Specialty Crop Provisions in the 2014 Farm Bill (P.L. 113-79)
Released: 2014-07-10T00:00:00

Introduction

Specialty crops, defined as "fruits and vegetables, tree nuts, dried fruits, and horticulture and nursery crops (including floriculture)," comprise a major part of U.S. agriculture. In 2012, the value of farm-level specialty crop production totaled nearly $60 billion, representing about one-fourth of the value of U.S. crop production ( Table 1 ). Despite their relatively large share of crop receipts, specialty crops occupy only about 3% of U.S. harvested cropland acres. The U.S. Department of Agriculture (USDA) reports that retail sales of fresh and processed fruits and vegetables for at-home consumption total nearly $100 billion annually. Exports of U.S. specialty crops totaled about $14 billion in 2013, or about 10% of total U.S. agricultural exports.

In 2012, about 244,000 farming operations grew more than 350 types of fruit, vegetable, tree nut, flower, nursery, and other horticultural crops in addition to the major bulk commodity crops. Specialty crop production is focused in California, Florida, Washington, Oregon, North Dakota and Michigan; however, every state has some commercial specialty crop production within its borders. USDA data illustrate the nationwide distribution of areas producing vegetables ( Figure 1 ), fruits and tree nuts ( Figure 2 ), and floriculture crops ( Figure 3 ).

A majority of specialty crop producers are considered specialized, which means that they receive at least half of their gross value of production from the sale of vegetables, fruits, tree nuts or other horticultural crops. These specialized farms rely mostly on specialty crop production for their farm income, even though they may be also engaged in other forms of agricultural production. USDA reports that about 50% of all vegetable growers and 80% of fruit and tree nut growers are considered specialized; however, specialized farms account for 90-95% of the total value of U.S. specialty crop production. Conditions may vary considerably by major production region. Specialized fruit and vegetable farms are more concentrated in the Western United States, including California, Washington, and Oregon. Some farms also participate in the major commodity support programs, but these tend to be more concentrated in the Midwestern states.

For some specialty crop producers, obtaining organic certification to sell their products as "organic" represents a viable business strategy. Organic agriculture accounts for a small but growing share of the U.S. farming sector. USDA reports that farm sales from organic fruit and vegetable operations total more than $1 billion annually, or about 4% of all farm-level fruit and vegetable sales in the United States. (Organic production includes certified organic fruits, vegetables, and tree nuts, as well as meat and dairy foods, and organic commodity crops.)

Legislative Support for U.S. Specialty Crops

Comparison with More Traditional Types of Farm Bill Support

Support for U.S. specialty crops differs in important ways from the types of traditional farm bill support for U.S. commodity crops, such as corn, soybeans, grains and other farm commodities.

Farm Bill Support for Specialty Crops is Relatively Recent

Farm bill programs supporting commodity crop production have been in place since the 1930s, and were intended to address Depression-era market conditions, address soil erosion and related production concerns associated with the Dust Bowl, and implement farmland conservation reforms. In contrast, farm bill support for specialty crops is relatively recent.

During the past few farm bill debates, specialty crop producers argued that their sectors should occupy a larger role in farm bill policy discussions and that some of the benefits supporting major commodity producers should be extended to specialty crop and organic producers, in order to create "a broader, more equitable farm bill." Several programs addressing specialty crops specifically were initially established in the Specialty Crops Competitiveness Act of 2004 ( P.L. 108-465 ), which was enacted outside a farm bill year. Many of the programs in the 2004 act were further expanded and reauthorized in the 2008 farm bill (Food, Conservation, and Energy Act of 2008, P.L. 110-246 ). The 2008 farm bill was also the first to include a separate farm bill title dedicated to specialty crops and organic agriculture (Title X). Some programs had also been established in the 2002 farm bill (Farm Security and Rural Investment Act of 2002, P.L. 107-171 ), often as pilot initiatives that have since become established programs. The 2014 farm bill (Agricultural Act of 2014, P.L. 113-79 ) reauthorized and expanded many of the existing farm bill provisions supporting farming operations in the specialty crop and certified organic sectors.

Farm Bill Support for Specialty Crops is Mostly Indirect

Although programs specifically supporting specialty crops are now part of the omnibus farm bill, the scope of that support differs from that traditionally employed to support commodity crops. Specifically, individual specialty crop producers do not directly benefit from the same types of federal commodity price and income support programs that benefit producers of commodity crops. Specialty crops are ineligible for these types of direct benefits.

Unlike programs supporting the production of specific commodity crops, farm bill programs tailored to support specialty crops provide benefits that accrue to all specialty crop producers and generally do not accrue to individual produce growers directly. These types of programs include marketing and promotion programs, crop insurance and disaster assistance, plant pest and disease protections, trade assistance, and research and extension services, among other types of indirect support. The industry also benefits from fruit and vegetable purchases under various food and nutrition programs. In addition, specialty crop producers are also eligible for other types of USDA support that is generally available to all U.S. crop and livestock producers.

Specialty Crops Account for Small Share of Total Farm Bill Spending

Despite the wide range of program support for specialty crops, federal program spending for specialty crops remains a small share of total farm bill spending and remains lower than spending for commodity crops, even when considering both mandatory and discretionary funding levels. Precise estimates of total mandatory and discretionary sources of funding are difficult to measure, given that support for specialty crops is spread across a wide range of USDA programs and not within a price and income support program such as that available for most of the major commodity crops. Following the 2008 farm bill, an average of approximately $676 million annually (FY2008-FY2012) in mandatory program funding was authorized to be spent on specialty crops and organic agriculture, mostly through government purchases of fruits and vegetables for domestic nutrition and feeding programs ( Table 2 ). The 2014 farm bill reauthorized many of the existing farm bill provisions and also increased spending for some programs supporting specialty crops. Total mandatory spending for specialty crops and organic agriculture is expected to be higher and average $773 million annually (FY2014-FY2018). The 2014 farm bill also authorized another roughly $302 million in average annual appropriations across certain programs. See also Table 2 .

Although the 2014 farm bill provided for an increase above current funding levels, total mandatory spending for specialty crops and organic agriculture will still account for a small share of estimated total farm bill spending and will remain well below spending levels for commodity crops. Mandatory spending for the major commodity crops is expected to average about $4.7 billion per year under the 2014 farm bill (FY2014-FY2018), mostly through direct price and income support. This does not reflect additional higher spending for crop insurance.

2014 Farm Bill (P.L. 113-79)

The 2014 farm bill (Agricultural Act of 2014, P.L. 113-79 ) reauthorized and expanded many of the existing farm bill provisions supporting the specialty crop and certified organic sectors, and also provided for additional program funding in some cases.

Many provisions in Title X ("Horticulture") fall into the categories of marketing and promotion; organic certification; data and information collection; pest and disease control; food safety and quality standards; and local foods. Title X also includes provisions benefitting certified organic agriculture producers such as USDA's National Organic Program, certification cost sharing, development of crop insurance mechanisms for organic producers, and various data initiatives. However, farm bill provisions supporting specialty crops and organic agriculture are not limited to the Horticulture title, but are contained within several other titles of the farm bill including the trade, nutrition, research, rural development, crop insurance titles, conservation, and the miscellaneous titles (see text box on next page).

Table 3 at the end of this report provides a summary and side-by-side of selected provisions supporting specialty crop and certified organic producers in the 2014 farm bill ( P.L. 113-79 ), comparing the final enacted provisions with the House-passed ( H.R. 3102 ) and Senate-passed ( S. 954 ) bills and prior law and/or policy.

Among the key programs supporting specialty crop producers in Title X are USDA's Specialty Crop Block Grant Program and its Plant Pest and Disease Prevention Programs; data collection and Market New s compilations; and also expanded support for USDA's Farmer's Market and Local Food Promotion Program and related data collection efforts; among other programs. Some key programs in Title X supporting certified organic producers are: continued support for USDA's National Organic Program (NOP); Organic Production and Market Data Initiatives (ODI); and the National Organic Certification Cost Share Program (NOCCSP). The 2014 farm bill also gives USDA authority to consider an application for a research and promotion order (or "checkoff" program) for the organic sector. Title X also included other provisions that provide for specific exemptions from certain regulatory requirements under some laws, such as the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and the Endangered Species Act (ESA).

The Congressional Budget Office (CBO) estimates that mandatory spending for specialty crops and organic agriculture under Title X would increase $338 million over the next five years (FY2014-FY2018). Increased funding for several key programs benefitting specialty crop producers in Title X include the Specialty Crop Block Grant Program, plant pest and disease programs, and programs supporting farmers' markets and local foods, among other programs.

Provisions supporting the specialty crop and certified organic sectors are also contained within other titles of the farm bill. Several farm bill titles also include provisions that expand opportunities for local food systems and also beginning farmers and ranchers, which oftentimes include both specialty crop and certified organic producers.

Similar to that for specialty crops, provisions supporting certified organic production are not limited to the Horticulture title, but are contained within several other titles of the farm bill.

A number of programs benefitting specialty crop and organic production are contained in the farm bill's Research title (Title VII). These include research programs such as the Specialty Crop Research Initiative (SCRI), the Organic Agriculture Research and Extension Initiative (OREI), and the Organic Transitions Program (ORG) under the Integrated Research, Education, and Extension Competitive Grants Program. The title also provides for an Office of Pest Management Policy as well as a Specialty Crops Subcommittee to implement an Emergency Citrus Disease Research and Extension Program, Specialty Crops Committee. The bill also provides for continued support of USDA's pollinator protection efforts, as an area of "High-Priority Research and Extension."

Perhaps most importantly in terms of overall annual spending, the nutrition title (Title IV) provides support for the specialty crop industry through a series of programs that provide for fruit and vegetable purchases under USDA's domestic nutrition assistance programs. Provisions supporting specialty crop producers within the farm bill's Nutrition title (Title IV) include the Fresh Fruit and Vegetable (Snack) Program and related pilot programs regarding procurement of unprocessed and also canned, frozen or dried fruits and nuts; Section 32 purchases for fruits and vegetables under the Nutrition title; Senior Farmers' Market Nutrition Program; and other expanded or new programs associated with the Supplemental Nutrition Assistance Program (SNAP) or other domestic feeding programs. The 2014 farm bill also created the Food Insecurity Nutrition Incentive program to establish projects that incentivize SNAP participants to buy fruits and vegetables.

In the bill's Trade title (Title III), two programs—Technical Assistance for Specialty Crops (TASC) and the Market Access Program (MAP)—support specialty crop and certified organic producers, as well as other U.S. crop and livestock producers. The Value-Added Producer Grant Program, in the bill's Rural Development title (Title VI), also supports specialty crop and organic producers, among other U.S. crop and livestock producers.

In the miscellaneous title of the 2014 farm bill, the Noninsured Crop Assistance Program (NAP) was reauthorized, and included a provision to cover producers with fruit crop losses in 2012 in counties declared a disaster due to freeze or frost. Also, as part of the farm bill's Supplemental Disaster Assistance Programs (Title I), two programs were reauthorized—the Tree Assistance Program (TAP) and the Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish Program (ELAP), which might provide benefit to some specialty crop producers. The farm bill also provides for USDA to continue to look into crop insurance products that might better benefit U.S. specialty crop and certified organic producers, as part of the 2014 farm bill's Crop Insurance and Disaster Assistance Programs (Title XI).

A range of programs in the farm bill's Conservation title (Title II) also support specialty crop and certified organic producers, along with all U.S. crop and livestock producers, such as the Environmental Quality Incentives Program (EQIP), the Conservation Stewardship Program (CSP), and the Conservation Reserve Program (CRP). In particular, EQIP provides support for organic producers seeking to transition to organic, as part of the EQIP Organic Initiative.

For more detailed information on some of the programs listed here, see CRS Report R42771, Fruits, Vegetables, and Other Specialty Crops: Selected Farm Bill and Federal Programs , and also CRS Report R43332, SNAP and Related Nutrition Provisions of the 2014 Farm Bill (P.L. 113-79) . See also the section titled "Provisions for Specialty Crop Producers" in CRS Report R43494, Crop Insurance Provisions in the 2014 Farm Bill (P.L. 113-79) .

Programs described in this report supporting specialty crops and organic agriculture are administered by various USDA agencies, including the Agricultural Marketing Service (AMS), Animal and Plant Health Inspection Service (APHIS), Food and Nutrition Service (FNS), Risk Management Agency (RMA), Farm Service Agency (FSA), National Institute of Food and Agriculture (NIFA), Agricultural Research Service (ARS), Natural Resources Conservation Service (NRCS), Foreign Agricultural Service (FAS), and Rural Development (RD).

Aside from USDA, other federal agencies play a role in the specialty crop industry. These include agencies that oversee food safety requirements for fruits, vegetables, and other specialty crops, such as the Food and Drug Administration (FDA) and the Environmental Protection Agency (EPA), and agencies that oversee global trade, such as the Department of Commerce and the U.S. International Trade Commission, among others. These programs are generally not under the jurisdiction of the House and Senate Agriculture Committees and so are not part of the periodic omnibus farm bill, and therefore not covered in this report. For more information on these programs, see CRS Report R42771, Fruits, Vegetables, and Other Specialty Crops: Selected Farm Bill and Federal Programs .