Federal price and income support programs do not directly cover fruit and tree nuts. Nonetheless, some outlays stem from a variety of general, non-crop-specific programs, including the following:
- Federal production assistance programs, such as Federal crop insurance, the Noninsured Crop Disaster Assistance Program, and western irrigation subsidies;
- Export programs, such as the Market Access Program (MAP), which include several fruit and tree nuts;
- Federal food purchase programs, such as the National School Lunch Program, which also include fruit and tree nuts;
- Federal marketing orders;
- Federally sanctioned national research and promotion programs; and
- Federal food purchase and donation programs, which also includes fruit and tree nuts.
The fruit and tree nuts sector is part of a broader specialty crops industry. The Agricultural Act of 2014 (2014 Farm Bill) retains planting restrictions for fruit, vegetables, and dry pulse crops (excluding mung beans and garbanzo beans/large chickpeas) on acres eligible for payments under Title I commodity programs (payment acres). Unless the restricted crops are grown solely for conservation purposes and not harvested for use or sale, or they are double cropped in a region with a history of double cropping covered commodities with restricted commodities, planting fruits, vegetables, or wild rice on payment acres will result in an acre-for-acre reduction in payment acres.
In addition, as with the previous Farm Bill ( Food, Conservation, and Energy Act of 2008), provisions in support of specialty crops in the 2014 Farm Bill fall under different titles of the legislation, such as Title X (Horticulture), Title I (Commodities), Title III (Trade), Title IV (Nutrition), and Title VII (Research). Many of these provisions dedicate funding to expand programs for specialty crops to help strengthen the industry’s competitiveness in domestic and global markets, with a particular focus on incentives for marketing and promotion, data and information collection, plant pest and disease management, food safety education, and programs to facilitate the inclusion of fruits and vegetables in school feeding programs. Examples of programs reauthorized and/or expanded in the 2014 Farm Bill are the Specialty Crop Block Grant, Specialty Crops Research Initiative, Farmers Market Promotion Program, and the Fresh Fruit and Vegetable Program for schools. See highlights of the 2014 Farm Bill provisions that are important to fruit and tree nut industries.
Crop Insurance and Disaster Assistance
Commercial fruit and tree nut growers always face production or yield risk, mostly associated with adverse weather, and Federal assistance is provided through ad hoc (or emergency) Federal disaster assistance and Federal crop insurance. USDA's Risk Management Agency (RMA) provides crop insurance policies for many crops, including a rising number of fruit and tree nut crops. RMA also has pilot programs in select counties for newly developed insurance programs, mostly operating for 2 to 3 years before converting to permanent status. Federal crop insurance is obtained prior to the growing season and provides an indemnity payment if the farmer's actual yield falls below a predetermined guarantee. The policies are acquired through private insurance companies. Although crop insurance is not free to farmers, the Government subsidizes a significant portion of the cost.
USDA's Farm Service Agency (FSA) administers the Noninsured Crop Disaster Assistance Program (NAP). Fruit and tree nut growers who do not have established Federal crop insurance programs for their crops are eligible for Federal financial assistance under this program when natural disasters cause low yields, loss of inventory, or inability to plant. The amount disbursed to fruit and tree nut growers under NAP varies, depending on natural disasters (if any) affecting crops in a given year and on whether growers have purchased higher levels of coverage authorized under the 2014 Farm Bill. Movement under the 2014 Farm Bill toward expansion of crop insurance and NAP coverage for underserved commodities reflects efforts to broaden the range of commodities eligible for Federal support through programs more oriented to managing risk. This approach underlines the growing emphasis on risk management, and especially Federal crop insurance, in Federal programs for agriculture. In addition, producers eligible for disaster assistance programs can also apply for the Emergency Conservation Program, Disaster Debt Set-Aside Program, Emergency Farm Loan Program, and the Tree Assistance Program, which are designed to aid farmers who are affected by drought, flood, freeze, tornadoes, and other natural calamities (for more information, see Disaster Assistance Program).
Trade Promotion Programs
The Market Access Program (MAP), administered by USDA's Foreign Agricultural Service, uses funds from USDA's Commodity Credit Corporation to help U.S. producers, exporters, private companies, and other trade organizations finance activities such as consumer promotions, market research, technical assistance, and trade servicing for agricultural products. For fiscal year 2015, approximately $52 million of MAP funds were directly allocated to the U.S. fruit and tree nuts industry—about 30 percent of the $173.2-million program total. Additional allocations made to other trade associations will also likely benefit the fruit and tree nut industry.
The Technical Assistance for Specialty Crops (TASC) Program (introduced in the 2002 Farm Security and Rural Investment Act, or 2002 Farm Act) is designed to open, retain, and expand markets for U.S. specialty crops. It helps U.S. exporters address phytosanitary or other technical barriers that prohibit or threaten exports of U.S. specialty crops. Eligible crops include all cultivated plants and their U.S. products (except wheat, feed grains, oilseeds, cotton, rice, peanuts, sugar, and tobacco).
Marketing orders, administered by the USDA's Agricultural Marketing Service (AMS), are designed to collectively solve instability within fruit and vegetable markets. That goal is accomplished by enforcing product quality standards, regulating the flow of product to the market, standardizing packages and containers, creating reserve pools for storable commodities, and authorizing production and marketing research and advertising. Industries participate voluntarily and agree to Federal oversight over certain aspects of their operations.
Once established, a marketing order becomes binding on all individuals or businesses serving as "handlers" in a geographic area covered by the order. Imports may be directly affected by these marketing orders. Under the Agricultural Marketing Agreement Act of 1937, Section 8e, imports of commodities for which domestic marketing orders are in effect must comply with the same or comparable regulations on grade, size, quality, or maturity issued in the marketing order.
For example, the only Federal marketing order in force for avocados covers fruit produced in South Florida between June and March. It authorizes standards for grade, size, quality, maturity, and packing, as well as for the size, capacity, and weight of the shipping containers. Minimum grade, size, and maturity standards are also applied to imported avocados. See the AMS list of Federal Marketing Orders for the orders currently in effect.
Research and Promotion
Federally sanctioned research and promotion programs (also known as checkoff programs) allow stakeholders across an industry to pool their expertise and resources to develop a coordinated program of nutrition, research, marketing and consumer outreach efforts to improve, maintain, and develop markets for agricultural commodities and products. Under AMS supervision, the programs are administered by a board or council whose members are nominated by the specific industry and then appointed by the Secretary of Agriculture. Board membership may include producers, handlers, importers, and processors (depending on which industry members pay assessments to fund the programs), as well as members of the public. There are over 20 national research and promotion programs serving a variety of commodity industries. See the AMS Web pages on cultivated blueberries, Hass avocados, mangoes, processed raspberries, and watermelons for more information on these current programs.
Domestic Feeding Programs
Each year, over 1 billion pounds of processed and fresh fruits and vegetables are procured by USDA and distributed through several domestic feeding and nutrition programs including the National School Lunch Program, The Emergency Food Assistance Program, and various disaster and supplemental feeding programs. A majority of the funding is used to purchase processed fruits and vegetables, but fresh produce is also part of the program. These purchases have the dual benefit of assisting agricultural producers and supporting the nutritional needs of low income and economically vulnerable segments of the population.
The Fresh Fruit and Vegetable Program provides funding to schools to buy fresh produce to give to children during non-meal periods. For the 2014-15 school year, the 2014 Farm Act approved a pilot that allows the inclusion of canned, frozen, or dried fruits and vegetables in the Fresh Fruit and Vegetable Program, with a report due to Congress 60 days after the conclusion of the year. Another program allows schools to utilize the distribution system of the Department of Defense, and uses USDA Foods entitlement dollars to purchase fresh produce for use with school meals (the initial program was expanded to include the Food Distribution Program on Indian Reservations). The 2014 Farm Act established a pilot program (Title IV) that allows schools in up to eight States to use multiple suppliers and geographic preference in the procurement of unprocessed fresh fruit and vegetables for school feeding programs.