The Fruit Growers News

A wide variety of fruit and vegetable growers are interested in the benefits available in the 2002 farm bill, but many remain wary of becoming a program crop, according to fruit and vegetable organizations.

With trade and support among the top issues, the creation of the next farm bill has already begun. The bill, to be completed in 2002, may be the first to contain extensive provisions for produce growers, according to Senator Richard Lugar, chairman of the Senate Agriculture, Nutrition and Forestry Committee. Two groups with fruit and vegetable constituents, United Fresh Fruit and Vegetable Association (United) and the American Farm Bureau have taken a keen interest in the formation of the bill.

United has formed the Produce Industry’s Farm Bill Working Group to prepare growers for the formation of the farm bill. The group has fostered coordination between produce commodity representatives, preparing for the mid-March United meeting where a general fruit and vegetable white paper will be completed.

Ken Nye, a commodity specialist with Michigan Farm Bureau, says that the fruit and vegetable grower’s interest in the farm bill is a reflection of difficult times in agriculture. “The discussion is triggered by the assistance that the apple industry is going to get as well as the little bit of assistance that the potato and cranberry industries received.”

“Many growers asked, why aren’t we part of this. Why shouldn’t we be considering supporting our sectors of the industry along with the major program crops that have been receiving these supports for years,” said Nye.

The industry is taking a long-term viewpoint. Growers want improved crop insurance and risk management along with the opportunity for market loss assistance payments when it’s necessary, according to Nye.

“When we get around to transition payments, that are part of the ‘96 Farm Bill, then we get into some really risky ground, because the opportunity is very great to distort the market,” said Nye. “These are fairly small acreages; you would have to be very careful in the construction of those types of programs, because they really could skew the market quite dramatically.”

Despite the challenges, many producer groups are seeking the benefits.

“The reality is that the 2002 farm bill has already been launched,” said Phil Korson, president and managing director of the Cherry Marketing Institute. “Discussions have already started, and if we can get a seat at the table in the early stages, we can be assured that we will have some control over what goes in at the later stages.

Korson’s statements echo the sentiment of members of the potato and apple industry, and many others who are trying to position the fruit and vegetable industry so that it doesn’t lose its seat at the farm bill table early in the debate.

“We feel very strongly at this point in time, as the farm bill is renewed, the climate is right with the recent inclusion of cranberry and apple in direct farm payments. Other fruits and vegetable growers ought to have the same options open to them,” said Korson.

The grower groups are focusing on several areas or titles of the farm bill that could be especially beneficial to the fruit and vegetable industry. International trade, federal nutrition policy, food safety regulations, marketing orders, risk management tools and domestic agriculture support policies are among the list of key issues for the groups involved.

International trade

At issue for all commodities is the access to foreign markets. Each fruit and vegetable commodity has grown their exports with limited success, often through their own efforts.

“The market (for cherries) has grown abroad, but it has grown because we have subsidized it,” said Korson. “The government hasn’t subsidized it, the industry has subsidized it - farmers have subsidized it.”

“International market access is one of the key points we are working on within the potato sector itself and with other fruit and vegetable people,” said Bud Middaugh, executive director of the National Potato Council. “The rules for potato people are different from those for other fruit and vegetable people, as well as very much different from corn, wheat and soybeans.”

“We are working as potato people through our Washington D.C. representative, and along with other fruit and vegetable commodity groups. We are working along with United on a number of designated committees that they have set up.”

Produce exporters report that the problem is that the playing field is not level. “The European Union, as an example, subsidizes its apple producers to the tune of $2 billion annually,” said Kraig Naasz, president of U.S. Apple Association (USApple).

“Foreign producers enjoy duty free access for the export of their apples to this country, while our apples face duties of 10 to 20, even 60%,” said Naasz. “Most in our industry want parity, but many are questioning how long we can survive while our government seeks to achieve that parity.”

“In the international market access arena, one of the things that our industry is almost certain to call for is the increase in the authorization for the market access program,” said Naasz. He said the apple industry has benefited from this program since its creation in 1985 to help promote products overseas.

Naasz said the funding for that program was capped in 1996 by the Freedom to Farm act at $90 million and USApple is seeking to restore the funding to the level of $200 million. “It would help us promote our products in other markets, particularly those that have provided only limited market access to U.S. apple producers in the past.”

Support policy

For every dollar in farm income last year the federal government supplied 50 cents. Last year the dire economic conditions confronting American agriculture prompted Congress to provide emergency measures of income support that totaled a record $28 billion. This country’s agriculture support policy is an issue that makes members of the industry cautious.

In these days of over abundance, potato people wrestle with the question of whether to advocate a domestic support program, according to Middaugh.

“Should the potato be a program crop?” asked Middaugh. “The sense that the potato people have and the general feeling of the fruit and vegetable folks is that we don’t want to become a program crop. That is a hurdle right there to be able to get past,” he said.

Naasz said that support issues would require the most deliberative discussion on the part of the industry because it is truly new ground.

“One thing that this industry, like all of the fruit and vegetable industry has never really explored until now, is the potential of a longer-term financial relationship with the federal government,” said Naasz. “We’ve seen, since the New Deal, America’s farm policy directed toward the producers of program crop commodities- oil seeds, grains, cotton.

“This industry has long prided itself on the independence from the federal government it has enjoyed,” said Naasz. He said relying on the marketplace has made the apple industry strong.

“We have been in a position, unlike our brethren in the major programs, to anticipate changing market conditions and to try to outguess our competitors and it has benefited us,” Naasz said.

But three to four years of poor markets prompted the fruit and vegetable industry to examine the huge toll this has taken on the industry. The USDA calculates that growers lost an estimated $760 million over the last three years in the apple industry alone.

Korson supports the creation of some kind of safety net for growers. “We look at the farm bill and believe we need to look at what provisions need to be put in place for the next five years. This could really be considered more of a safety net for fruit and vegetable growers.”

“Who is going to protect that grower? Maybe nobody wants to protect them; but if we make this decision that nobody is going to protect them, then we are going to export our agriculture, and in the next five years, we will shift a major part of our production of agriculture offshore,” said Korson.

Crop insurance

Risk management through insurance programs, is another part of the farm bill important to producers. “It is also very important to the potato industry to work on risk management tools,” said Middaugh.

Nutrition Policy

Federal nutrition policy could be the source of benefits to many producers of healthful foods. According to Naasz, the government spends literally millions of dollars treating America’s health problems. Knowing that one of the leading causes of many diseases affecting Americans today is poor diet, any policy that increases the consumption of fruits and vegetables would save the government billions of dollars.

Research

Others are in the research arena, because there is a research title in the farm bill. Fruits and vegetables have a number of research needs, not the least of which is identifying alternative crop protection tools for those that are likely to be lost under the continuation of the Food Quality Protection Act.

Food safety

In the food safety arena, many worry about the potential for food borne illnesses on imported produce and the potential for the introduction of harmful pest and plant diseases.

Marketing orders and promotion

Supporting the marketing of fruits and vegetables is a problem for most products. The industry is actively exploring any adjustments to the federal legislation that allows the creation of state or regional marketing orders along with national marketing and promotion programs.

2002 farm bill deliberations

Some see reasons to hope for the expansion of the next farm bill. “I am optimistic about our ability to garner the attention of Congress in the next two years while the farm bill is being crafted,” said Naasz.

“The Senate is divided 50-50 and a change of four seats or five seats could tilt the balance of power in the House of Representatives. When you look at the electoral map in the presidential race, you see the role that the farm states played in deciding the victor,” said Naasz.

“The parties, neither Republican nor Democrat can afford to ignore even the smallest constituency. I hope and expect that our association, along with the fruit and vegetable industry will be able to leverage that fact when it comes to Congress’ deliberations on the farm bill.”