Fruits and Vegetables: Issues for Congress

Fruits and Vegetables: Issues for Congress

Order Code IB10098
Issue Brief for Congress
Received through the CRS Web
Fruits and Vegetables:
Issues for Congress
Updated January 27, 2003
Brenda Branaman
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

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
ers; provides disaster assistance to tree grow-
among crops normally receiving farm
ers; authorizes a marketing order for
subsidies, there are a number of U.S.
caneberries; increases Section 32 funding
Department of Agriculture (USDA) activities
including $200 million annually to purchase
and programs that provide support to fruit and
fruits and vegetables; establishes programs to
vegetable growers. These include crop disas-
help organic producers; authorizes a Cran-
ter assistance and, in recent years, market loss
berry Acreage Reserve Program; and provides
assistance payments. The government also
for temporary followed by mandatory country
supports these crops through federal market-
of origin labeling.
ing orders, the Market Access Program
(MAP), food safety activities, research pro-
FY2002 agricultural appropriations
grams to improve crops and to help develop
legislation(P.L. 107-76/H.R. 2330) included
safe pesticides (e.g., alternatives to methyl
$75 million in market loss assistance for apple
bromide), and research and inspection activi-
growers; $344.7 million for FDA food safety
ties to prevent foreign pests and disease from
activities and $352 million for FDA inspec-
entering the country and to manage and eradi-
tions and import monitoring. It also increased
cate them if they are introduced. The primary
funding for research on emerging diseases and
law that exclusively serves the produce indus-
pests of plants and invasive insect species that
try is the Perishable Agricultural Commodi-
affect fruits and vegetables; and provided
ties Act of 1930 (PACA).
$2,498,000 for the Methyl Bromide Transition
Program. Funding for APHIS programs that
Farm bills also contain provisions that
benefit fruits and vegetables was increased by
affect this industry. The Farm Security and
$55.7 million. These spending levels remain
Rural Investment Act of 2002 (P.L. 107-
in effect as long as the government is operat-
171/H.R. 2646) was signed into law on May
ing under continuing resolutions in FY2003.
13, 2002. The Act maintains: the restriction
on planting of fruits and vegetables by com-
Several bills that related to issues of
modity program growers; increases funding
foreign agricultural workers’ immigrant status
for the Market Access Program; provides
and wages were proposed but not passed in
technical assistance on barriers to specialty
the first session of the 107th Congress.
crop exports; provides funding for several
nutrition programs that encourage the domes-
The alleged dumping of foreign fruit and
tic consumption of produce; a new research
vegetable commodities into the U.S. market is
program to improve harvesting productivity
an issue of concern to the produce industry,
for fruits and vegetables; a program to autho-
although no legislation was proposed in the
rize some uses of methyl bromide and search
107th Congress to address the issue. However,
for alternatives; and requires a report on
some growers were successful in obtaining
improvements to crop insurance for specialty
Department of Commerce and International
crops. It also provides market loss assistance
Trade Commission acceptance of their anti-
to apple growers and New York onion grow-
dumping petitions.

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MOST RECENT DEVELOPMENTS
The status of legislation making appropriations for USDA for FY2003, which would
include provisions affecting the Department’s several programs affecting the fruit and
vegetable industry, cannot be reported definitively at this time. Floor debate has not yet
taken place on the original House and Senate measures, which the respective Appropriations
Committees reported out in July 2002. Currently, work is proceeding on an omnibus
FY2003 appropriations measure that includes USDA funding as well as a $3.1 billion
agriculture disaster package that may affect some specialty crops. The President’s FY2004
budget proposal will be released on February 3, 2003.
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.
P.L. 107-25 (H.R. 2213) provided $5.5 billion in emergency direct payments to farmers
in FY2001, of which $159.4 million went to specialty crops, including fruits and vegetables.
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.
The 2002 farm bill (P.L. 107-171/H.R. 2646) provides $96 million for market losses in
the 2000 crop year to apple producers and $10 million for market losses in 1996 through
2000 crop years to onion producers in Orange County, New York. It also authorizes disaster
assistance for commercial growers of trees, bushes and vines with a limit of $75,000 in
payments on no more than 500 acres per individual grower. For further information on
agricultural emergency assistance, see CRS Report RL31095, Emergency Spending for
Agriculture: A Brief History of Congressional Action, FY1989-2001.
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. 2001.
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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).
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 2002 there were 36 federal marketing orders in
effect. Local administrative committees decide if a marketing order in a specific
geographical area will have regulations requiring quality and 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. AMS is responsible for formulating new
marketing orders upon request of growers and handlers, and for monitoring marketing orders
to assure they operate legally and in the public interest. These activities are financed by
assessment fees collected from handlers; of the funds collected, Congress annually
appropriates an amount to support AMS’ personnel costs for operating the orders. In
FY2002, the agency received $14.6 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 filing fees (about $7 million in FY2002), rather then by federal
appropriations. One recent exception occurred in FY2000, when Congress appropriated a
one-time amount of $30.5 million under the Agricultural Risk Protection Act of 2000 (P.L.
106-224) to make an AMS proposal to increase the license fee unnecessary.
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.
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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 66 U.S. trade organizations receiving
MAP funds in FY2002, 31 (or 47% of the total) were fruit, vegetable, and wine trade groups.
These groups received $41.3 million, or 41% of the total $100 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
amendment was defeated by a vote of 85-241. Many in the produce industry have asked for
increased funding for MAP. The Farm Security and Rural Investment Act of 2002 (P.L. 107-
171, the 2002 farm bill) gradually increases the authorized funding level from $100 million
in FY2002 to $200 million in FY2006.
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).
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, the produce industry and government food safety officials became
concerned about foodborne illnesses linked to fruits and vegetables, particularly after
unpasteurized fruit juices and fresh salad ingredients caused outbreaks of severe illness and
death. According to data from the Centers for Disease Control and Prevention (CDC),
between 1993 and 1997, out of a total of 3,021 outbreaks of foodborne illness from all foods,
80 (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 (14%), were attributed to fruits and
vegetables. (These statistics represent the number of outbreaks and cases that were reported
to the CDC for which there is a known vehicle of transmission.) The CDC estimates that,
each year, a total of 76 million foodborne illnesses (reported and not reported) occur in the
United States, resulting in 325,000 hospitalizations and 5,000 deaths.
Domestically Produced Food. Certain steps to improve the safety of fruits and
vegetables were undertaken in 1997 as part of the Clinton Administration’s Initiative to
Ensure the Safety of Imported and Domestic Fruits and Vegetables. The Food and Drug
Administration (FDA), which is responsible for the safety of fruits and vegetables, worked
with the produce industry to implement voluntary FDA guidelines to help growers minimize
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microbial contamination of fresh fruits and vegetables. In addition, FDA promulgated 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 is a
pre-emptive food safety method based on identifying where hazards can enter food during
preparation and taking steps to prevent them.
The Bush Administration has continued certain activities begun under the Clinton
Initiative. 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
are being tested are cantaloupe, celery, cilantro, green onions, loose-leaf lettuce, parsley,
strawberries, and tomatoes. These items are generally eaten raw and are representative of
the types of products that present a greater risk of having pathogenic bacteria in them. In
addition, AMS is continuing a pilot program called the Microbiological Data Program. Its
goal is to collect information on the foodborne pathogens on domestic and imported fruits
and vegetables. The Bush Administration intends for the program’s information to 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 Bush Administration also has continued to pursue the goal of
preventing the importation of unsafe produce through increased international inspection and
training of foreign governments on U.S. food safety laws. According to FDA officials, the
agency has increased import inspections by 90% over earlier years, and both FDA and USDA
have worked with the governments of foreign countries to update their inspection systems.

In January 2001, FDA released a Clinton-initiated survey of imported fresh produce.
The report said that of 1,003 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. Training
sessions were held in 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 foodborne illnesses.
Finally, under the Public Health Security and Bioterrorism Preparedness and Response
Act of 2002 (P.L. 107-188), the practice of “port shopping” was made illegal. FDA is to
promulgate through the Federal Register rulemaking process a regulation to require that food
products refused entry into the United States for food safety reasons will be marked
“UNITED STATES REFUSED ENTRY.” The intent is to prevent unscrupulous importers
from trying to enter a refused shipment through a second or third U.S. port.
FY2002 and 2003 Appropriations. The FY2002 agriculture appropriations law
(P.L. 107-76) provided $344.7 million for FDA food safety activities, an increase of $9.4
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million. It further provided $352 million, an increase of $10.3 million for FDA inspections
and import monitoring.
For FY2003, the bill reported by the House Appropriations Committee (H.R. 5263)
provides for total FDA funding of $1.385 billion for FY2003, an increase of $15.7 million
above the FY2002 appropriation of $1.218 billion and $7.3 million above the FY2003
Administration request of $1.377 billion. The Senate Appropriations Committee-reported bill
(S. 2801) provides a total of $1.404 billion, which is $19 million above the House level,
$34.7 million above the FY2002 appropriation and $26 million over the request.
H.R. 5263 does not include a specific level of funding for food safety, but the Senate
committee, noting the expansion of FDA activities under the category of "Food Safety
Initiative" recommends a total of $504.8 million in S. 2801 for this purpose. House report
language requests a summary of the case-controlled studies that link naturally-occurring
bacterial pathogens to specific foods - i.e., E. coli, Salmonella, Campylobacter, and Listeria
found on meat, poultry, eggs, seafood, fruits and vegetables. In addition, both bills would
support further progress in the detection of the pathogens; the Senate would provide $2
million for FDA to continue the evaluation of new testing methods for pathogens at New
Mexico State University.
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 $144 million in FY2002 in fruit, vegetable, and
tree nut research. Through USDA’s Cooperative State Research, Education, and Extension
Service (CSREES) $45.5 million went to state agricultural research experiment stations for
fruit and vegetable research in FY2001, and states appropriated an additional $153.9 million
for a total of $199.4 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. For FY2003 agricultural appropriations, the House bill (H.R. 5263)
proposes $202.4 million for the Emerging and Exotic Diseases and Pests of Plants program
under ARS. The Senate bill (S. 2801) proposes $207.2 million for this program that targets
citrus canker, Plum Pox virus, Pierce’s disease, and diseases of vegetables. Both the House
bill and the Senate bill are higher than the ARS request of $56.2 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 FY2003, the House proposes $105.8 million (an increase of $9.9
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million over the ARS request for $95.9 million), and the Senate proposes $110.4 million (an
increase of $14.5 million over the ARS request).
For the CSREES program, Critical Issues – Plant and Animal Diseases, both House and
Senate bills propose $500,000, an increase of $300,000 over the FY2002 enacted amount
($200,000). This program in FY2002 was known as the Emerging Pests/Critical Issues
program under CSREES Research and Education Activities, and it covered plant pests only.
Under the FY2003 budget and bill proposals, this program would include both plant and
animal pests and is part of Integrated Activities.
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/spdpublc/mbr/].)
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 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).
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The proposed Senate bill (S. 2801) for the FY2003 agricultural appropriation would
provide $3 million for the Methyl Bromide Transition Program, an increase of $502,000 over
the FY2002 enacted amount of $2,498,000. The proposed House bill (H.R. 5263) would
provide $3.5 million, an increase of about $1 million over the FY2002 amount.
The 2002 farm bill (P.L. 107-171/H.R. 2646) requires the Secretary of Agriculture, in
consultation with local authorities, to determine when methyl bromide may be used to
control the spread of plant pests and diseases or noxious weeds. Alternatives must be
considered prior to making a determination, and if no alternatives exist the Secretary is
required to initiate research programs to develop them. The Secretary must keep a registry
of authorized uses. 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 AQI part of APHIS’ pest and disease exclusion
mission has been transferred to the new Department of Homeland Security under P.L. 107-
296. For a discussion of issues pertaining to border inspection, agricultural protection, and
homeland security, see CRS Report RL31466, Homeland Security Department: U.S.
Department of Agriculture Issues.) 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 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
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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. In FY2001 emergency transfers of CCC
funds amounted to $24.5 million for fruit fly eradication and $65.9 million for citrus canker
eradication.
Appropriations FY2003. The following table shows the funding proposals for APHIS
programs that benefit fruits and vegetables in the agriculture appropriations bills for FY2003
(H.R. 5263/S. 2801).
Funding for APHIS, FY2002-FY2003
($ in millions)
APHIS Program
FY2002
FY2003
House
Senate
Estimated
Requested
proposed
proposed
Agricultural Quarantine
58.1
72.1
59.8
64.2
Inspection
Trade Issues Resolution and
11.6
11.8
11.5
11.5
Management
Emerging plant pests
46.6
131.0
105.8
69.5
Fruit fly
39.0
64.0
47.6
64.9
Golden Nematode
0.9
0.7
0.6
0.6
Plum pox
0.0
5.6
2.6
5.6
Contingency Fund
4.2
4.2
4.1
4.1
Produce subtotal
160.4
289.4
232.0
220.4
APHIS total
620.5
782.2
735.9
735.7
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 may 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.)
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
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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, 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.
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 November 1, 2001, a new rule was published to expand the number
of states in which fresh Mexican avocados could be distributed. The proposal added 12
Midwestern states to the current list of 19 Northeastern states, and it increased 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 considered 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
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
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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 contended 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 was contended that many growers did 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
contended that some government assistance was 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,
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.
Farm Bill Provisions
The President signed into law on May 13, 2002, the Farm Security and Rural Investment
Act of 2002 (P.L. 107-171/H.R. 2646). Concerning fruits and vegetables, the new Act:
•
Continues to prohibit the planting of fruits, vegetables, and wild rice on base acres by
commodity program growers is continued and applied to peanut base acres.
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•
Gradually increases funding for the Market Access Program from $100 million in
FY2002 to $200 million in FY2006.
•
Provides $2 million annually for an export assistance program to address the barriers to
specialty crop exports.
•
Provides $6 million for a Fruit and Vegetable Pilot Program that will distribute fresh and
dried fruits and fresh vegetables to elementary and secondary schoolchildren in four
states and one Indian reservation.
•
Increases funding for the Seniors Farmers’ Market Nutrition Program from $5 million
in FY2002 to $15 million annually for FY2003 through FY2007. The purpose of this
program is to provide locally grown fruits, vegetable, and herbs to low-income seniors
to increase domestic consumption of produce.
•
Authorizes $10 million annually for FY2002 through FY2007 for a Nutrition
Information and Awareness Pilot Program for the purpose of increasing the domestic
consumption of fresh fruits and vegetables.
•
Adds a new research program to improve harvesting productivity for fruits and
vegetables (including citrus).
•
Requires the Secretary of Agriculture, in consultation with local authorities, to determine
when methyl bromide may be used to control the spread of plant pests and diseases or
noxious weeds. Alternatives must be considered prior to making a determination, and
if no alternatives exist the Secretary is required to initiate research programs to develop
them. The Secretary must keep a registry of authorized uses.
•
Permanently includes sweet potatoes as a crop that would be eligible for crop insurance
indemnity payments after harvest.
•
Requires a report by the Federal Crop Insurance Corporation (FCIC) on the progress
made in research and development of risk management products for specialty crops,
including specific fruits and vegetables, Christmas trees, and agricultural nursery
commodities. The FCIC must also report on the progress in increasing the use of risk
management products by specialty crop producers, by small- and moderate-sized farms,
and in areas that are under served.
•
Provides $94 million for market loss payments to apple producers for market losses
during the 2000 crop year, and $10 million for onion producers in Orange County, New
York for market losses in 1996 through 2000 crop years.
•
Authorizes a Tree Assistance Program with a limit of $75,000 in disaster assistance
payments on no more than 500 acres to individual commercial growers of trees, vines,
and bushes.
•
Authorizes a marketing order for caneberries (including raspberries, blackberries, and
loganberries).
•
Increases funding from $300 million to $500 million in Section 32 funds for the
purchase of surplus crops. $200 million must be used annually to purchase fruits,
vegetables, and other specialty food crops and of that amount $50 million is to be used
to purchase fresh fruits and vegetables for schools and service institutions. Requires a
report to Congress on the quantity and type of fruits, vegetables, and other specialty
crops and other commodities purchased with Section 32 funds.
•
Authorizes such sums as necessary to support the Farmers’ Market Promotion Program
to support farmers’ markets, roadside stands, community supported agriculture programs
and other direct producer-to-consumer market opportunities in order to increase domestic
consumption of agricultural commodities.
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•
Provides $5 million in FY2002 to establish a National Organic Certification Cost-share
Program. Certified organic producers are exempt from paying assessments under
commodity promotion laws.
•
Authorizes $10 million for a Cranberry Acreage Reserve Program.
•
Beginning September 30, 2002, requires that guidelines be issued for voluntary country
of origin labeling at the retail level for fresh fruits and vegetables among other
commodities. Beginning on September 30, 2004, country of origin labeling becomes
mandatory.
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 opened in Chile for California lemons, table grapes, kiwis, oranges, and
grapefruit; markets in Japan and Taiwan have 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.
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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.)
The new farm act provides $2 million annually for an export assistance program to
address the barriers, including phytosanitary barriers, to specialty crop exports. For further
information on sanitary and phytosanitary measures see CRS Report 98-254, Agricultural
Negotiations in the World Trade Organization.
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.
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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 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
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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 have allowed foreign agricultural workers to become legal
temporary residents if they had worked in agriculture for at least 90 days in the 18-month
period prior to July 2001 and were otherwise admissible as an immigrant. These bills would
also have retained the current “adverse effect wage rate” requirement but would have
mandated 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 have allowed foreign agricultural workers to become legal temporary
residents, but they would have been required to work 150 days in any consecutive 12-month
period during the 18 months prior to July 4, 2001, and were otherwise admissible as
immigrants. This bill would have replaced 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
Issue Brief IB10103, Immigration Legislation and Issues in the 107th Congress, 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, CRS Report 95-712,
Immigration: The Labor Market Effects of a Guest Worker Program for U.S. Farmers, and
CRS Report RS21015, The Adverse Effect Wage Rate (AEWR).
FOR ADDITIONAL READING
CRS Report RL31595. Organic Foods and the USDA National Organic Program, by Jean
M. Rawson. October 3, 2002. 8 p.
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