Order Code IB10098
CRS Issue Brief for Congress
Received through the CRS Web
Fruits and Vegetables:
Issues for Congress
Updated April 15, 2002
Brenda Branaman
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

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CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Introduction
Federal Activities and Programs
Emergency Assistance
Marketing Services
Federal Marketing Orders
Perishable Agricultural Commodities Act (PACA)
Market Access Program (MAP)
Food Safety
Domestically Produced Food
Imported Food
FY2002 Appropriations
Research
Insect Pests and Diseases
Alternatives to Methyl Bromide
Animal and Plant Health Inspection Service (APHIS)
Appropriations FY2002
Issues
Farm Bill Issues
Flexibility Restriction
Industry Assistance
House Action
Senate Action
Trade Issues
Phytosanitary Issues
Dumping
Chinese Apple Juice Concentrate
Mexican and Chilean Table Grapes
Foreign Agricultural Workers (H-2A Program)

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Fruits and Vegetables: Issues for Congress
SUMMARY
Although fruits and vegetables are not
Senate bill has additional nutrition provisions
among crops normally receiving farm
which would expand government support for
subsidies, there are a number of federal activi-
the consumption of fruits and vegetables
ties and programs that provide support to fruit
through food assistance programs; and pro-
and vegetable growers. These include crop
vides market loss payments to apple growers.
disaster assistance and, in recent years, market
loss assistance payments. The government
FY2002 agricultural appropriations
also supports these crops through federal
legislation(P.L. 107-76/H.R. 2330) was signed
marketing orders, the Market Access Program
into law on November 28, 2001. It included
(MAP), food safety activities, research pro-
$75 million in market loss assistance for apple
grams to improve crops and to help develop
growers; $344.7 million for FDA food safety
safe pesticides (e.g. alternatives to methyl
activities and $352 million for FDA inspections
bromide), and research and inspection activi-
and import monitoring. It also increased
ties to prevent foreign pests and disease from
funding for research on emerging diseases and
entering the country and to manage and eradi-
pests of plants and invasive insect species that
cate them if they are introduced. The primary
affect fruits and vegetables; and provided
law that exclusively serves the produce indus-
$2,498,000 for the Methyl Bromide Transition
try is the Perishable Agricultural Commodities
Program. Funding for APHIS programs that
Act of 1930 (PACA).
benefit fruits and vegetables was increased by
$55.7 million.
Farm bills also contain provisions that
affect this industry. The House version of the
A supplemental authorization act for
next farm bill (H.R. 2646), passed on October
agriculture (P.L. 107-25/H.R. 2213) became
5, 2001, and the Senate version (text of S.
law on August 13, 2001. Out of a total of
1731 as amended in lieu of the House
$5.5 billion in emergency direct payments to
language), passed on February 13. Both
farmers, the law provided $159.4 million to
versions contain provisions that would main-
specialty crops, including fruits and vegetables,
tain the planting flexibility restriction on fruits
during FY2001.
and vegetables. These bills also increase the
authorization for the Market Access Program
Several other bills that have been pro-
(MAP), authorize assistance to commercial
posed but not passed in the first session of
tree growers affected by natural disasters,
the107th Congress relate to issues of foreign
increase government purchases of surplus
agricultural workers’ immigrant status and
commodities, continue the Senior Farmers’
wages.
Market Nutrition program, and require coun-
try of origin labeling at the retail level for fruits
The alleged dumping of foreign fruit and
and vegetables. The House bill, in addition,
vegetable commodities into the U.S. market is
has provisions for a caneberries marketing
an issue of concern to the produce industry,
order and research to improve fruit and vege-
although no legislation has been proposed.
table harvesting, and provides assistance to
Anti-dumping petitions, however, were suc-
remove sanitary and phytosanitary trade barri-
cessfully used by some growers, but other
ers faced by specialty crop producers. The
growers were unsuccessful.
Congressional Research Service ˜ The Library of Congress

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MOST RECENT DEVELOPMENTS
The Senate version of the omnibus farm bill was passed on February 13, 2001, the
Agriculture, Conservation, and Rural Enhancement Act of 2002 (H.R. 2646). The Senate
bill inserted the text of S. 1731, the version that was approved by the Senate Agriculture,
Nutrition and Forestry Committee, and a number of floor amendments were adopted before
final passage of the bill. The House passed its version, the Farm Security Act 2001 (H.R.
2646) on October 5, 2001. Both bills contain provisions affecting the fruit and vegetable
industry. The differences between the House and Senate bills are currently being discussed
in conference. The FY2002 agriculture appropriations bill (H.R. 2330) was signed into law
(P.L. 107-76) on November 23, 2001.
BACKGROUND AND ANALYSIS
Introduction
Fruits, vegetables, and tree nuts earned U.S. farmers $28.5 billion in 2000, about 13%
of all U.S. farm cash receipts. In 2000, per capita U.S. consumption of fruits and vegetables
was 777 pounds, of which 307.1 pounds were fruits and tree nuts, and 469.9 pounds were
vegetables and melons. Per capita consumption of fruits and vegetables grew by 12%
between 1987 and 1997 for a variety of reasons: increased health concerns of Americans,
improved quality, increased variety in supermarket produce departments (including packaged
salads and fresh-cut vegetables and fruits), greater availability through world trade, and
increased food service sales of fresh fruits and vegetables.
U.S. fruit, vegetable, and tree nut exports in 2000 totaled $7.3 billion, or 14% of the
total value of that year’s agricultural exports ($51.6 billion). Major produce exports were
almonds, frozen potato fries, apples, grapes, and orange juice. In 2000 the top markets for
these exports were Canada ($2.3 billion), Japan ($1.4 billion), the European Union ($1.1
billion), and Mexico ($639 million). In 2000 exports to Canada, Japan, and Mexico
increased, and sales to the European Union, the third largest market, remained strong.
The value of produce imports ($9.0 billion) exceeded produce exports by $1.7 billion
in 2000. Major U.S. produce imports were bananas and plantains, tomatoes, grapes, cashews,
and peppers. The top suppliers of imported fruits and vegetables were Mexico ($2.6 billion),
South American countries ($1.8 billion), Central American countries ($1.1 billion), Canada
($1.1 billion), and the European Union ($803 million). Of the total fruits and vegetables
(fresh and processed) consumed in 2000 in the United States, 17.4% were imported. About
38% of fresh fruits consumed and 11% of fresh vegetables consumed that year were imported
products.
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Federal Activities and Programs
Emergency Assistance
Congress has provided crop disaster assistance to growers of all crops, including fruits
and vegetables and other horticultural crops, for many years, compensating them for damage
from droughts, hurricanes and floods, insects, and plant diseases. In recent years, Congress
also has provided market loss payments, a new type of emergency assistance to compensate
producers for market losses caused by low commodity prices. Market loss assistance and
disaster payments are funded through the borrowing authority of USDA’s Commodity Credit
Corporation (CCC) and administered by USDA’s Farm Service Agency. Most disaster
assistance and market loss payments have gone for grains, cotton, rice, oilseeds, and dairy,
or so-called program crops. According to data from the Farm Service Agency for 1998
specialty crops got about 20% of a total of $1.9 billion in disaster assistance paid to farmers
for that year.
A law approved by Congress (P.L. 107-25/H.R. 2213) provided $5.5 billion in
emergency direct payments to farmers. The law provided $159.4 million to specialty crops,
including fruits and vegetables, during FY2001. Of the specialty crop total, $26 million was
distributed as “base state grants” with each state getting $500,000 and Puerto Rico getting
$1 million; the remaining $133.4 million was distributed in proportion to the value of
specialty crops in each state (but not Puerto Rico), as specified in the new law. In addition
to the $159.4 million, the law provided $10 million for processing, transportation and
distribution of commodities to recipient agencies.1
The FY2002 agricultural appropriations (P.L. 107-76/H.R. 2330) provided $75 million
in market loss assistance for apple growers, which was less than the $150 million approved
by the House but more than the Senate bill (S. 1191) which contained no such funding. For
further information on agricultural emergency assistance see CRS Report RL31095,
Emergency Spending for Agriculture: A Brief History of Congressional Action, FY1989-
2001.
Marketing Services
The Agricultural Marketing Service (AMS) administers several services for the produce
industry. These include Federal Marketing Orders, and programs and activities (including
inspection services) authorized by the Perishable Agricultural Commodities Act of 1930
(PACA).
1 The Senate version of this legislation (S. 1246) would have provided a total of $7.5 billion ($5.5
billion in FY2001 and $2 billion in FY2002) in farm aid, with $220 million for specialty crops
experiencing low prices in 2000 and 2001 crop years. It also would have required that $55 million of
these funds be used to purchase agricultural commodities (including fruits and vegetables) for
distribution in the School Lunch Program, and provided $20 million to cover commodity transportation
and distribution costs for these commodity purchases. The Senate bill also would have provided $150
million to apple producers for market losses during the 2000 crop year. The Senate bill was defeated
on the Senate floor and the House bill (H.R. 2213) was passed by the Senate in its stead on August
3.
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Federal Marketing Orders. Federal marketing orders give authority to committees
of growers and handlers to make regulations for the marketing of specified fruits, vegetables,
tree nuts, and specialty crops. In October 2001 there were 35 federal marketing orders in
effect. Local administrative committees decide if a marketing order in a specific geographical
area will have regulations requiring quality controls, quantity controls, standardized packages
and containers, research and promotion, and marketing information. Any regulations that are
adopted are binding and must be approved by two-thirds of the growers and handlers and the
Secretary of Agriculture. The activities of marketing orders are financed by assessment fees
collected from handlers. AMS makes sure the marketing orders operate legally and in the
public interest. The cost to the federal government of monitoring these marketing orders in
FY2000 was $7.5 million.
Perishable Agricultural Commodities Act (PACA). The Perishable Agricultural
Commodities Act of 1930 promotes fair trading practices in the fruit and vegetables industry,
ensures that sellers are paid even if the buyers become bankrupt, and provides procedures for
resolving disputes outside the civil court system. Under this system a trust is established
consisting of a buyer’s produce-related assets. If a buyer becomes bankrupt, produce
suppliers that have preserved their trust rights can recover money owed to them before trust
assets are made available to general creditors. PACA activities in most years are funded by
license and complaint filling fees (about $7 million in FY2000), rather then by federal
appropriations. However, after USDA proposed an increase in the license fee in early 2000,
AMS received a one-time appropriation of $30.5 million under the Agricultural Risk
Protection Act of 2000 (P.L. 106-224) so that license fees would not need to be raised.
Under PACA, growers and shippers who were injured between 1996 and 1999 in a
bribery scheme at the Hunts Point Wholesale Produce Market in Bronx, New York were
permitted to file claims against the companies that were implicated. Damages to growers and
shippers were estimated to be $13.95 million to $55.8 million. AMS inspectors were charged
with accepting cash bribes in exchange for reducing the grade of the produce that they
inspected, which then allowed the wholesale companies to pay amounts less than the invoice
price to their suppliers. Of the 24 inspectors and wholesaler’s employees who were arrested,
23 were convicted. Congress sought to improve the AMS inspection system so that such
incidents would not occur in the future when it enacted the Agricultural Risk Protection Act
of 2000 (P.L. 106-224) in June 2000. Under this law Congress provided $11.55 million for
AMS inspection service improvements. Many in the industry felt, however, that in addition
to these provisions, Congress should provide restitution to the companies who were injured
by the bribery scheme. No action was taken to do this in the 107th Congress.
Market Access Program (MAP)
MAP, a program that helps develop foreign markets for U.S. exports, is especially
important to the fruit and vegetable industry. Of the 65 U.S. trade organizations receiving
MAP funds in FY2001, 31 (or 48% of the total) were fruit, vegetable, and wine trade groups.
These groups received $36.2 million, or 40% of the total $90 million of MAP allocations for
that fiscal year. Although funding for MAP is provided through the Commodity Credit
Corporation (CCC) and not through annual appropriations, attempts are made almost every
year in the agricultural appropriations legislation to put limitations or caps on MAP funding.
An amendment proposed in the House floor debate on the FY2002 agricultural appropriations
(H.R. 2330) would have prohibited any MAP funding in FY2002, but the proposed
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amendment was defeated by a vote of 85-241. Many in the produce industry have asked for
increased funding for MAP, and the House-passed version of the farm bill (H.R. 2646)
increased authorization for MAP funding from the current $90 million to $200 million, and
the Senate bill (S. 1731) increased authorization to $190 million.
Supporters say that the program increases U.S. exports and consequently farm income
and promotes thousands of non-farm jobs. They also contend that MAP funding is necessary
to counter heavily subsidized foreign competition. Produce groups see MAP as one of the
few programs that helps open foreign markets to U.S. produce and food exports and note that
the government does not subsidize produce as it does other crops such as grains and cotton.
Opponents of MAP argue that the program is “corporate welfare” because it subsidizes the
advertising budgets of some of the largest and wealthiest exporters in the United States
(Sunkist Growers, Blue Diamond Nuts, Welch’s Foods, Sunsweet, Ocean Spray, and others).
In response to this criticism the 1996 farm bill (Federal Agriculture Improvement and Reform
(FAIR) Act, P.L. 104-127) specified that MAP funds for branded promotions be given only
to cooperatives and small businesses. Opponents also question the claim that MAP offsets
foreign competitors’ export subsidies and that it increases farm income or American jobs. For
further information see CRS Report RS20415, Agricultural Export Programs: The Market
Access Program and Foreign Market Development Cooperator Program, and CRS Issue
Brief IB98006, Agricultural Export and Food Aid Programs.
Food Safety
During the 1990s food-borne illnesses linked to fruits and vegetables increased and
became a major concern of officials of both the produce industry and government. Although
food-borne illnesses from fruit and vegetable consumption had been increasing, the number
of cases from contaminated produce was still very small compared to the number of illnesses
related to meat and poultry. According to data from the Centers for Disease Control and
Prevention (CDC), between 1993 and 1997, out of a total of 3,021 outbreaks from all foods,
80 of those outbreaks, or 2.6%, were attributed to fruits and vegetables. Of 92,695 individual
cases of food-borne illness from all foods during the same period, 13,442 of those cases, or
14%, were attributed to fruits and vegetables. These statistics represent the number of
outbreaks and cases that were reported to the CDC and that have a known vehicle of
transmission. The CDC estimates that, each year, 76 million food-borne illnesses (reported
and not reported) occur in the United States, resulting in 325,000 hospitalizations and 5,000
deaths. The total cases of food-borne illness, including those caused by the consumption of
fruits and vegetables, resulted in a series of food safety initiatives by the Clinton
Administration and the introduction of several food safety bills during the 106th Congress.
Domestically Produced Food. As part of a Food Safety Initiative, the Clinton
Administration announced the Initiative to Ensure the Safety of Imported and Domestic
Fruits and Vegetables in October 1997. The major actions taken under this initiative for
domestic produce were the implementation of voluntary FDA guidelines to help growers
minimize microbial contamination of fresh fruits and vegetables, a regulation that requires a
warning label on fruit and vegetable juices that have not been pasteurized, and a regulation
that requires all fruit and vegetable juice processors to implement Hazard Analysis and
Critical Control Point (HACCP) standards. HACCP standards are a method of keeping food
safe by identifying where hazards could enter food during its preparation for market and steps
that can be taken to prevent such hazards.
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The Bush Administration has continued many of the activities on food safety that were
begun under the former administration. For example, a survey of domestic fresh produce is
ongoing. In an interim report on the survey in July 2001, it was reported that out of 767
samples of domestically produced fruits and vegetables, 12 samples or 1.6% were found to
have the presence of either Salmonella or Shigella, but none of the samples had the presence
of E. coli 0157:H7. Produce items that were tested were cantaloupe, celery, cilantro, green
onions, loose-leaf lettuce, parsley, strawberries, and tomatoes. These were selected because
they are generally eaten raw and have a greater chance of having pathogenic bacteria in them.
In 1999 under the Clinton Administration the AMS began administering a pilot program
called the Microbiological Data Program. Its goal is to collect information on the food-borne
pathogens on domestic and imported fruits and vegetables. The Bush Administration is
continuing the program because the program’s information will be used to help Federal and
state public health agencies, such as the CDC, and the produce industry in their food safety
decisionmaking.
Imported Food. The Clinton Administration’s Initiative to Ensure the Safety of
Imported and Domestic Fruits and Vegetables, in addition to domestically produced produce,
had a goal to prevent importation of unsafe produce. The initiative proposed legislation
requiring inspection of foreign farms and the blocking of imported produce from countries
that do not have safety standards equal to those of the United States. Legislation was
introduced in the 106th Congress (H.R. 830 and S. 1126) to provide authority for this, but
these bills were not passed. The initiative also proposed increased funding to expand FDA’s
international food inspection force and directed USDA and the Department of Health and
Human Services (HHS) to help countries improve their food safety systems. In FY2000,
FDA increased its food inspections by 90% over the number of inspections conducted in
FY1999. Also in FY2000 the Clinton Administration provided training for foreign countries
on U.S. food safety laws, and this training has continued under the Bush administration. (See
below.)
The Clinton Administration also initiated a survey of imported fresh produce which was
completed in January 2001. The report on the survey said that of 1003 samples that were
collected and analyzed, 44 samples (4%) were contaminated with either Shigella or
Salmonella, while none of the produce items were contaminated with E. coli 0157:H7. Items
that were tested were broccoli, cantaloupe, celery, cilantro, culantro (herb similar to cilantro),
loose-leaf lettuce, parsley, scallions (green onions), strawberries, and tomatoes. Items with
the greatest amount of contamination were cilantro, cantaloupe, and culantro. Food safety
training was provided at firms that were the source of the contaminated produce, and harvest
workers were taught the proper sanitary practices needed to harvest and maintain harvest
equipment in a sanitary manner.
Finally, under the Clinton Administration, the FDA proposed a rule on “port shopping”
in January 2001. The proposed rule would require that food products that are refused entry
into the United States for food safety reasons should be marked “UNITED STATES
REFUSED ENTRY.” The purpose of the proposed rule is to prevent unscrupulous importers
from moving unsafe food into U.S. markets by trying to get a shipment that has been denied
entry admitted through a second or third U.S. port. The proposed rule has not been finalized.
Under the Bush Administration FDA has provided training to foreign suppliers and
growers on how to comply with U.S. rules for fruits and vegetables. Training sessions have
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been held during 2001 in Central America, Brazil, and South Africa. In addition, the United
States on September 4, 2001, signed an agreement with Mexico to share information for the
purpose of reducing food-borne illnesses.
FY2002 Appropriations. President Bush’s budget request for FY2002 asked for
increased funding for FDA’s food safety activities, including $352 million (an increase of
$10.3 million) for inspection of imported foods such as produce and seafood and to
modernize the Operational and Administrative System for Import Support (OASIS) import
data processing system; $344.7 million (an increase of $9.4 million) for food safety
laboratories, inspection of domestically produced high-risk foods that include produce and
juices; and $23 million to complete construction of a Los Angeles laboratory which tests for
residues on imported fruits and vegetables. The Administration sought authority to charge
user fees for Food Export Certificates in their request. However, Congress did not act on this
request.
The FY2002 agriculture appropriations law (P.L. 107-76) provided $344.7 million for
FDA food safety activities, an increase of $9.4 million. It further provided $352 million, an
increase of $10.3 million for FDA inspections and import monitoring. The House-passed bill
(H.R. 2330) would have provided $123.7 million for FDA food safety activities. Although
defeated, an amendment proposed by Representative Rosa DeLauro would have provided
$213 million in FY2002 for FDA’s food safety activities; the additional funding would have
begun to move FDA toward a level of 10% inspection of imported foods rather than the
current 1%. The Senate bill (S. 1191) recommended $234.8 million for FDA food safety
activities; the Senate Committee wanted FDA to continue to contract with a laboratory at
New Mexico State University to evaluate new testing methods for pathogens in fresh fruit and
vegetables. For additional information on food safety, see CRS Issue Brief IB98009, Food
Safety Issues in the 107th Congress.
Research
Two USDA agencies support extensive research on improving U.S. fruit and vegetable
crops and protecting them from pests and diseases. USDA’s in-house research agency, the
Agricultural Research Service (ARS) spent $130.4 million in FY2001 in fruit, vegetable, and
tree nut research. Through USDA’s Cooperative State Research, Education, and Extension
Service (CSREES) $59.2 million went to state agricultural research experiment stations for
fruit and vegetable research in FY2000, and states appropriated an additional $125 million
for a total of 154.1 million.
Insect Pests and Diseases. Fruit and vegetable crops are threatened by a variety
of emerging pests and diseases, including citrus canker, fruit fly (Mediterranean, Mexican, and
Oriental), plum pox virus, and Pierce’s disease (which affects wine and table grapes), among
others. Growers testified in recent hearings that they support increased funding for research
on the prevention, detection, control and eradication of these pests. It was also suggested
that research be done to find new pest and disease resistant varieties of fruit and vegetable
crops.
Congress annually appropriates funds to address particular ongoing or emerging pest and
disease problems. During debate on the FY2002 agricultural appropriations(P.L. 107-76) the
House-passed bill (H.R. 2330) proposed $52.2 million for the Emerging and Exotic Diseases
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and Pests of Plants program under ARS. This program targets Plum Pox virus, Pierce’s
disease, and diseases of vegetables. Both the House-passed bill and the Senate-reported bill
(S. 1191) which proposed $54.4 million are higher than the ARS request of $51.4 million.
The ARS Invasive Species (Control of Weeds/Arthropods) program supports laboratories to
find natural enemies of arthropods and weeds, and to develop methods and Integrated Pest
Management (IPM) Pilot Tests to control these pests. Arthropods to be investigated include
several kinds of fruit flies and the glassy-winged sharpshooter that spreads Pierce’s disease,
among other pests. For this program in FY2002 the House proposed $90.6 million (an
increase of $5.4 million over the ARS request for $85.2 million), and the Senate proposed
$92.5 million (an increase of $7.3 million over the ARS request).
Under CSREES the conference report provided $200,000 for Emerging Pests/Critical
Issues, the same amount requested by the agency and proposed in both the House and Senate
bills. Other special research grants of various amounts were provided for citrus canker, citrus
tristeza, and Pierce’s disease. For further information on USDA research programs see CRS
Report 97-325, Agricultural Research, Education, Extension and Economics Programs: A
Primer.
Alternatives to Methyl Bromide. Methyl bromide is a pesticide that is widely used
by the fruit and vegetable industry. About 87% of the total agricultural use is for soil
fumigation to protect crops against weeds, insects, and plant diseases. Another 8% is used
on crops after harvest to prevent the export of pests to foreign countries, many of which
require the process before items can enter the country. About 5% is used for fumigation of
warehouses, silos, food processing facilities, and transportation vehicles.
The use of methyl bromide has become an issue of concern because it contributes to the
destruction of the ozone layer in the earth’s upper atmosphere. In 1997, an amendment to
an international agreement known as the “1987 Montreal Protocol on Substances which
Deplete the Ozone Layer”, to which the United States is a signatory, required that the use of
methyl bromide be gradually reduced, and its production be completely eliminated by 2005
in industrialized countries. In the United States the deadline for the production of methyl
bromide was moved up to 2001 under the 1990 Clean Air Act, but this phaseout date was
later changed to conform with the Montreal Protocol’s phaseout date of 2005. The change
was made by the Omnibus Appropriations Act of FY1999 (P.L. 105-277), which like the
Montreal Protocol also permits the use of methyl bromide for fumigation of exports of U.S.
produce to foreign countries and of produce imported into the United States, since no
alternative currently exists for this purpose. On July 24, 2001, the Environmental Protection
Agency (EPA) published final rules for an interim process for exempting quarantine and pre-
shipment applications of methyl bromide under the Clean Air Act. (See the U.S. EPA Methyl
Bromide Phase Out Web Site at [http://www.epa.gov/ozone/mbr/mbrqa.html])
Those who are proponents of a global ban on the use of methyl bromide and ceasing its
production by industrialized countries sooner than 2005 contend that there are some approved
chemical and nonchemical alternatives to methyl bromide already in use, and many are in
advanced stages of research. Another contention is that methyl bromide itself is hazardous
to the health of farm workers who work in the fields where it is applied, as well as residents
who live near those fields. According to the EPA, exposure could lead to respiratory,
gastrointestinal, and neurological problems, including inflammation of nerves and organs, and
degeneration of eyes as well as fetal defects in pregnant women. Because of the reported
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effects of exposure to methyl bromide, farm worker advocate groups and other groups want
the pesticide banned as soon as possible. Supporters of methyl bromide use contend that
there are no economically viable alternatives currently available, and note that some of the
suggested alternatives are not acceptable to major export markets (i.e. irradiation) or
adversely affect the quality or shelf life of the exported produce (i.e. heat treatment).
The FY2002 agricultural appropriation (P.L. 107-76) provides $2,498,000 for the
Methyl Bromide Transition Program. The House-passed bill (H.R. 2330) would have
provided $2,500,000 to the Methyl Bromide Transition Program under CSREES, a slight
increase ($5,000) over the previous fiscal year; the Senate-passed bill (S. 1191) would have
provided $2,495,000, the same level as FY2001. The conference report provided
$2,498,000, a $3,000 increase, to the ARS for methyl bromide research. The House report
also called for a re-examination of the science of methyl bromide and ozone depletion, and
urged USDA to report on its findings as soon as possible. The Senate report stated that the
Committee expected ARS to hold down costs, to use a major part of methyl bromide funding
for field testing, and to direct technology transfer to land grant institutions involved in
research projects under the methyl bromide research program.
The House-passed version of the next omnibus farm bill (H.R. 2646) proposes a new
section that would permit the use of methyl bromide to prevent the introduction,
establishment, or spread of plant pests, including diseases, or noxious weeds. The Senate bill,
as reported, made no provision on methyl bromide. For further information on methyl
bromide, see CRS Report RS20863, Stratospheric Ozone Depletion: Phase-Out of Methyl
Bromide.
Animal and Plant Health Inspection Service (APHIS)
APHIS activities protect U.S. agriculture from harmful foreign pests, noxious weeds,
and plant diseases. Because of increased produce imports, tourism, and smuggling in recent
years, the produce industry has asked Congress to increase appropriations for APHIS. The
industry contends that new pests and disease are costing over $20 billion annually and that
it is more cost-effective in the long-term to increase funding for pest exclusion and detection
activities now rather than spend more in the future on eradication measures after pests have
become widespread.
The goal of APHIS activities is first to prevent foreign pests and diseases from entering
the country, but in case of introduction APHIS cooperates with states to manage and
eradicate them. Under pest disease and exclusion activities APHIS has three programs that
are valuable to the produce industry. The first of these programs is the Agricultural
Quarantine Inspection (AQI) the purpose of which is to prevent foreign species from entering
the United States. AQI activities include inspection of cargo and passengers and screening
of baggage at U.S. ports of entry. The program also issues export certificates and
phytosanitary certificates, conducts activities to prevent smuggling of plant and produce
material into the United States, and informs truckers and distributors about shipping
restrictions on regulated articles like Mexican avocados and Argentine citrus. The second
program is Fruit Fly Exclusion and Detection, which is intended to prevent the establishment
of the Mediterranean Fruit Fly (Medfly) and the Mexican Fruit Fly in the United States,
among others. The third program is the Trade Issues Resolution and Management (TIRM)
program which facilitates the export of U.S. agricultural products when U.S. access to foreign
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markets is threatened by sanitary and phytosanitary (SPS) barriers. SPS barriers are
increasingly used by countries to protect their markets from imported agricultural products,
including fruits and vegetables.
Under pest and disease management activities are two programs– Emerging Plant Pests
and Golden Nematode. The Emerging Plant Pest program includes activities to eradicate
citrus canker in Florida, plum pox virus in Pennsylvania, and the glassy-winged sharpshooter
which cause Pierce’s disease in wine and table grapes in California. The Golden Nematode
activities are intended to reduce Golden Nematode populations and protect a variety of crops
in the state of New York. In addition to funding under these two programs, other funding may
be provided for emergency eradication activities under the Contingency Fund and funds
transferred from the Commodity Credit Corporation (CCC). In FY2001 emergency transfers
of CCC funds amounted to $24.5 million for fruit fly eradication and $65.9 million for citrus
canker eradication.
Appropriations FY2002. The following table shows the funding proposals for APHIS
programs that benefit fruits and vegetables in the agriculture appropriations bills for FY2002
(H.R. 2330/S. 1191) and the amounts decided by the conference committee under the final law
(P.L. 107-76). Increased funding for these programs amounted to $55.7 million over FY2001
levels.
Funding for APHIS, FY2001-FY2002
($ in millions)
APHIS Program
FY2001
FY2002
House
Senate
Conference
Estimated
Requested
proposed
proposed
Agricultural Quarantine
38.9
47.3
47.3
47.3
47.3
Inspection
Trade Issues Resolution
8.2
11.4
8.2
8.2
11.4
and Management
Emerging plant pests
3.5
99.5
48.5
28.6
43.1
Fruit fly
32.5
56
34.8
36.8
36.8
Golden Nematode
0.6
0.6
1
0.6
0.8
Contingency Fund
4.1
4.1
4.1
4.1
4.1
Produce subtotal
87.8
218.9
143.9
125.6
143.5
APHIS total
529.4
702.9
587
602.7
620.7
Issues. Some regulatory activities of APHIS related to foreign imports are
controversial. Domestic industry concerns with the introduction of foreign pests often clash
with the trade interests of the industry. Protection from foreign pests can be perceived by the
exporting country as fear of competition and therefore any restrictions would be considered
unfair phytosanitary barriers. Following are some examples of recent controversies. (For
further information on phytosanitary barriers, see section on Trade Issues: Phytosanitary
Issues in this issue brief.)
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Argentine Citrus. A final rule was published by APHIS on June 15, 2000, that allowed
the importation into the United States of Argentine citrus from areas of Argentina that are free
of citrus canker, sweet orange scab, citrus black spot, and other plant pests. Prior to this rule
citrus products from Argentina were not allowed to be imported into the United States. The
following month, the U.S. Citrus Science Council (USCSC) filed a lawsuit against USDA
contending that the rule violated the Plant Quarantine Act of 1912 which protects U.S.
growers from foreign plant diseases and insects. USCSC also contended that the science used
by USDA was flawed, and asked for an independent peer review body to examine the science
on which the final rule is based. The citrus industry was supported in its position by some in
Congress, including Senator Barbara Boxer, who introduced an amendment to the FY2001
agriculture appropriations bill (H.R. 4461) that would have prohibited USDA from using any
funds to implement the rule on Argentine citrus imports. The amendment, however, was
defeated. Supporters of the import of Argentine citrus contend that excluding Argentine citrus
from the United States is protectionist and would set a precedent that would cause other
citrus-producing countries to exclude U.S. citrus from their markets. Some U.S. exporters of
products other than produce fear that excluding Argentine citrus from the U.S. also might
cause Argentina to refuse to import other U.S. agricultural products. This was a concern
especially to the U.S. pork industry. A federal district court in October 2001 ruled in favor of
USCSC and overturned the APHIS final rule, suspending import of Argentine citrus into the
United States until the agency revises its rule.
Mexican Avocados. Despite fears by U.S. avocado growers that the import of
Mexican avocados into the United States would risk the introduction of harmful pests, APHIS
first approved the import of Hass avocados from the Michoacan region of Mexico into the
United States in 1997. On July 13, 2001, a new proposed rule was published to expand the
number of states in which fresh Mexican avocados could be distributed. The proposal would
add 12 Midwestern states to the current list of 19 Northeastern states, and it would increase
the length of the shipping season during which the Mexican avocados may be imported into
the United States by two months. Although APHIS says that expanding the current Mexican
avocado import program would pose a “negligible risk” of introducing plant pests into the
United States, the California Avocado Commission disagrees. The Commission contends that
under the proposal, the avocados could be imported into states with warmer climates where
pests might be better able to multiply, and that the fruit could be shipped as late as April 30,
which means the fruit could remain in the distribution system into the summer months, further
increasing the risk of infestation. It believes that import of avocados from Mexico could lead
to an infestation in the United States which could cost more than $500 million to control and
would lead to import restrictions against California produce, financial losses, and lost jobs.
Both Mexican avocado growers and U.S. supporters of the proposed rule believe that U.S.
growers are using the pest issue to protect the domestic avocado industry from foreign
competition.
Farm Bill Issues
The 107th Congress is considering an omnibus farm bill to replace program authorizations
generally due to expire in 2002 and to set the direction of federal farm policy for the next
several years. During extensive hearings on the legislation, including field hearings, an array
of issues emerged that are of interest to the fruit and vegetable industry. Two issues that have
received widespread discussion are the existing fruit and vegetable restriction on planting by
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program crop producers and whether or not to introduce direct payments to fruit and
vegetable crops in the same manner as payments are now made to program commodities such
as wheat, corn, soybeans, sugar, peanuts, and dairy.
Flexibility Restriction
Under the 1996 farm bill (Federal Agriculture Improvement and Reform Act of 1996
(FAIR Act) farmers receiving direct government payments are allowed to plant any crop
except fruits and vegetables, and there are penalties for violation of this provision. This
restriction was not stated in the law until the 1996 FAIR Act because it was not until
enactment of that law that program crop farmers were given the flexibility to raise other crops
while still receiving direct government payments. In hearings held on the next farm bill,
produce industry leaders said that the restriction on the planting of fruits and vegetables on
contract acreage and effective penalties for violation of this provision should be continued.
They contended that unsubsidized fruit and vegetable producers should not have to compete
in the marketplace with producers who are subsidized by receiving direct government
payments.
Industry Assistance
The American Farm Bureau Federation (AFBF) proposed in February 2001 that
government payments be made to produce growers when prices go below production costs,
and that $1.5 billion annually should be authorized for this purpose. AFBF contended that
many fruit and vegetable growers are suffering low prices and are at risk of going out of
business because of losses over a span of several years. AFBF proposed a counter-cyclical
program in which government support payments rise when prices are low and decline when
prices are higher. Later in 2001 AFBF stopped calling for direct payments to fruit and
vegetable growers, reportedly because of concern that such a provision might mean an end to
the restriction against planting fruits and vegetables on contract acreage.
Others in the industry contend that subsidizing production in the fruit and vegetable
industry would be disastrous because it would lead to overproduction and an oversupply
situation that would further depress low prices experienced in recent years by many fruit and
vegetable growers. Furthermore, it is contended that many growers do not want to submit to
increased regulations that would be part of accepting direct government payments. The
produce industry has taken great pride in operating without government subsidies in the past,
and would prefer to continue to do so in the future. Nevertheless, many in the industry
contend that some government assistance is necessary because of falling commodity prices,
increased imports, increased invasive pests, rising energy and water costs, among others. An
alternative to direct payments has been suggested by the United Fresh Fruit and Vegetable
Association and 24 other produce organizations. In testimony during a May 2, 2001 hearing
before the House Committee on Agriculture, United’s president delivered this alternative
proposal with a suggested price tag of $3.58 billion. Among the recommendations were an
increase in funding for Section 32 government purchases of surplus produce commodities, the
addition of fresh fruits and vegetables to the Food Stamp and Women, Infants and Children
(WIC) programs, an increase in funding for the Market Access Program (MAP), technical
assistance to help resolve problems associated with phytosanitary and technical trade barriers,
and increased funding for eradication of and research on invasive pests and diseases, among
other recommendations.
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House Action
The House passed its version of the omnibus farm bill, the Farm Security Act 2001 (H.R.
2646), on October 5, 2001. The bill retains the restriction on fruit and vegetable planting by
program crop producers receiving direct payments. It also would increase MAP funding from
the current $90 million to $200 million annually; authorize $3 million annually for technical
assistance to remove, resolve, or mitigate sanitary and phytosanitary and related trade barriers
faced by specialty crop producers, including fruits and vegetables; ask the Secretary of
Agriculture to address the ability of tenant farmers, especially in fruit and vegetable
production, to use payments under the Environmental Quality Incentives Program (EQIP); add
a new research program to improve harvesting productivity for fruits and vegetables, including
citrus; provide assistance, limited to $50,000 per person, to orchardists who lost commercially-
planted trees as a result of a natural disaster; increase funding for government purchases of
surplus commodities from $300 million to $500 million; provide $15 million annually for a
Seniors Farmers’ Market Nutrition program; and requires the Secretary of Agriculture to issue
a Federal marketing order for caneberries. Provisions that were requested by the produce
industry but were not included in the House bill are the inclusion of fruits and vegetables in the
Food Stamp and WIC programs. During debate on the House floor an amendment proposed
by Representative Bono was passed. This amendment requires country of origin labeling at the
retail level of perishable agricultural commodities, both imported and domestic. Prepared
food, however, is exempted. One other amendment which was proposed and then withdrawn
would have affected the produce industry. This was the Hooley Amendment that would have
exempted organically grown caneberries from the bill’s marketing order for caneberries
Senate Action
The Senate version of the farm bill, the Agriculture, Conservation, and Rural
Enhancement Act of 2002, was passed on February 13, 2002. The Senate passed H.R. 2646
with the text of S.1731 as amended inserted in place of the House language. A number of
floor amendments were added to the version of S. 1731 that was approved by the Senate
Agriculture, Nutrition and Forestry Committee. The Senate version of H.R. 2646 retains the
fruit and vegetable restriction on planting on contract acreage; gradually increases MAP
funding from the current $90 million to $200 million by FY2006; expresses sense of the
Congress that trade negotiators should negotiate rules that eliminate practices such as sanitary
or phytosanitary restrictions that are not based on scientific principles; provides assistance to
tree growers that lost commercially planted trees as a result of a natural disaster; gradually
increases funding for government purchases of surplus specialty crops from $100 million in
FY2002 to $170 million in FY2006; provides $50 million annually for the Department of
Defense to purchase fresh fruits and vegetables for the schools and service institutions;
provides that USDA report on the research and development of risk management products for
specific produce and other specialty crops; provides for 75% Federal funding for discounts for
purchases of fruit and vegetables through electronic benefit transfer cards under the food
stamp program; provides $15 million annually for the Seniors Farmers’ Market Nutrition
program; requires country of origin labeling at the retail level of perishable agricultural
commodities, both imported and domestic; authorizes the use of Section 32 funds to conduct
a pilot program to provide free fruits and vegetables to schoolchildren in four states and one
Indian reservation; authorizes $25 million annually to establish a nutrition information and
awareness pilot program; authorizes the use of $100 million in Commodity Credit Corporation
funds to provide market loss payments to apple producers who lost markets in the 2000 crop
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year. For additional information on the farm bill, see CRS Report RL31195, The 2002 Farm
Bill: Overview and Status; and CRS Report RL30956, What Is A Farm Bill?.
Trade Issues
Phytosanitary Issues
Sanitary and phytosanitary (SPS) requirements and their potential to be trade barriers
have become more prominent issues as tariffs have been reduced under recent multilateral
agreements, such as the Uruguay Round Agreement on Agriculture and the North American
Free Trade Agreement (NAFTA). Sanitary barriers relate to meat, poultry, and seafood while
phytosanitary barriers relate to fruits and vegetables. Both the Uruguay Round (SPS
Agreement) and NAFTA (Chapter 7), agreements were intended to control the use of SPS
trade barriers. These agreements recognize that countries have a right to impose measures that
protect the health and safety of their populations and agricultural sectors, but stipulate that
such measures must be based on sound science and risk assessment. Often
exporting/importing countries disagree on whether specific SPS requirements are scientifically
based or are actually trade barriers.
The United States has made some progress removing other countries’ SPS trade barriers
in bilateral negotiations and in SPS agreements and the dispute settlement procedures of the
World Trade Organization (WTO). Since the implementation of the SPS Agreement began
in 1995, markets have been opened in Chile for California lemons, table grapes, kiwis, oranges,
and grapefruit; markets in Japan and Taiwan have been opened for 25 varieties of U.S.
tomatoes; markets in Mexico and China have opened for U.S. sweet cherries; and the market
in China has opened for U.S. table grapes and citrus. Despite these successes, in 2001 some
SPS trade barriers remain that prevent the export of U.S. fruits and vegetables in some
countries. Examples of such SPS requirements that U.S. producers see as trade barriers
include Australia’s ban against the importation of California table grapes in February 2001;
Chile’s phytosanitary requirements against the entry of U.S. cherries and citrus; Argentina’s
ban on California fresh fruit; China’s ban on U.S. fresh potatoes, avocados, peaches, and
grapes; and Korea’s ban on U.S. walnuts and apples, among others listed in the U.S. Trade
Representative’s 2001 National Trade Estimate Report on Foreign Trade Barriers.
Efforts made by some U.S. growers to prevent the import of specific fruits and vegetables
from foreign countries on the grounds that their industry needs protection from foreign pests
or diseases, have been viewed by some countries as a guise for protectionist measures. For
example, charges of U.S. protectionism have been made because of U.S. produce
organizations’ attempts to prohibit the import of Argentine citrus and Canadian Prince
Edward Island potatoes. Most recently, when USDA proposed a rule to expand the number
of states that could import Mexican avocados and to increase the length of the shipping season
during which the Mexican avocados may be imported into the United States, both Mexico and
U.S. supporters of the proposed rule consider opposition to the rule as protectionist. Before
1997 Mexican avocados were prohibited from being imported into the United States, but since
then imports have been allowed in a limited number of states during specific winter months.
(See Mexican Avocados under Animal and Plant Inspection Service (APHIS) in this issue
brief.)
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The House version of the farm bill (H.R. 2646) would provide $3 million annually for
technical assistance to remove, resolve, or mitigate sanitary and phytosanitary (SPS) and
related trade barriers faced by specialty crop producers, including fruits and vegetables. The
Senate version expressed the sense of the Senate that U.S. trade negotiators should negotiate
rules that eliminate practices such as sanitary or phytosanitary restrictions that are not based
on scientific principles. For further information on sanitary and phytosanitary (SPS) measures
see CRS Report 98-254, Agricultural Negotiations in the World Trade Organization, and
CRS Report 97-952, Agricultural Exports: Technical Barriers to Trade.
Dumping
Dumping results when an import is sold at “less than fair value” in the importing country.
U.S. fruit and vegetable farmers have sought relief from allegedly dumped imports. Under
current laws, a group of growers or a commodity organization may petition the Department
of Commerce, asking it to investigate whether an imported commodity is being sold in the
United States at dumped prices and whether those imports are injurious to domestic growers.
If Commerce determines that an imported product is being sold at less than its fair value, and
if the International Trade Commission (ITC) determines that a U.S. producer is being injured,
the Commerce Department will impose antidumping duties on the imported goods. U.S. apple
growers have successfully used antidumping laws to protect the domestic apple industry from
the dumping of Chinese apple juice concentrate. On the other hand, California grape growers
were recently unsuccessful in using this legal remedy to protect against alleged dumping of
grapes from Mexico and Chile.
Chinese Apple Juice Concentrate. Because of increasing Chinese apple juice
imports between 1995 and 1998 and declining prices that resulted from those imports, the U.S.
apple industry filed an antidumping petition against China in June 1999. The U.S. Apple
Association asked the U.S. Department of Commerce and the International Trade Commission
to impose a duty on Chinese apple concentrate, arguing that it was sold at below the cost of
production. On May 15, 2000 the ITC ruled that apple juice concentrate imports from China
were being sold in the United States at less than fair value and were economically harming
U.S. apple producers. On June 5, 2000, the Department of Commerce imposed antidumping
duties of 51.74 % on most Chinese apple juice concentrate imports. News reports have
indicated that prices for U.S. apples significantly increased once the duties on Chinese apple
juice were in place. In July 2001 the U.S. apple industry petitioned the Department of
Commerce contending that semi-frozen apple juice concentrate from China was within the
scope of the antidumping duty. The apple industry charged that Chinese concentrate suppliers
were evading the U.S. antidumping duties by chilling non-frozen concentrate to a semi-frozen
state and declaring it “frozen concentrate.” The Commerce Department found on October 1,
2001, that “semi-frozen” apple juice concentrate is classified as “frozen” and therefore does
not fall within the scope of the antidumping order which applies only to non-frozen apple juice
concentrate.
Mexican and Chilean Table Grapes. The Desert Grape Growers League of
Coachella Valley, California on March 30, 2001 filed a petition with the U.S. Department of
Commerce, asking for an investigation of the importation of Mexican and Chilean table grapes.
The grape growers charged that Mexican and Chilean grapes were being sold in the U.S.
market below the cost of production and were injuring the U.S. spring table grape industry.
Supporters of Mexican and Chilean grape growers denied the dumping charges, contending
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that the influx of imported grapes into the United States was a one-time only occurrence in
2000 caused by a combination of early table grape harvests in Mexico and California, a late
Chilean harvest, and a weak European market causing a surplus of Chilean grapes to be
shipped to North American markets. They also contend that because the Coachella Valley
growers produce only 10% of U.S. table grapes, this group was not large enough or
representative enough of the U.S. grape industry to legally make dumping charges. On June
11, 2001 the ITC determined that Mexican and Chilean table grape imports did not cause
damage to the U.S. table grape industry. Once the ITC has made a determination that imports
are not causing material injury, a case is terminated.
Foreign Agricultural Workers (H-2A Program)
Most fruits and vegetables are picked by hand, so that produce growers are dependent
on hired and contract labor. When these growers cannot get sufficient domestic labor to
harvest their crops, the H-2A program is an alternative source of farm workers. The program
provides for the temporary admission of foreign agricultural workers into the United States,
provided domestic workers are not available. The program is authorized by the Immigration
and Nationality Act (Section 101(a)(15)(H)(ii)(a)). According to the U.S. Department of
Labor, 41,827 farm workers were certified for the H-2A program in 1999.
Farmers who employ H-2A workers must follow procedures that involve the Department
of Labor and the Immigration and Naturalization Service (INS). Farmers must apply for
workers at least 45 days in advance of the time they are needed and must provide both
domestic and foreign workers with free housing and workers’ compensation.
In recent years farmers have argued that the H-2A program does not provide an adequate
number of workers at the times needed, and on relatively short notice. They have
recommended that the H-2A program be expanded to meet the labor needs of farmers and
point out that a crackdown on illegal immigration is reducing the number of workers available
( in 1999 about 52% of U.S. farm workers were illegal). They would like to see the guest
worker program simplified so that it is easier for farmers to use. On a broader scale,
proponents note that an adequate number of farm workers is needed to keep the U.S.
competitive in the global marketplace. Without an adequate number of farm workers, U.S.
producers of labor-intensive commodities will abandon production and agricultural jobs will
go to other countries, it is alleged.
Opponents of an expanded H-2A program and those generally opposed to any increases
in immigration levels include U.S. farm workers, their labor representatives, and farm worker
advocates. They argue that there is no current or future shortage of farm workers, and that
increasing the size of the guest worker program would increase the number of illegal workers
who compete with legal domestic workers. They further argue that if farmers want to attract
an adequate number of domestic agricultural workers, they should raise wages and improve
working conditions.
In the 107th Congress several bills have been introduced to reform the H-2A program.
The H-2A Reform and Agricultural Worker Adjustment Act of 2001 (H.R. 2736/S. 1313),
among other provisions, would allow foreign agricultural workers to become legal temporary
residents if they have worked in agriculture for at least 90 days in the 18-month period prior
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to July 2001 and are otherwise admissible as an immigrant. These bills would also retain the
current “adverse effect wage rate” requirement but would mandate studies of it. The “adverse
effect wage rate” is the minimum wage that must be paid to both foreign and domestic
agricultural workers when the employer is using non-immigrant workers; it is calculated
annually on a state-by-state basis by the USDA. The Agricultural Job Opportunity, Benefits,
and Security (AgJOBS) Act of 2001 (S. 1161), among other provisions, would allow foreign
agricultural workers to become legal temporary residents, but they would be required to work
150 days in any consecutive 12-month period during the 18 months prior to July 4, 2001 and
are otherwise admissible as immigrants. This bill would replace the “adverse effect wage rate”
with the requirement that employers pay the minimum wage or the prevailing wage for
agricultural workers in that area. The Wage Equity Act of 2001 (H.R. 2457/S. 1442) would
also replace the “adverse effect wage rate” with a requirement that employers pay the
minimum wage or the prevailing wage for agricultural workers. For further information on
foreign agricultural workers and the H-2A program see CRS Report RL30852, Immigration
of Agricultural Guest Workers: Policy, Trends, and Legislative Issues, CRS Report RL30780,
Immigration Legalization and Status Adjustment Legislation, CRS Report RL30395, Farm
Labor Shortages and Immigration Policy, and CRS Report 95-712, Immigration: The Labor
Market Effects of a Guest Worker Program for U.S. Farmers.
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