Order Code RL33520
Specialty Crops: 2008 Farm Bill Issues
Updated June 19, 2008
Jean M. Rawson
Specialist in Agricultural Policy
Resources, Science, and Industry Division

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Specialty Crops: 2008 Farm Bill Issues
Summary
Congress has completed action on omnibus legislation to replace expiring law
governing the programs and policies of the U.S. Department of Agriculture (USDA).
The new Food, Conservation, and Energy Act of 2008 (P.L. 110-246, H.R. 6124)
contains provisions on marketing, crop insurance and disaster assistance, protection
against pests and diseases, export promotion, research, and domestic food assistance,
all of which are important to the competitiveness of the specialty crop sector of U.S.
agriculture. The sector includes fruit, vegetable, tree nut, and nursery crop producers,
processors, manufacturers, wholesalers, importers, and exporters.
Although specialty crops are not eligible for direct support under USDA’s farm
commodity price and income support programs, the policies that Congress sets for
the those programs affect them. Chief among these policies is one that largely
restricts commodity program participants from planting fruits and vegetables on
program base acres. Specialty crop interests long have maintained that the provision
is essential to protect the sector from the economic damage that could occur if
additional acres of vegetables (in particular) suddenly came into production. The
Food, Conservation, and Energy Act of 2008 extends the planting restriction through
FY2012, but authorizes a pilot program in seven midwestern states to allow planting
of fruits and vegetables — exclusively for processing — on base acres.
P.L. 110-246 also includes, for the first time in the history of the farm bill, a
separate title covering horticultural (specialty) and organic crops (Title X). The title
provides substantial mandatory funding over the life of the farm bill and beyond for
several major new and continuing programs. The key provisions include (1)
reauthorization of the program making block grants to states for research, marketing,
and promotion projects benefitting specialty crops, providing $466 million over 10
years in mandatory funds; (2) reauthorization of the program of cost-share assistance
to producers for organic certification, with a one-time transfer of $22 million in
mandatory funds; (3) expansion of the current Farmers’ Market Promotion Program
to increase direct farmer-to-consumer marketing opportunities, providing $33 million
in mandatory funds; (4) establishment of a federal/state pest and disease detection
and control program with $377 million in mandatory funds over 10 years; and (5)
creation of a network of nurseries to grow pest- and disease-free plant stocks for
horticultural crops, with $20 million in mandatory funds. The title also contains a
section authorizing $10 million annually in appropriations for research on colony
collapse disorder in honeybees.
The nutrition title of P.L. 110-246 contains provisions intended to increase the
availability of fresh fruits and vegetables in the school lunch and other domestic
nutrition assistance programs. For greater detail on these provisions, see CRS Report
RL33829, Domestic Food Assistance: The 2007 Farm Bill and Other Legislation in
the 110th Congress.
This report will be updated if events warrant.

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Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Sector Snapshot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Selected Issues and Their Status in the Enacted 2008 Farm Bill . . . . . . . . . . . . . . 3
Planting Flexibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
In the Enacted Bill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Government Purchases for Nutrition Programs . . . . . . . . . . . . . . . . . . . . . . . 4
In the Enacted Bill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Market Expansion Through Promotion Programs . . . . . . . . . . . . . . . . . . . . . 4
In the Enacted Bill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Disease and Pest Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
In the Enacted Bill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
In the Enacted Bill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Organic Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
In the Enacted Bill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Additional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
List of Figures
Figure 1. Value of Vegetables, Melons, Potatoes, and Sweet Potatoes as
Percent of Total Market Value of Agricultural Products Sold: 2002 . . . . . . 8
Figure 2. Value of Fruits, Tree Nuts and Berries as Percent of Total Market
Value of Agricultural Products Sold: 2002 . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Figure 3. Value of Nursery, Greenhouse, Floriculture, and Sod as Percent of
Total Market Value of Agricultural Products Sold: 2002 . . . . . . . . . . . . . . 10

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Specialty Crops: 2008 Farm Bill Issues
Introduction
Specialty crops (fruits, vegetables, tree nuts, and nursery crops) are not eligible
for direct support under USDA’s farm commodity price and income support
programs. Nonetheless, the policies that Congress sets for those programs
significantly affect the specialty crop sector’s economic well-being. Federal policies
on trade, conservation, credit, marketing programs, domestic food assistance, and
research also all affect the specialty crop sector.1
Congress sets the policies in these areas, for the most part, in an omnibus, multi-
year authorizing law commonly called the “farm bill.” In May 2008, Congress
passed a new farm bill to replace the previous one, the Farm Security and Rural
Investment Act of 2002 (P.L. 107-171), which expired in 2007 (Congress extended
it until the new bill could be enacted).
Some stakeholders and policymakers called for specialty crop issues to occupy
a larger role in farm bill policy discussions than in the past. They noted that the
traditional farm commodity support programs are under pressure from constraints on
the federal budget, as well as from developments in existing trade obligations and
from negotiations on further trade agreements.2 Policies covering U.S. agriculture
more comprehensively could provide a way to address those pressures while
increasing U.S. competitiveness, they argued.
Several major legislative proposals focusing on policies and programs of
importance to the specialty crop sector were introduced in the 110th Congress in
preparation for the 2007 farm bill debate. These bills included H.R. 1600 (Cardoza),
the EAT Healthy America Act; H.R. 1551 (Kind)/S. 919 (Menendez), the Healthy
Farms, Foods, and Fuels Act; and S. 1160 (Stabenow), the Specialty Crops
Competition Act, among others. The Administration also proposed several policy
reforms affecting specialty crops as part of the comprehensive 2007 farm bill
proposal that it released in February 2007. A number of stakeholder groups also
issued position statements concerning the specialty crops issues they wanted to see
addressed in the new farm bill.
1 For background information on all federal programs affecting specialty crops, see CRS
Report RL32746, Fruits, Vegetables, and Other Specialty Crops: A Primer on Government
Programs, by Jean M. Rawson.
2 For information on the relationship between international trade negotiations and U.S. farm
policy, see CRS Report RS21905, Agriculture in the WTO Doha Round: The Framework
Agreement and Next Steps, by Joseph J. Schwarz, and CRS Report RS20840, Agriculture
in the WTO: Limits on Domestic Support, by Randy Schnepf.

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Sector Snapshot
Sales of fruits, vegetables, and tree nuts account for nearly one-third of U.S.
crop cash receipts and one-fifth of U.S. agricultural exports, according to USDA’s
Economic Research Service (ERS). When floriculture, greenhouse, and nursery
crops are included, specialty crops account for approximately 50% of all U.S. cash
receipts of farm crops.3
Despite their relatively large share of crop receipts, specialty crops occupy only
about 3% of U.S. harvested cropland. Although certain states and regions are
predominant, nearly every state has some commercial specialty crop production
within its borders. Figures 1, 2, and 3 (in the Appendix) illustrate the distribution,
nationwide, of areas producing fruits, vegetables, tree nuts, and nursery crops, shown
as percentages of the total market value of agricultural products sold (including
livestock).4
About three-fourths of growers are considered specialized, which means that
they receive at least half of their gross value of production from the sale of fruits,
vegetables, tree nuts or horticultural crops. According to ERS survey data,
specialized farms account for 95% of the total value of U.S. specialty crop
production, although more than half of them have annual sales of less than $250,000
and identify off-farm income as their primary means of support. Specialized farms
may produce one or two other commodities in addition to their specialty crop,
according to ERS, and about 15% of them also participate in the major commodity
support programs.
The remaining 5% of the value of U.S. specialty crop production comes from
non-specialized fruit and vegetable farms, which may produce as many as four other
commodities (often including livestock) besides their specialty crop. Nearly half of
these farms grow one or more of the major commodity crops and participate in the
price and income support programs, according to ERS.
Vegetables, dry beans, and potatoes — for processing — are grown primarily
on large-acreage, non-specialized commercial farms. California is the overwhelming
leader in production, but certain states in the Northeast, Central and Upper Midwest,
and Pacific Northwest also are major producers.
3 Fruit and Vegetable Backgrounder (USDA, Economic Research Service, April 2006) is
the source for all the statistical information in this section. It is available online at
[http://www.ers.usda.gov/].
4 The maps show the value of specialty crops as a percent of total market value of all
agricultural products sold, including livestock. Data from ERS’s Fruit and Vegetable
Backgounder, cited above in this section, compare specialty crop values to other crop
values.

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Selected Issues and Their Status
in the Enacted 2008 Farm Bill5
Planting Flexibility6
A persistent issue for the specialty crop industry is the status of continuation of
a policy set in previous farm bills that restricts the ability of participants in the farm
income and commodity price support programs to plant fruits and vegetables on acres
on which they receive benefits (base acres). Congress first inserted this provision in
the 1996 farm act (P.L. 104-127), after it had adopted a proposal to allow producers
of program crops to respond to market signals and grow different crops on base
acreage. The restriction was extended through 2007 by the 2002 farm bill.
Specialty crop producers, in general, have maintained since 1996 that allowing
program crop producers to switch even small numbers of acres to fruits or vegetables
would negatively affect markets, and thus growers’ annual income.
In 2005, a World Trade Organization (WTO) challenge to U.S. farm commodity
programs raised questions concerning the use of the planting flexibility restriction
under existing trade commitments.7 Discussion on whether to extend the restriction
in the next farm bill thus has an important trade policy aspect as well as domestic
market aspect.
A number of reports have been issued since late 2006 that examine the possible
effects on domestic fruit and vegetable producers of eliminating the planting
restriction. These analyses suggest that the adverse effects of removing the
restriction likely would be small relative to the overall industry, although there could
be larger impacts on individual producers, commodities, and regions.
In the Enacted Bill. The Food, Conservation, and Energy Act of 2008 (P.L.
110-246) maintains the 2002 farm bill provision restricting the planting of fruits and
vegetables on base acres. However, the act authorizes a pilot project in seven
midwestern states that will allow fruits and vegetables — exclusively for processing
— to be planted on 75,000 base acres. USDA is required to evaluate and report to
Congress on the impact the pilot project is having on the price and supply of both
fresh and processed fruits and vegetables.
5 For a comparison of the provisions in P.L. 110-246 with the provisions in the House and
Senate bills, and with previous law, see CRS Report RL34228, Comparison of the 2008
Farm Bill Conference Agreement with the House and Senate Farm Bills.
6 For detailed analysis of this issue, see CRS Report RL34019, Eliminating the Planting
Restrictions on Fruits and Vegetables in the Farm Commodity Programs, by Renee Johnson
and Jim Monke.
7 For more detailed information and analysis of this issue, see CRS Report RS22187, U.S.
Agricultural Policy Response to WTO Cotton Decision, by Randy Schnepf, and CRS Report
RL33697, Potential Challenges to U.S. Farm Subsidies in the WTO, by Randy Schnepf,
Jasper Womach.

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Government Purchases for Nutrition Programs
USDA directly purchases and then donates a variety of non-price supported
commodities, including fruit, vegetable, and tree nut products, for consumption
through domestic nutrition and food assistance programs. These purchases and
donations help groups of nutritionally vulnerable recipients (such as low-income
school children, participants at family child care homes, and others) to eat a healthy
diet and avoid hunger, while also helping to balance supply and demand for various
commodities.
In the Enacted Bill. Section 10603 requires USDA to purchase additional
fruits, vegetables, and nuts for nutrition assistance programs, above the traditional
purchases of $200 million per year. USDA must purchase an additional $190 million
in FY2008; $193 million in FY2009; $199 million in FY2010; $203 million in
FY2011; and $206 million in FY2012 and thereafter. Section 10101 requires the
Secretary to arrange for an independent evaluation of USDA’s purchasing process in
order to ensure that the funds are principally devoted to procuring fresh fruits and
vegetables.
The enacted bill also creates a new program to provide fresh fruits and
vegetables to elementary schools, replacing a program that began as a pilot project
in a limited number of states. The new program will operate in all states, in those
elementary schools that the state designates. The act provides mandatory funding of
$40 million in October 2008; $65 million in July 2009; $101 million in July 2010;
and $150 million in July 2011. Funding in future years will be indexed for inflation.
Half of the annual funding will be divided equally among the states, and the
remaining half will be allocated under a formula based on population.
Market Expansion Through Promotion Programs
A key provision of the Specialty Crops Competitiveness Act of 2004 (P.L. 108-
465), which was the first law that Congress passed on specialty crop policies
specifically, was the authorization, through FY2009, of a program of block grants to
states to support projects in research, marketing, education, pest and disease
management, production, and food safety. In most states, the state department of
agriculture administers this program. The act authorized $44.5 million in annual
appropriations for the program; Congress appropriated $7 million in each of FY2006-
FY2008.
Expansion of this program and an effort to provide mandatory funding for it was
a major focus in the farm bill debate. Specialty crop interests have consistently urged
Congress to provide mandatory funds for the block grant program, arguing that the
government should increase its investment in the sector in light of its value to U.S.
agriculture as a whole. However, producer groups and lawmakers from states where
commodity crops predominate were not in favor of redirecting money to support
other programs if it meant reducing the current level of support for the commodity
programs.

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In the Enacted Bill. Title X of P.L. 110-246 extends the program of block
grants to states and provides mandatory funding for the program totaling $224
million over the five-year farm bill period. Congress did not redirect commodity
program funds to support the block grant program. The House bill would have
provided $365 million in mandatory funding; the Senate bill would have provided
$270 million over the period from FY2008 through FY2011.
The rural development title of P.L. 110-246 reauthorizes and provides $15
million in mandatory funding for the Value-Added Producer Grants program that was
created by the Agricultural Risk Protection Act of 2000 (P.L. 106-224). The program
makes planning grants and provides working capital for marketing value-added
agricultural products. The new act stipulates that 10% of the funding be set aside for
beginning and socially disadvantaged farmers and ranchers, and that another 10% be
reserved to help small and medium-sized farm operations make marketing alliances
with other segments of the supply chain. Organic producers also are eligible to
receive these grants.
The trade title of the conference agreement provides $37 million in mandatory
funding over a five-year period for Technical Assistance for Specialty Crops (TASC),
a program that helps exporters of U.S. specialty crops overcome other countries’ non-
tariff trade barriers, particularly those associated with plant pest and disease
concerns.
The trade title also maintains mandatory funding for the Market Access Program
(MAP) at $200 million annually, and specifies that organically produced
commodities are eligible for marketing assistance. MAP is a cost-share program
between USDA and commodity organizations or agribusinesses to promote U.S.
agricultural products overseas.
Disease and Pest Protection
Stakeholders traditionally have expressed the concern that efforts to identify and
mitigate the effects of existing pest and disease threats and to prevent the importation
of new ones need to be strengthened.
H.R. 1600 (the EAT Healthy America Act, introduced in early 2007) included
provisions to establish a new program of cooperative agreements with states to
conduct early pest detection activities, and to return the import and entry agricultural
inspection functions to USDA from the Department of Homeland Security, where
they were transferred in 2003. The latter provision was dropped in both the House
and Senate farm bills, but other significant pest and disease provisions were retained
in the conference agreement.
In the Enacted Bill. Title X of P.L. 110-246 establishes a cooperative
federal-state program for early pest detection and surveillance and for threat
identification and mitigation. The act provides mandatory funding of $12 million for
the program in FY2009, $45 million in FY2010, and $50 million annually in FY2011
and FY2012. Bill language prohibits USDA from considering the availability of non-
federal funds in the states’ applications for federal funds.

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CRS-6
Title X contains additional provisions relating to pest and disease control.
Section 10202 provides $5 million annually in mandatory funds over four years to
establish a National Clean Plant Network to grow pest- and disease-free planting
stock for the specialty crop industry. Section 10203 amends the Plant Protection Act
(PPA; 7 U.S.C. 7701 et seq.), the act authorizing USDA’s Animal and Plant Health
Service’s activities on the plant health, to increase the penalties for violating the
PPA, expand the violations for which penalties are assessed, and clarify subpoena
authorities under the PPA.
Research
In hearings before the farm bill debate, specialty crops producers and trade
associations argued strongly in favor of increasing federal expenditures for specialty
crop research. They maintained that research provides critical support for the
industry, without risking challenges under international trade rules. The EAT
Healthy America Act (H.R. 1600) and the Administration’s farm bill proposal called
for using mandatory funds to substantially increase agricultural research on the
production and economics of specialty crops.
In the Enacted Bill. The research title of P.L. 110-246 (Title VII) provides
$230 million in mandatory funds for a specialty crop research initiative over the
five-year farm bill period and also authorizes annual appropriations of $100 million.
This amount is greater than that provided in the House and Senate bills ($215 million
and $80 million, respectively.) Bill language stipulates that five subject areas for
research — crop improvement, identification of pest and disease threats, production
efficiency, improved technologies, and prevention and detection of food safety
hazards — should each receive at least 10% of the grant funds. Recipients must
commit to providing a 100% match, either in funds or in-kind support.
Organic Agriculture
The National Organic Certification Cost-Share Program, which was established
by the 2002 farm bill, authorized a one-time, mandatory transfer of $5 million from
the Commodity Credit Corporation (CCC) with which USDA helped to defray the
costs of producers and handlers seeking organic certification. There was a $500
maximum on the amount a producer could receive, and the federal share could not
account for more than 75% of a producer’s total costs. The transfer occurred in
FY2002 and remained available until fully expended, which was in fall 2006.
Certain of the farm bill proposals that were introduced or released early in 2007
called for a substantial expansion of this program. Some early farm bill proposals
also contained a provision to make technical assistance available to farmers wanting
to convert their operations from conventional to organic practices, and to reimburse
transition costs up to $10,000 per farm or handling operation.
In the Enacted Bill. Section 10301 extends the certification cost-share
program, provides a one-time transfer of $22 million in mandatory funds to be
available until expended, and raises the maximum amount that a producer or handler
can receive to $750. Conferees deleted the requirement that the federal share of a
producer or handler’s certification not exceed 75%. The enacted bill also provides

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CRS-7
$5 million in mandatory funding to improve USDA’s collection of segregated data
and survey information about the price, production, and marketing of major
organically produced commodities. The bill contains a detailed list of required data
sets, studies, and market surveys, and authorizes an additional $25 million in
appropriations over the five-year farm bill period to maintain support for these
activities.
The enacted bill adds language to the conservation title (Title II) to establish that
producers are eligible for technical assistance under the Environmental Quality
Incentives Program (EQIP) for converting their farm to organic production. Efforts
to authorize a $50 million program in the farm bill specifically for this purpose were
not successful. The bill increases mandatory funding for all activities under EQIP by
$3.4 billion.
The 1990 farm bill established an organic agriculture research and extension
initiative supported by $3 million annually in mandatory funding. The enacted bill
provides $78 million in mandatory funds over the FY2009-FY2012 period for this
initiative, and also authorizes annual appropriations of $25 million.
Additional Provisions
The enacted bill contains a number of provisions addressing other issues of
importance to the horticulture and organic agriculture communities. Among these
are provisions to —
! increase the amount that orchardists and nursery tree growers can
receive in payments for weather-related losses under the Tree
Assistance Program from $75,000 to $100,000;
! authorize increasing appropriations for USDA’s National Organic
Program Office, starting at $5 million in FY2008 and rising to $11
million in FY2012, for the purpose of improving program efficiency
and regulatory oversight activities;
! expand the Farmers’ Market Promotion Program with $33 million
in mandatory funds over the five-year term of the farm bill;
! establish a Healthy Food Enterprise Development Center with $5
million in mandatory funds to make competitive grants to entities
that will increase low-income families’ access to healthy affordable
foods;
! authorize $1 million in annual appropriations for a program to
educate consumers and handlers of fresh produce on science-based
sanitary handling methods;
! authorize $9 million in annual appropriations to support market
news and price information on specialty crops; and
! authorize $10 million in annual appropriations for grants to conduct
research on honeybee colony collapse disorder.

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Appendix
Figure 1. Value of Vegetables, Melons, Potatoes, and Sweet Potatoes
as Percent of Total Market Value of Agricultural Products Sold: 2002

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CRS-9
Figure 2. Value of Fruits, Tree Nuts and Berries as Percent
of Total Market Value of Agricultural Products Sold: 2002

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CRS-10
Figure 3. Value of Nursery, Greenhouse, Floriculture, and Sod
as Percent of Total Market Value
of Agricultural Products Sold: 2002

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