Farm and Food Support Under USDA’s Section 32 Account
Changes from August 5, 2025 to September 14, 2026
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Congress created a mandatorypermanent appropriation in 1935—the Funds for Strengthening Markets, Income, and Supply (Section 32 of the act of August 24, 1935; 7 U.S.C. §612c). TheThis appropriations account supports producers of agricultural commodities that are not supported by other farm support programs, such as the Commodity Credit Corporation. Such commodities include primarily fruits, vegetables, meats, poultry, and fish. Ongoing issues(primarily fruits, vegetables, meats, poultry, and fish) not supported by other U.S. Department of Agriculture (USDA) programs. Issues for Congress include the scale of funding and how to direct support to various usesdirecting support.
Known as Section 32, the fundaccount has three primary purposes identified in lawstatutory purposes: Clause 1—to encourage the export of agricultural products; Clause 2—to encourage the domestic consumption of farm products by diverting surpluses and increasing their use; and Clause 3—to reestablish farmers' purchasing power by making payments to farmers.
A permanent appropriation ofThe account receives 30% of customs receipts (tariffs) on all imports from the prior calendar year. It is allocated in three primary wayson all imports from the prior calendar year funds the Section 32 account. Following imposition of higher tariffs in 2018, this amount has more than doubled to exceed about $25 billion as of FY2026, but that has not provided more funding for the U.S. Department of Agriculture's (USDA's) discretionary use.
Three allocations flow from the permanent appropriation: a transfer to the Department of Commerce of 30% of customs receipts from fishery products; a statutory amount retained by USDA to support farmers and domestic food assistance programs that increases with inflation (known as "reserved spending authority"); and a transfer of the remainder to the Food and Nutrition Service (FNSAdministration (FNA) for the child nutrition programs. The Section 32 transfer to FNS is the largest portion (blue portions of Figure 1 and top of Table 1) and partially funds the mandatory amount needed to pay for the child nutrition programs, with other Treasury funds.
Section 32 Commodity Procurement
Commodities procured with Section 32 funds may be categorized as either entitlement or contingency (both are shown in the gray boxes in Figure 1 and Table 1 below the line). USDA's entitlement purchases are mandated by various laws and then planned for what is delivered. Various nutrition acts specify an amount that is to be delivered in kind to schools and other entities. Based on local preferences, organizations and USDA develop a purchase plan. USDA's Agricultural Marketing Service (AMS) issues bid specifications, generally for processed products, for deliveries to specific locations.
Contingency purchases (also known as emergency surplus removals) are possible with USDA's discretion in Clause 2 to increase demand for surplus commodities when farm prices are low. Recipients of bonus commodities include schools, child care centers, and food banks.
|
Description |
Authority |
FY2023 Actual |
FY2024 Actual |
FY2025 Estimate |
FY2026 Estimate |
|||||||||||||||||||||||||||||||||||||
|
Permanent appropriation |
7 U.S.C. 612c |
+27,123 |
+30,801 |
+24,447 |
+25,209 |
|||||||||||||||||||||||||||||||||||||
|
+ Prior year appropriation carried in |
— |
+16 |
+18 |
+1 |
na |
|||||||||||||||||||||||||||||||||||||
|
- Transfer to Department of Commerce |
15 U.S.C. 713c-3 |
-363 |
-377 |
-345 |
-414 |
|||||||||||||||||||||||||||||||||||||
|
- Reserved spending authority |
7 U.S.C. 612c-6 (b)(2)(A) |
-1,561 |
-1,657 |
-1,709 |
-1,755 |
|||||||||||||||||||||||||||||||||||||
|
- Transfer to Food and Nutrition Service |
7 U.S.C. 612c-6 (b)(1) |
-25,215 |
-28,785 |
-22,393 |
-23,040 Commodities procured with the reserved spending authority are categorized as either entitlement or contingency purchases. USDA's entitlement purchases are required in laws that specify amounts of food to be delivered in kind to schools and other entities. USDA and the entities develop purchase plans based on local preferences. The Agricultural Marketing Service (AMS) solicits bids for the delivery of specific products to identified locations. USDA has discretion to choose commodities and amounts for contingency purchases, also known as "emergency surplus removal," to increase demand for farm products. Recipients include schools, childcare centers, and food banks, which may refer to surplus removal as "bonus commodities." Issues for CongressTariffs and the Amount Transferred to FNASection 32 appropriations ultimately come from a general source of government revenue, and their uses are directed by law. Budget rules may limit options for changing the allocations of tariff receipts. The USDA budget request estimates that Section 32 will receive nearly $82 billion in FY2027 and reflects about $270 billion of tariffs collected during calendar year 2025. Figure 1. Flow of Funds in USDA's Section 32 Account Budget projections for FY2027
|
Source: CRS using USDA, Agricultural Marketing Service, FY2027 Congressional Budget Justification; Office of Management and Budget, FY2027 Budget Appendix; and Congressional Budget Office, Child Nutrition Programs Baseline Projection, February 2026. This estimate precedes the Supreme Court decision that invalidated the collection of certain tariffs (CRS Legal Sidebar LSB11398, Supreme Court Rules Against Tariffs Imposed Under the International Emergency Economic Powers Act (IEEPA)). Subsequent refunds of those tariffs may reduce the amount transferred to Section 32. Through August 31, 2026, the Treasury Department has refunded $125 billion, most of which may be from 2025 (CRS In Focus IF13150, Potential Refunds of Tariffs Imposed Under the International Emergency Economic Powers Act (IEEPA)). The effect on the final amount for Section 32 remains to be determined. The Congressional Budget Office estimates that the cost of the child nutrition programs in FY2027 is $37 billion. A transfer from Section 32 that exceeds the child nutrition program's costs would not create extra spending authority. The child nutrition programs may not obligate more than authorized by law. Extra transfers may remain in the account, unobligated, for five years before returning to the Treasury (Office of Management and Budget, Circular No. A-11). If Section 32 transfers are less than the cost, additional transfers from the Treasury meet the obligations. surplus removal has increased over the past decade from less than $500 million annually to nearly $1 billion as the reserved spending authority rises with inflation and other directives remain steady. Congress could consider whether to amend the allocation of the reserved spending authority and the amount available for emergency surplus removal. In 2025, USDA purchased $866 million in emergency surplus removal commodities using Section 32, including fruit (apples, apricots, berries, cherries, dates, figs, grapefruit, grapes, mandarins, nectarines, oranges, peaches, pears, plums), vegetables (asparagus, beans, chickpeas, lentils, spinach, tomatoes), dried fruits (prunes, raisins), nuts (hazelnuts, pecans, pistachios), and proteins (chicken, catfish, Atlantic groundfish, Alaska pollock, and shrimp). Limitations on Direct Payments from Section 32Appropriations acts since FY2018 have limited the use of Clause 3 (direct payments) to $350 million from prior year carryover. USDA has used this rarely, given the availability of disaster programs, crop insurance, and ad hoc assistance. Table 1. USDA's Section 32 Account: Funding and UsesDollars in millions
|
Description
|
Authority
|
FY2024 Actual
|
FY2025 Actual
|
FY2026 Estimate
|
FY2027 Estimate
|
Permanent appropriation
|
7 U.S.C. §612c
|
+30,805
|
+24,448
|
+25,209
|
+81,847
|
- Transfer to Department of Commerce
|
15 U.S.C. §713c-3
|
-377
|
-345
|
-414
|
-414
|
- Reserved spending authority
|
7 U.S.C. §612c-6(b)(2)(A)
|
-1,657
|
-1,709
|
-1,755
|
-1,804
|
- Transfer to Food and Nutrition Service
|
7 U.S.C. §612c-6(b)(1)
|
-28,771
|
-22,393
|
-23,041
|
-79,629
|
Detail for reserved spending authority
|
Reserved spending authority
|
7 U.S.C. §612c-6(b)(2)(A)
|
+1,657
|
+1,709
|
+1,755 +1,804 |
|
Detail for reserved spending authority |
||||||||||||||||||||||||||||||||||||||||||
|
Reserved spending authority |
7 U.S.C. 612c-6 (b)(2)(A) |
+1,561 |
+1,657 |
+1,709 |
+1,755 |
|||||||||||||||||||||||||||||||||||||
|
+ Unobligated balance brought forward |
7 U.S.C. §612c |
+ |
+ |
+ |
+ |
|||||||||||||||||||||||||||||||||||||
|
+ Recoveries |
— |
+ |
+34 |
+0 |
+49 |
|||||||||||||||||||||||||||||||||||||
|
- Sequestration |
2 U.S.C. §901a(6) |
- |
|
-86 |
-88 |
|||||||||||||||||||||||||||||||||||||
|
- Rescissions |
— |
-16 |
0 |
-49 |
0 |
|||||||||||||||||||||||||||||||||||||
|
- Administrative expenses |
7 U.S.C. 601 et seq. |
-54 |
-57 |
-59 |
-65 |
|||||||||||||||||||||||||||||||||||||
|
- Fresh Fruit and Vegetable Program |
42 U.S.C. §1769a(i) |
- |
- |
- |
- |
|||||||||||||||||||||||||||||||||||||
|
- Entitlement purchases |
7 U.S.C. §612c-4, with 42 U.S.C. §1755 and 42 U.S.C. §1762a |
-485 |
-485 |
-485 |
-485 |
|||||||||||||||||||||||||||||||||||||
|
- |
7 U.S.C. |
- |
- |
- |
- | |||||||||||||||||||||||||||||||||||||
- Emergency surplus removal (contingency) - Administrative expenses |
7 U.S.C. |
- |
- |
- |
- |
|||||||||||||||||||||||||||||||||||||
|
- Disaster relief foods |
7 U.S.C. §7502 (c) |
|
+0 |
-5 |
-5 |
|||||||||||||||||||||||||||||||||||||
|
- Removal of defective commodities |
7 U.S.C. §612c note |
+0 |
- |
- |
-3 |
|||||||||||||||||||||||||||||||||||||
|
= Unobligated balance carried forward |
7 U.S.C. §612c |
229 |
302 |
0 |
0 |
Source: CRS, using USDA Congressional Budget Justification for Agricultural Marketing Service (AMS); and OMB Budget Appendix for USDA.
Notes: na = not available. Itemization of amounts varies between the USDA and OMB sources; amounts here are organized to reflect congressional policy issues to show the flow of funds. Entitlement purchases are specific amounts of foods required to be delivered to schools and entities. The amount of emergency surplus removal is not identified explicitly in the sources and is computed here from total commodity purchases. The budget request estimates zero carry forward in FY2025 and FY2026, leading to a particularly high estimate of contingency purchases in FY2025 and an estimate in FY2026 with less influence from carry forward. Amounts may not add due to rounding.
Limitations and Uses of Section 32
Historically, USDA had considerable discretion with Section 32. Congress reduced that discretion in the 2008 farm bill, which established the reserved spending authority to limit USDA spending (P.L. 110-246, §14222). Various farm bills also have established provisions with minimum purchase requirements of fruits, vegetables, and other specialty crops.
Appropriations acts from FY2012-FY2017 prohibited using Clause 3 authority to make direct payments to farmers for emergencies or disasters. Since FY2018, appropriations acts have limited up to $350 million of carryover may be used for Clause 3 payments, though this exception has been used minimally. The Clause 3 limit has existed at the same time that permanent disaster programs, ad hoc disaster assistance, and federal crop insurance have grown.
Section 32 pays for some administrative expenses and oversight of federal marketing orders. Section 32 also provides a limited amount of disaster relief foods during natural disasters, and may pay to remove a defective commodity that is found to pose a health risk after being distributed by USDA. Unobligated balances less than $500 million may be carried forward to future fiscal years.
USDA Procurement Beyond Section 32
In recent years, AMS has procured more than $4 billion of food for domestic uses, including the Section 32 purchases that are identified in Figure 1 and Table 1. Some of these other purchases are for FNS from the child nutrition appropriation and fulfil other entitlement requirements in the National School Lunch Act and other Child Nutrition Programs statutes (CRS Report R48141, Trends in USDA Procurement of U.S. Food and Agricultural Products).
Notes: Itemization varies between sources. Entitlement purchases include food required to be delivered to entities. The requirement in 7 U.S.C. §612c-4 to purchase $200 million of fruits, vegetables, and other specialty food crops is met by entitlement purchases. The requirement in 7 U.S.C. §612c-5 to purchase $206 million of fruits, vegetables, and nuts may be met by other purchases, including emergency surplus removal. The amount of emergency surplus removal is not consistently shown in sources over time; it is computed here to result in the unobligated balance carried forward given other known amounts. na = not available. Amounts may not add to totals because of rounding.