Historically, Federal price and income support programs have not directly covered vegetables or most dry pulse crops. However, selected pulse crops (dry peas, lentils, and small and large chickpeas) became eligible for some commodity programs under the 2002 Farm Bill. Coverage for these pulse crops continues under the 2014 Farm Bill through the Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) programs as well as through the marketing loan program.
For more detailed information on these Title I programs, see Crop Commodity Program Provisions – Title I
- Price Loss Coverage (PLC): Producers who hold base acres of wheat, feed grains, rice, oilseeds, peanuts, and pulses (covered commodities) are eligible to enroll in the PLC program on a commodity-by-commodity basis. Payments are made when market prices fall below the reference price set in the 2014 Farm Act. The reference prices for pulses for 2014-2018 crops are:
$11.00 per hundredweight
$19.97 per hundredweight
$19.04 per hundredweight
$21.54 per hundredweight
- Agriculture Risk Coverage (ARC): Producers who hold base acres of wheat, feed grains, rice, oilseeds, peanuts, and pulses (covered commodities) are eligible to enroll in ARC on a county or individual farm basis. County ARC payments are made when county crop revenue for the enrolled commodity drops below 86 percent of the county benchmark revenue. Individual ARC payments are made when the actual individual crop revenues, summed across all covered commodities on the ARC farm, are less than 86 percent of the ARC individual benchmark revenue.
- Marketing Assistance Loan Program: A post-harvest nonrecourse commodity loan program with marketing loan provisions for producers of wheat, corn, grain sorghum, barley, oats, upland cotton, extra-long staple (ELS) cotton, long- and medium-grain rice, soybeans, other oilseeds, peanuts, wool, mohair, honey, dry peas, lentils, and small and large chickpeas. When market prices fall below loan rates, marketing loan provisions allow for repayment of loans at the lower price and for loan deficiency payments to producers who choose not to place commodities under loan. The loan rates for pulse crops are:
$5.40 per hundredweight
$11.28 per hundredweight
$7.43 per hundredweight
$11.28 per hundredweight
- Eligibility requirements and payment limitations: In order to receive some types of commodity program payments, individuals must meet eligibility requirements based on the level of their participation in farming activities and on their income. Once individuals are eligible, payment limitations cap the total amount they can receive.
The 2014 Farm Bill retains planting restrictions for fruit, vegetables, and dry pulse crops (excluding mung beans and the dry pulse exceptions) on acres eligible for payments under Title I commodity programs (payment acres). Planting fruits, vegetables (other than mung beans and specified pulse crops) or wild rice on payment acres will result in an acre-for-acre reduction in payment acres, with two exceptions: (a) the restricted crops are grown solely for conservation purposes and not harvested for use or sale, or (b) they are double-cropped in a region with a history of double-cropping covered commodities with restricted commodities. In addition, features of the 2014 Farm Bill that are important to the Vegetable and Dry Pulse industries are under the following provisions of the Act: nutrition, research, pest/disease programs, trade assistance and conservation. Highlights include:
- Reauthorization of specialty crop block grants with increased funding and a formula to determine the funding amounts to the States based on production value and acreage. The Farm Bill included an authorization to set aside a portion of each year’s funding for multi-State projects.
- Expansion of the Specialty Crop Research Initiative (SCRI) and the Farmers Market and Local Foods Promotion programs.
- Expansion of the Fresh Fruit and Vegetable Program for schools; a pilot program will evaluate inclusion of canned, frozen, or dried fruits and vegetables in the program.
- Consolidation of the Plant Pest and Disease Management and Disaster Prevention Programs and the National Clean Plant Network; baseline funding is increased.
- Extension of funding through fiscal year 2018 for initiatives on market data and food safety education, as well as trade promotion programs including (a) the Market Access Program, (b) Foreign Market Development programs, and (c) the Technical Assistance for Specialty Crops program (Title III), which addresses sanitary, phytosanitary, and technical barriers to specialty crop exports.
More detail on these, and other existing federal programs that affect vegetable and dry bean markets, is included below.
By authority of the Agriculture Marketing Act of 1937 (Act), marketing orders and marketing agreements provide industries the ability to work collectively in stabilizing and enhancing market conditions for their fruit and vegetable products. These programs can use quality standards, volume restrictions, pack and container restrictions, or research and promotion programs to solve industry-wide marketing problems. In some cases, with section 8e of the Act, industries can also impose the same quality standards, established for the domestic market, on importers of a commodity into the United States. Programs are initiated based on requests from producers in an industry and maintained through regularly scheduled votes. Once established, a marketing order becomes binding on all individuals or businesses serving as "handlers" in a geographic area covered by the order. Handlers pay most of the fees to support the regulations.
Each industry chooses which of the above authorities to have promulgated into their marketing order or agreement to help address and resolve their industry’s specific marketing problems. For example, the Federal marketing order in place for Florida tomatoes covers the majority of fresh-market tomatoes produced in Florida between October and June. This marketing order authorizes handling requirements for quality by grade, size, and maturity; pack and container requirements; as well as production research, marketing research and development, and marketing promotion, including paid advertising. Quality requirements established under this marketing order are also applied to imported tomatoes between October 10 and June 15. Visit USDA’s Agricultural Marketing Service (AMS) website for more information about fruit, vegetable, and other specialty crop marketing orders.
Federally authorized 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 research, marketing and consumer outreach efforts to improve, maintain, and develop markets for agricultural commodities and products. There are over 20 national research and promotion programs serving a variety of commodity industries. Two of the programs currently in place cover potatoes and mushrooms.
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. The boards carry out their programs under Agricultural Marketing Service (AMS) oversight. For more information, visit the AMS website for the potato and mushroom program areas.
Specialty Crop Block Grant Program
The purpose of the Specialty Crop Block Grant Program is to provide grants to State Departments of Agriculture to enhance the competitiveness of specialty crops, with the amount of grants to a State based on production value and acreage. Specialty crops are defined as fruits and vegetables, tree nuts, dried fruits and horticulture and nursery crops, including floriculture. The Specialty Crop Block Grants facilitate partnerships between public institutions and industry in enhancing and promoting competitiveness of the horticulture sector.
After being launched by the Specialty Crop Competitiveness Act of 2004, the program was reauthorized in both the 2008 and 2014 Farm Bills. Funding was increased in 2014 and the program was extended to include authorization for multi-State projects. The multi-State component establishes the authority for collaboration to promote efficiencies in addressing issues such as food safety, plant pests and disease, and crop-specific projects that cross State lines.
Specialty Crop Research Initiative
The Specialty Crop Research Initiative (SCRI), administered by the National Institute of Food and Agriculture (NIFA), was established by the 2008 Farm Bill to address the critical needs of the specialty crop industry by awarding grants to support research and extension that address key challenges of national, regional, and multi-state importance in sustaining all components of food and agriculture, including conventional and organic food production systems. The 2014 Farm Act expands SCRI and provides for mandatory funding to avoid research disruptions.
USDA's Risk Management Agency administers crop insurance policies for many crops, including an increasing number of vegetables and pulses. Many vegetable and pulse policies have been created since the late 1990s, and can vary by State. Policies may cover a single commodity, regardless of its end use, or alternatively, may provide separate coverage for fresh and processing markets for crops like beans, sweet corn, and tomatoes. Under the 2014 Farm Bill, a Whole-Farm Revenue Protection pilot program offers coverage for all commodities on a farm, including specialty crops and organic commodities, under one insurance policy.
Federal crop insurance is purchased before the growing season and provides an indemnity payment if the farmer's actual yield falls below a predetermined guarantee. Private insurance companies sell and service the policies. Although crop insurance is not free to growers, the government subsidizes a significant portion of the insurance premium.
Vegetable growers who do not have established Federal crop insurance programs for their crops are eligible for Federal financial assistance under the Noninsured Crop Disaster Assistance Program (NAP), administered by USDA's Farm Service Agency. Many commodities in the vegetable industries have not been part of the Federal crop insurance program, and so growers of these commodities have relied on NAP. The amount disbursed to vegetable growers under NAP varies, depending on natural disasters (if any) affecting crops in a given year. 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 and the Disaster Debt Set-Aside Program.
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.
The Foreign Market Development Program, also administered by USDA's Foreign Agricultural Service, works with nonprofit U.S. agricultural trade organizations to develop, maintain, and expand long-term export markets for U.S. agricultural products. Program activities focus on reducing market impediments, improving the processing capabilities of importers, modifying restrictive regulatory codes and standards in foreign markets, and identifying new markets or uses for U.S. products.
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.
Domestic Feeding Programs
Each year, over one 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 population segments.
The Fresh Fruit and Vegetable Program provides funding to schools to buy fresh produce and give to children during non-meal periods. For the 2014-2015 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. A separate program allows schools to utilize the distribution system of the Department of Defense and USDA Foods entitlement dollars, to purchase fresh produce for use with school meals (including Food Distribution Programs on Indian Reservations). The 2014 Farm Act established a pilot program (Title IV) that allows schools in up to 8 States to use multiple suppliers and geographic preference in the procurement of unprocessed fresh fruit and vegetables for school feeding programs.
International Feeding Programs
The Food for Peace Program (PL 480) was first initiated in 1954 to promote the food security of developing countries. Dry pulses and vegetable oils have been an important part of PL 480 purchases with funding levels varying according to emergency needs. Emergency and Private Assistance Programs (Title II) are administered by the U.S. Agency for International Development (USAID) and implemented by private voluntary organizations (PVOs – e.g. not-for-profit, nongovernmental organizations registered with USAID), cooperatives and intergovernmental organizations (primarily the United Nations World Food Program).
For More Information...
- Fruit and Vegetable Backgrounder , April 2006
- 2008 Farm Bill Side-By-Side, August 2008