The Fruit Growers News - October 2002

The 2002 Farm Bill has been hailed as a step in the right direction for many growers but the fine print may make this bill very hard to swallow for many vegetable growers who raise soybeans or who rent land where soybeans are grown.

Dr. Alan Gray from the Purdue University Department of Agricultural Economics says the problem stems from the new Farm Bill’s addition of soybeans as a program crop eligible for USDA payments.

Fruits and vegetables are considered a restricted crop, just as in past bills, but adding soybeans to the list of crops eligible for program payments will further limit the options for growers who need to rent land or want to expand their operations. Under the old Farm Bill, growers could find enough acres to plant specialty crops and rotate their ground. The new bill adds a soybean base to those for other program crops like corn, wheat, other grains and cotton. This puts many growers in a situation where every available acre will be tied up, not allowing for fruit and vegetable production unless the grower were to opt out of the program.

As rules stand now, if growers plant fruits and vegetables on base acres they could get assessed a penalty, eliminating the base for one year, along with a fine of up to 80% of the value of the crop you are growing, says Gray. If they opt out of the program for one year of the six-year life of the Farm Bill, then their base, or their landlord’s base if it is rented ground, will be reduced by that amount, (i.e.) 1/6 for the next program.

The new rules, which are still being ironed out by USDA may not adversely impact established fruit and vegetable growers, especially those who are not in a soybean growing region. However, growers who rent land particularly in the Midwest and South where soybeans have been grown may find themselves with fewer options.

Steve Smith, agriculture manager with Red Gold, a Midwest-based processing tomato company, says a landlord with a soybean base will not be inclined to rent to fruit and vegetable growers when they lose the opportunity for program payments on that land for that year. The increased costs associated with losing out on the program will likely be passed on to the vegetable grower in increased rents, if landowners are willing to rent at all.

“Most of our growers (with Red Gold) are on a four-year rotation,’’ says Smith. “If they have 200 acres of processing tomatoes they have to have 800 acres available for rotation. They’re usually going to different landlords to rent land. These landlords won’t rent their ground once every four years to growers with the prospect of losing their chance to stay in the program or losing base acreage.’’ He estimates this will affect growers who grow sweet corn, peas, green beans, potatoes and other crops for the processing market as well as fresh market growers who may need to rent land. “This may just shut down the Midwest processing industry,’’ says Smith sadly.

Not all vegetable growers are against the new rules in the 2002 Farm Bill. Grower groups representing areas not impacted by the addition of soybeans to the Farm Bill, such as California, Florida and Texas support the restriction as a way to limit competition. Oddly enough the effect of this bill may restrict growers wishing to exit from fruits and vegetables back into grains according to Smith.

“If the farm is not eligible for corn and beans then there is no way out,’’ he notes “Protectionism is a sticky wicket,’’ says Smith. “We need to create more market share. I believe a rising tide floats all ships. To try and control prices using protectionist methods is something I don’t believe in.’’

Smith says some of the Congressional sponsors of the of the Farm Bill have been convinced that the impact on vegetable growers were unintended consequences of the Farm Bill.

“There was a juggernaut to get the new Farm Bill passed including soybeans as a program crop but this has made 100% of the land in some places unavailable for use (by fruit and vegetable growers), according to Smith. “Their intent was not to say historic vegetable processing in this area should be affected like this.”

Smith says they have been supported in their efforts by the Mid America State Directors of Agriculture and the Indiana Farm Bureau but have faced opposition from groups like the United Fresh Fruit and Vegetable Growers Association. The Canned and Frozen Food and Growers Coalition (CFFGC) has formed to fight the effects of the new bill and eventually to change the law so that specialty crops growers in the affected region won’t be restricted. They are asking growers to contribute 50 cents per acre to the lobbying effort whose funding is being handled by the National Food Processors Association. Smith says thus far Red Gold has garnered 80% participation in the coalition. To assist in this effort, donations should be sent to CFFGC c/o Steve Austin, P.O. Box 83, Elwood, IN, 46036.

Another possible effect of the new bill will be to move growers away from sustainable growing practices such as rotation, which has been promoted by USDA for many years as a means to reduce disease and insect pressure on crops. If growers are unable to find suitable land to rent for processing and fresh market vegetable crops, their losses due to insect and disease pressure will undoubtedly increase.

Gray notes that if growers have an established history of growing vegetables and specialty crops this new program may not pose a problem. However, growers who want to expand or if they decide in the future that fruit and vegetable crops might make sense for their operation, they are affected. Growers face a penalty for whatever acreage is planted to fruits and vegetables above what has been planted in the past.

Concerned growers can get more information on the new Farm Bill by visiting www.usda.go/farmbill. They may also want give feedback to their U.S. representative. In the end, according to Smith, the only way to see major changes in a bill that has already been passed is to get a legislative fix.