seasonally with growers in other States, such as North Carolina, to 

operate effi ciently year round.

Additional Important Factors

In addition to the three variables discussed thus far—nonbase acres, planting 

history, and distance to a processor—we also included a control for a farm’s 

planting experience (defi ned as cucumber plantings in the previous year, or in 

this case 2008). The idea is that recent cucumber planting experience reduces 

the informational and technical barriers a fi rst-time farmer would otherwise 

face. An additional variable—a farm’s total size—captured the effect of 

scale economies on cucumber production. Defi ned as the sum of its base 

and nonbase acres (equivalent to total planted acres), farm size is believed to 

refl ect the commercial and managerial attributes of the producer, which are 

relevant factors in predicting the number of acres planted in cucumbers.12

 11The number and location of processors came from Judge’s North American Food Processors database and 

Pickle Packers International. These data 

sources may not be comprehensive.

 12Note that the Farm Service Agency 

maintains records based on administrative units (an FSA farm) consisting of varying groups of owners and 

operators. A farmer or other qualifying 

entity may operate one or several FSA 

farms and thus our size variable may 

not fully capture scale economies. See 

box, “What Is a Farm Under the Farm 

Service Agency Defi nition?” for more 

details on an FSA farm. 

Table 6

Major cucumber producing counties in the PTPP area, 2009

State County Area planted

Acres

Indiana LaPorte 1,169

Michigan Allegan 955

Arenac 1,021

Bay 3,918

Gratiot 2,289

Midland 715

Montcalm 991

Saginaw 3,667

St. Joseph 2,989

Tuscola 2,140

Ohio Sandusky 874

Wisconsin Portage 2,618

Waupaca 580

Waushara 501

PTPP= Planting Transferability Pilot Program.

Note: Only counties with more than 500 acres are listed.

Source: USDA, Economic Research Service calculations based on Farm Service 

Agency data. 
13

Fruit and Vegetable Planting Restrictions: Analyzing the Processing Cucumber Market / VGS-342-02

Economic Research Service/USDA

Finally, we added State-level controls to capture the array of State-specifi c 

effects (e.g., policy, climate) that were unobservable. 

Analysis and Results

As discussed previously, PTPP permits farms to reduce base acres and plant 

processing vegetables on those acres, which essentially adds nonbase acres 

to the farm for the participating year. For this reason, we relied on a farms’ 

nonbase acreage to proxy for the role of PTPP and posed two questions: 

1. Does the extra nonbase acreage attract new farms into pickling 

cucumber production? 

2. Does the extra nonbase acreage translate into more cucumber acreage for 

farms already producing cucumbers? 

Our research indicated that the answer to both questions is “yes.” An additional 1-percent increase in the availability of nonbase acreage (approximately 10,000 acres) added to about half an average-sized cucumber farm, or 

about 43 acres. For farms that already produce cucumbers, an extra 1 percent 

of nonbase acreage was associated with an additional 137 total acres across 

the region. In other words, an extra 1-percent availability in nonbase acreage 

might add about 180 acres of cucumbers in the seven Upper Midwest States. 

To provide more detail, we concentrated our analysis on two types 

of outcomes: 

1. Whether or not farms grow cucumbers; and 

2. If they do, the number of cucumber acres they expected to plant. 

We hypothesized that the effect of nonbase acres on both outcomes was 

greater for farms without vegetable farm history than those with; the implication being that without the pilot program, farmers may be constrained from 

fully reacting to market signals. To capture the varying responses across 

farms with and without history, we included a farm history indicator plus 

an interaction term between farm history and nonbase acreage. Farms with 

history were assigned the value 1. Thus, the effect of nonbase acreage for 

farms with history was the difference between the estimated coeffi cients on 

nonbase acres and the interaction term. 

For the fi rst outcome of interest—whether farms grow cucumbers—we built 

a simple farm-level econometric model. This dichotomous response was 

modeled using a simple logit maximum likelihood framework. We estimated 

the model over the entire set of FSA farms in the 45 counties where pickling 

cucumbers are grown (52,060 observations) to generate predictions for yes/

no processing cucumber plantings. Note that this sample included producers 

of all crops in these 45 counties, the vast majority of which did not cultivate 

vegetables, much less cucumbers. Table 7 presents summary statistics of the 

variables used in the analysis. 
14

Fruit and Vegetable Planting Restrictions: Analyzing the Processing Cucumber Market / VGS-342-02

Economic Research Service/USDA

The formal model appears as follows: 

plantij = β0+ β1 

nbaij+ β2 sizeij+ β3 distanceij+ β4vegexp+ β5historyij

+ β6historyij 

.nbaij+ δj + εi

Plant is an indicator variable that takes the value 1 if the farm was observed 

to plant cucumbers and zero otherwise. The variable nba is the log of the 

nonbase acreage on the farm; size is the total number of acres on the farm; 

distance is the log distance from the farm to the nearest vegetable processor; 

vegexp is an indicator that takes the value 1 if the farm planted cucumbers in 

2008; and history is an indicator that takes the value 1 if the farm is inferred 

to have a planting history in fruits and vegetables. Farm history is established 

if fruits and vegetables were planted on base acres in any year between 1998 

and 2001.13 A dummy term δ is also included to capture unobservable effects 

(e.g., policy or economic characteristics) that operate at the State level. ε is 

an independently, normally distributed error term. Subscripts i and j identify 

the farm and the Midwestern State to which it belongs, respectively. Table 8 

presents the average marginal effects from the logit regression.

A key result indicates that an extra 1-percent increase in available nonbase 

acres to a farm without history raises the average probability of cucumber 

farming by 0.002 percentage points. Applying this increase to the number of 

cucumber farms in the total sample implies that about 0.56 (281 x 0.002) new 

farms existed in the region. Also, note that the additional nonbase acres had 

no effect on farms with history (coeffi cient on log nonbase acres (0.002) plus 

coeffi cient on planting history x log nonbase acres (-0.002)), as anticipated. 

Since the average cucumber farm had 87 acres in cucumbers, we concluded 

that a 1-percent increase in nonbase acres would add about 43 extra acres into 

processing cucumber production for the entire 45-county region in question. 

In the second model, we confi ned our analysis to the subset of farms that 

were observed to actually plant cucumbers and estimated the same variables’ 

effects, using ordinary least squares regression, on the number of acres 

planted to cucumbers. Table 9 presents the summary statistics of this smaller 

sample of farms, and table 10 presents the results from the regression.

 13Farm history can also be established if the farm had a history of such 

plantings under production fl exibility 

contracts in the 1996 Farm Act.

Table 7

Summary statistics for all producers in process-cucumber-producing counties, n=52,060

Variable Mean Standard deviation

Cucumber planting (0/1 indicator) 0.005 0.073

Nonbase acres 18.9 89.6

Total acres 109.84 208.4

Distance to processor (miles) 64.6 58.7

Vegetable experience (0/1 indicator) 0.004 0.06

Planting history (0/1 indicator) 0.003 0.06

Source: USDA, Economic Research Service calculations based on Farm Service 

Agency data.
15

Fruit and Vegetable Planting Restrictions: Analyzing the Processing Cucumber Market / VGS-342-02

Economic Research Service/USDA

Table 8

Average marginal effects from logit estimation for the decision 

to plant cucumbers, n=52,060, pseudo R2=0.80

Variable

Marginal 

effect

Standard 

error p-value

Log nonbase acres 0.002 0.0003 0.000

Log total acres -0.001 0.0003 0.035

Log distance -0.0004 0.0003 0.098

Vegetable experience 0.006 0.0006 0.000

Planting history 0.021 0.003 0.000

Planting history · log nonbase acres -0.002 0.0004 0.000

Source: USDA, Economic Research Service calculations based on Farm Service Agency data.

Table 9

Summary statistics for all cucumber producers, n=281

Variable Mean Standard deviation

Cucumber acres 87.2 129.6

Nonbase acres 176.9 454.5

Total acres 455.8 810.7

Distance to processor (miles) 41.6 48.0

Vegetable experience (0/1 dummy) 0.40 0.49

Planting history (0/1 dummy) 0.66 0.47

Source: USDA, Economic Research Service calculations based on Farm Service Agency data.

Table 10

Marginal effects from OLS estimation of acres planted in cucumbers, 

n=281, R2=0.49

Variable

Marginal 

effect

Standard 

error p-value

Log nonbase acres 0.543 0.117 0.000

Log total acres 0.499 0.069 0.000

Log distance -0.539 0.130 0.000

Vegetable experience 0.309 0.141 0.029

Planting history 3.103 0.542 0.000

Planting history · log nonbase acres -0.524 0.112 0.000

OLS=Ordinary least squares.

Source: USDA, Economic Research Service calculations based on Farm Service Agency data.
16

Fruit and Vegetable Planting Restrictions: Analyzing the Processing Cucumber Market / VGS-342-02

Economic Research Service/USDA

The results suggest that a 1-percent increase in nonbase acres raises the 

number of acres planted on farms already growing cucumbers without 

history by 0.543 percent and those with history by 0.019 (coeffi cient on log 

nonbase acres (0.543) plus coeffi cient on planting history x log nonbase 

acres (-0.521)). Given the average per farm area in cucumbers (87 acres), 

this implies an average per farm increase of 0.489 acres. Multiplying this 

per-farm increase by the total number of cucumber farms yields an extra 137 

extra acres (0.489 acres/farm x 281 farms) in cucumbers. Counting the acres 

from new farms that enter cucumber production (43 acres), the total number 

of acres brought into production climbs to 180. Of the 45-county area 

processing cucumbers examined here, this represents a total acreage response 

of about 1 percent. In short, a 1-percent rise in nonbase acreage translates 

into a 1-percent increase in cucumber acreage.

In addition, producers who were closer to processors planted more cucumber 

acres than those more distant; having cucumber planting experience was 

strongly correlated to continued acreage planted to cucumbers. For farms 

already producing cucumbers, the larger the farm (across all crops), the more 

acres planted in cucumbers (e.g., there is a positive farm scale effect). 
17

Fruit and Vegetable Planting Restrictions: Analyzing the Processing Cucumber Market / VGS-342-02

Economic Research Service/USDA

We addressed the possible effects of the Planting Transferability Pilot 

Program (PTPP) on the cucumber-processing market. The 2008 Farm Act 

established the fl exibility program so that growers could increase their plantings and offer more product to processors and, ultimately, to consumers. This 

study is the fi rst to address the acreage response of farmers with respect to a 

particular vegetable—in this case, cucumbers for processing—and to employ 

farm-level data to refl ect acreage decisions across a wide swath of planting 

and land-use choices. 

We examined two key variables that infl uenced a farmer’s decision to 

plant cucumbers—a farm’s vegetable planting history and the availability 

of nonbase acres. These variables essentially refl ect the constraints that 

PTPP aims to relax. From our analysis, we concluded that a 1-percent rise 

in nonbase acreage at the farm level translates into a 1-percent increase in 

cucumber acreage for the seven Upper Midwestern States evaluated. We 

found that between the added new farms and the added acres on existing 

farms, a 1-percent expansion in fl exible acreage could account for about 180 

acres in cucumbers.

From these results, the longrun outcomes associated with the PTPP seem 

subjective. On one hand, for the bulk of producers in the region who ordinarily plant program crops, the impact of the PTPP was extremely modest. 

Most Midwestern farms cannot be expected to react in any signifi cant way to 

the relaxation of planting restrictions on their base acres. Consequently, we 

would anticipate very little or no national market and price effect since the 

production changes implied by PTPP were small. For the handful of farms 

that do produce cucumbers, however, the planting restrictions apparently did 

matter and, relative to the current cucumber acreage planted, the number of 

new acres was expected to rise, although modestly.

For policymakers interested in how restrictions on fruit and vegetable 

planting at the national level might constrain overall supply, our cucumberspecifi c results point toward a minor but detectable effect. Additional 

examination of overall fruit and vegetable production—both fresh and 

processing—as well as a widened geographic scope of analysis, may open 

the door to broader conclusions. 

Our analysis suggests that farmers’ response to relaxing the planting restrictions depends on both demand- and supply-side factors and program specifi cations. In the case of processing vegetables, processors will not enter into 

contracts with growers unless they foresee consumer interest in the product 

and higher net returns relative to other cropping alternatives. In addition, 

high costs related to specialized equipment, expertise, harvest labor, and 

agronomic constraints may dissuade producers from entering the fruit and 

vegetable farm sector. 

Conclusions
18

Fruit and Vegetable Planting Restrictions: Analyzing the Processing Cucumber Market / VGS-342-02

Economic Research Service/USDA

Lastly, program rules are not always binding. As illustrated in this report, 

farmers can expand fruit and vegetable acreage on nonbase acres without 

losing Government payments. If nonbase cropland is not available within the 

farming operation, the farmer can increase or purchase nonbase cropland and 

reconstitute to include the new acreage, again without incurring a payment 

reduction. Farm program rules permit fruits and vegetables to be grown on 

base acreage if the farm has a history of planting fruits and vegetables, but 

in these cases, payments are reduced acre-for-acre for each acre of fruits 

and vegetables planted. Relative to net returns, the loss of these program 

payments may be marginal. Thus, many growers might not fi nd that the 

relaxation of planting restrictions, even within a broader geographic area 

(seven Midwestern States) and commodity type (processing), would alter 

their potential profi tability calculations. 
19

Fruit and Vegetable Planting Restrictions: Analyzing the Processing Cucumber Market / VGS-342-02

Economic Research Service/USDA

Althoff, Kyle, and Allan Gray. Analysis of the Impacts Resulting from the 

2002 Farm Bill on Indiana Fruit and Vegetable Growers, Staff Paper 

# 04-05, Purdue University, Department of Agricultural Economics, June 

2004.

Armbruster, Walter, and John Helmuth. Contract Price Reporting for Fruits 

and Vegetables, AER-467, U.S. Department of Agriculture, Agricultural 

Marketing Service, April 1981.

Crop Profi le for Cucumbers (Processing) in Michigan, June 1999, 

http://docs.google.com/viewer?a=v&q=cache:bQ7Y9myjswkJ:www.

ipmcenters.org/cropprofi les/docs/micucumbers-processing.pdf+Cucumbers+(Processing)+in+Michigan&hl=en&gl=us&sig=AHIEtb

QQAv-e6zI9JUk0PigRBp_nrDC5Mw.

Informa Economics. An Analysis of the Effect of Removing the Planting 

Restrictions on Program Crop Base, February 2007.

Johnson, Demcey, Barry Krissoff, Edwin Young, Linwood Hoffman, Gary 

Lucier, and Vince Breneman. Eliminating Fruit and Vegetable Planting 

Restrictions: How Would Markets Be Affected? ERR-30, U.S. Department 

of Agriculture, Economic Research Service, November 2006. 

Martinez, Lourdes, Suzanne Thornsbury, and Tomokazu Nagai. National 

and International Factors in Pickle Markets, AER-628, Michigan State 

University, October 2006.

Smith, S.E. “How do Cucumbers Become Pickles,” wiseGeek, November 

2010, http://www.wisegeek.com/how-do-cucumbers-become-pickles.htm. 

Swiader, J.M., G.W. Ware, and J.P. MacCollum. Producing Vegetable Crops

5th Edition, Danville, Illinois: Interstate Publishers Inc., 2002. 

Thornsbury, Suzanne, Lourdes Martinez, and David Schweikhardt. Michigan: 

A State at the Intersection of the Debate Over Full Planting Flexibility, 

CCR-29, U.S. Department of Agriculture, Economic Research Service, 

February 2007.

U.S. Department of Agriculture, Economic Research Service. Vegetables and 

Melons Yearbook, stock #89011, May 14, 2009. 

U.S. Department of Agriculture, Economic Research Service. Vegetables and 

Melons Yearbook, VGS-319, February 22, 2007.

U.S. Department of Agriculture, Economic Research Service. Farm and 

Commodity Policy Glossary Briefi ng Rooms, http://www.ers.usda.gov/

briefi ng/farmpolicy/glossary.htm#baseacreage. 

U.S. Department of Agriculture, Farm Service Agency. Planting Transferability Pilot Program: Fact Sheet, March 2009.

References
20

Fruit and Vegetable Planting Restrictions: Analyzing the Processing Cucumber Market / VGS-342-02

Economic Research Service/USDA

U.S. Department of Agriculture, Farm Service Agency. FSA Handbook: 

Direct and Counter-Cyclical Program and Average Crop Revenue Election for 2009 and Subsequent Crop Years, January 2010, http://www.fsa.

usda.gov/Internet/FSA_File/1-dcp_r03_a07.pdf.

U.S. Department of Agriculture, Farm Service Agency. Communication 

with LaPorte, Indiana County Offi ce; Mason, Illinois County Offi ce; 

and Dakota, Minnesota County Offi ce, October 2010.

U.S. De partment of Agriculture, National Agricultural Statistics Service. 

Vegetables, Agricultural Statistics Board, April 3, 2009.

U.S. Department of Agriculture, National Agricultural Statistics Service. 

2007 Census, County Summary Highlights Table 1, 2007 http://www.

agcensus.usda.gov/Publications/2007/Full_Report/Volume_1,_Chapter_2_

County_Level/Michigan/st26_2_001_001.pdf.
21

Fruit and Vegetable Planting Restrictions: Analyzing the Processing Cucumber Market / VGS-342-02

Economic Research Service/USDA

The 2008 Farm Act distinguishes two types of payment recipients—farms 

and producers—and divides them into those with planting history and those 

without. For a given FSA farm, planting history is established if fruits and 

vegetables were planted on any of their base acres in any year between 1998 

and 2001.14 For an FSA farm, history can be established by planting even 

just 1 acre of fruits or vegetables, regardless of the specifi c type, on its base 

acreage. In contrast, a producer’s history limits planting of fruit and vegetable acreage to his or her average annual history of plantings to the specifi c 

commodity. History is based on the annual average production for the years 

1991-95 or 1998-2001, as selected by the producer. For example, a producer 

might have history based on growing 50 acres of sweet corn and 25 acres in 

snap beans from 1991-95. A farm (or producer) with a history of planting 

fruits or vegetables would incur only an acre-for-acre reduction in DCP or 

ACRE payments for each base acre planted to fruits and vegetables (or a 

specifi c fruit or vegetable).

Farms or producers without any planting history (or producers who exceed 

their planting history) who opt for planting fruits and vegetables on base 

acres incur a more substantial penalty. The loss is either: 

1. An acre-for acre reduction in DCP or ACRE payment plus the market 

value of the fruits and vegetables planted; or

2. The entire DCP or ACRE payment, whichever is smaller. 

To understand how the loss of payments is calculated, consider three simple 

numerical examples presented in appendix table 1.15 In column 1, a farm 

with 100 acres composed entirely of base area plants 20 acres of fruits or 

vegetables. In column 2, a farm with 50 base and 50 nonbase acres plants 

40 acres of fruits or vegetables. In column 3, a farm with 50 base and 50 

nonbase acres plants 60 acres of fruits or vegetables. 

Under the acreage scenario described in column 1, consider the policy 

scenario in which the farm has fruit and vegetable history (row 1). In this 

case, the farm would forgo DCP/ACRE payments on the 20 acres planted 

to fruits and vegetables. The penalty becomes more stringent for producers 

with limited history (row 2) and farms or producers without history (row 3). 

For a producer with 10 acres of fruit and vegetable history, the total payment 

is reduced by the lesser of: (1) the entire DCP/ACRE payment; or (2) the 

DCP/ACRE payment on the 10 base acres (the difference between the 20 

acres planted on base acres and the history of planting fruits and vegetables 

on 10 base acres) plus the market value of the fruit or vegetable. For those 

farms or producers without fruit or vegetable history, the total payment would 

be reduced by the lesser of: (1) the DCP/ACRE payment on the 20 base 

acres and the market value of the fruit or vegetable; or (2) the total DCP/

ACRE payment. Participants in the pilot program, however, only lose one 

acre’s payment for every one acre planted in processed vegetables.

 14Planting history can also be established if a farm had a history of such 

plantings under production fl exibility 

contracts in the 1996 Farm Act.

 15Farm Service Agency Handbook

contains detailed examples illustrating 

the statutory provisions.

Appendix: Farm Program Payment 

 Reductions With and Without the Planting 

 Transferability Pilot Program (PTPP) 
22

Fruit and Vegetable Planting Restrictions: Analyzing the Processing Cucumber Market / VGS-342-02

Economic Research Service/USDA

Column 2 is easier to understand. A farm or producer that plants fewer acres 

to fruits and vegetables relative to nonbase acres incurs no loss of payment. 

In contrast, in column 3, the farm or producer (up to their history) whose 

fruit and vegetable acreages exceeds their nonbase acres will lose DCP/

ACRE payments on an acre-for-acre basis for each acre that exceeds nonbase 

area. For those farms or farmers that do not have history, the loss equals the 

DCP/ACRE payment on the 10 base acres and the market value of the fruit 

or vegetable, not to exceed the total DCP/ACRE payment. As in column 

1, participation in PTPP effectively reduces the number of base acres that 

receive payments.

To solidify understanding of payments foregone, appendix table 2 compares 

farms that rotate planting corn and cucumbers over multiple years. Suppose 

a farm has 1,000 acres composed entirely of base acres on which the grower 

plants only corn (column 1). Since no fruits and vegetables are grown, there 

is no loss of payment. However, if the farm grows 980 acres of corn and 20 

acres of cucumbers, the Government payment would be reduced by $400, 

assuming a fruit or vegetable planting history of 20 acres and a DCP payment 

of $20 per acre (column 2).

In the case of a farm or producer without fruit and vegetable history or a 

producer exceeding historical plantings, the payment reduction amounts to 

the lost DCP or ACRE payments plus the market value of the fruits or vegeAppendix table 1

Farm program payment reductions under various policy and farm scenarios

Farm acreage scenarios

Before PTPP

(1)

100 base acre farm, 

plant 20 acres F&V

(2)

50 base acre and 50 non-base 

acre farm, plant 40 acres F&V

(3)

50 base acre and 50 non-base 

acre farm, plant 60 acres F&V

(1) Farm with F&V planting 

history 

DCP on the 20 acres None DCP on the 10 acres (planted 

acres minus non-base acres)

(2) Producer with F&V 

planting history on 10 base 

acres 

Minimum of: (1) entire 

DCP; or (2) market value 

of F&V planted plus DCP 

on 10 acres (planted acres 

in excess of history)

None DCP on the 10 acres (planted 

acres minus nonbase acres, up to 

producer’s F&V history)

(3) Farm or producer with no 

F&V planting history

Minimum of: (1) entire 

DCP; or (2) the market 

value of F&V planted plus 

DCP on 20 acres

None Minimum of: (1) entire DCP; or (2) 

market value of F&V planted plus 

DCP on 10 base acres (planted 

acres minus nonbase acres)

With PTPP

(4) Farm with no F&V planting 

history

DCP on the 20 base 

acres reduced for PTPP 

participation

None DCP on the 10 base acres reduced 

for PTPP participation (planted 

acres minus nonbase acres)

(5) Producer with F&V planting 

history on 10 base acres

DCP on the 20 base 

acres reduced for PTPP 

participation

None DCP on the 10 base acres reduced 

for PTPP participation (planted 

acres minus nonbase acres)

PTPP=Planting Transferability Pilot Program.

F&V=Fruits and vegetables.

DCP=Direct and Countercyclical Program.

Source: USDA, Economic Research Service, based on FSA Handbook: Direct and Counter-Cyclical Program and Average Crop Revenue 

Election for 2009 and Subsequent Crop Years, 2010.
23

Fruit and Vegetable Planting Restrictions: Analyzing the Processing Cucumber Market / VGS-342-02

Economic Research Service/USDA

tables produced. The reduction is capped at the value of all DCP or ACRE 

payments for the farm, $12,700 in the case of 10 planted cucumber acres 

(column 3) and $20,000 in the case of 20 planted cucumber acres (column 

4). The $12,700 loss is calculated as the $12,500 market value of cucumbers 

plus the $200 DCP payment; the $20,000 loss is the entire DCP payment. 

Meanwhile, column 5 shows the payment reduction under PTPP at $400. 

With the much smaller loss in Government payments, the grower is more 

likely to make a decision based on market prices and the costs of planting 

alternative processing vegetables. The situation for the farm with a history of 

planting fruits and vegetables is unchanged. Their payments are reduced by 

$400, a relatively small amount, with or without PTPP.

Appendix table 2

Farm program payment scenarios: 

Trade-offs between corn and pickling cucumbers

Without PTPP With PTPP

With history Without history No history

(1) (2) (3) (4) (5)

1. Cropland acres 1,000 1,000 1,000 1,000 1,000

2. Corn base acres 1,000 1,000 1,000 1,000 980

3. Corn acres 1,000 980 990 980 980

4. Cucumber acres 0 20 10 20 20

5. Direct payment ($) 20,000 19,600 7300 0 19,600

6. Corn market value ($) 525,000 514,500 519,750 514,500 514,500

7. Cucumber market value ($) 0 25,000 12,500 25,000 25,000

8. Total crop value ($ from 6+7) 525,000 539,500 532,250 539,500 539,500

9. Total revenue ($ from 5+8) 545,000 559,100 539,550 539,500 559,100

10. Payment reduction 0 400 12,700 20,000 400

Notes: We assume a $20 direct payment per corn base acre and no countercyclical or ACRE payment, 

a $3.50 price per bushel of corn with a yield of 150 bushels per acre, and a $250 price per ton received 

by growers of pickling cucumbers with a yield of 5 tons per acre. A farm would have a history if it planted 

fruits and vegetables on base acreage in any year from 1998 to 2001. This does not mean they are currently producing fruits or vegetables, as is the case in column 1. Column 2 assumes a fruit or vegetable 

history of 20 acres.

Source: USDA, Economic Research Service, based on FSA Handbook: Direct and Counter-Cyclical 

Program and Average Crop Revenue Election for 2009 and Subsequent Crop Years, 2010.