Marketing Orders
Research and Promotion
Crop Insurance and Disaster Assistance
Trade Promotion Programs

Vegetables and pulses are rarely part of mainstream farm policy debates because they grow on limited acreage and receive relatively small Federal budget outlays. Historically, Federal price and income support programs have not directly covered vegetables, with most outlays stemming from a variety of general, noncrop-specific programs.

However, dry peas, lentils, and small chickpeas became program crops in the 2002 Farm Act. In addition, the Food, Conservation, and Energy Act of 2008 (2008 Farm Act) includes large chickpeas (garbanzo beans) in some commodity programs. For the 2009-12 crops, producers of garbanzo beans will be eligible to receive marketing assistance loans and loan deficiency payments, as well as benefits from counter-cyclical payments (CCPs) or the Average Crop Revenue Election (ACRE) program. 

Loan rates for garbanzo beans (large chickpeas) are set at $11.28 per hundredweight (cwt) for crop years 2009-12, with target prices (used to calculate counter-cyclical payments; there are no direct payments (DPs) for pulse crops) set at $12.81 per cwt during the same period.

With the exceptions noted above, Federal price support programs have not included dry beans since the late 1960s. The 2008 Farm Act retains the longstanding provision on planting restrictions for dry beans (excluding mung beans and, beginning in crop year 2009, garbanzo beans/large chickpeas) on base acres. Planting dry beans (excluding mung beans and garbanzo beans/large chickpeas) on base acres is prohibited unless the producer or farm has a history of planting dry beans, but payments are reduced acre-for-acre on such plantings. Double cropping of dry beans is permitted without loss of payments if the region has a history of such double cropping.

The Food, Conservation and Energy Act of 2008 was a groundbreaking farm act for the U.S. fruit and vegetable industry. Over the life of the current Farm Act (fiscal years 2008-13), approximately $3 billion is dedicated to issues of importance to the industry. Fiscal years (FY) run from October 1 through September 30 of the designated year. These include programs covering nutrition, crop research, pest/disease programs, trade assistance, and conservation programs. In general, the legislation will help strengthen industry competitiveness in domestic and world markets.

Vegetable and dry bean markets are also influenced by a number of general programs, including the following:

• Federal marketing orders for potatoes (five), onions (four), and tomatoes (one);
• Federally sanctioned national research and promotion programs for potatoes, and mushrooms;
• Federal production assistance programs such as Federal crop insurance, disaster assistance, and western irrigation subsidies;
• Export programs such as the Market Access Program (MAP) include several vegetables and pulses; and
• Federal food purchase and donation programs such as the School Lunch Program and the Food for Peace Program (P.L. 480).

Marketing Orders

Marketing orders and marketing agreements are designed to help stabilize market conditions for fruit and vegetable products. The programs assist farmers by allowing them to work collectively to solve marketing problems. Industries voluntarily enter into these programs and choose to have Federal oversight of certain aspects of their operations.

For example, the only Federal marketing order in force for tomatoes covers the majority of fresh-market tomatoes produced in Florida between October and June. This order authorizes the handling of Florida fresh-market tomatoes by grade, size, quality, maturity, pack, and container. Grade, size, quality, and maturity requirements established under the order also are applied to tomatoes imported between October 10 and June 15 (under so-called 8e requirements), but the container and pack requirements are not. The order also provides authority for production research, marketing research and development, and marketing promotion, including paid advertising. Visit USDA's Agricultural Marketing Service (AMS) website for more information about fruit, vegetable, and other specialty crop marketing orders.

Research and Promotion

Federally sanctioned research and promotion programs allow industry-funded joint promotion and research of a commodity by growers/shippers. Programs are currently in place for potatoes and mushrooms. Research and promotion programs are intended to expand, maintain, and develop markets for individual agricultural commodities in the United States and abroad. The Secretary of Agriculture appoints national boards to carry out these programs. Membership may include producers, handlers, importers, and processors (depending on which industry members pay assessments to fund the programs), as well as public citizens. The boards conduct promotion, market and production research, and new product development under the supervision of AMS. For more information, visit the AMS web pages for the potato, watermelon, and mushroom program areas.

Crop Insurance and Disaster Assistance

USDA's Risk Management Agency administers crop insurance policies for many crops, including an increasing number of vegetables and pulses, many of which have been created since the late 1990s. Policies, which can vary by State, may cover a single commodity, regardless of its end use, or provide separate coverage for fresh and processing markets.

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 purchase crop insurance or 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. The program provides payments to qualified growers who lose at least 50 percent of their crops or are unable to plant more than 35 percent of their acreage because of a natural disaster. Payments are made on the loss exceeding 50 percent of expected production, based on producers' yield and production records. The amount disbursed to vegetable growers under NAP varies, depending on natural disasters (if any) affecting crops in a given year. Because many commodities in the vegetable and melon industry are still not part of the Federal crop insurance program, growers of such commodities rely on NAP.

In addition, vegetable producers are frequently eligible for financial assistance during years of extensive crop loss. Producers of insured crops (covered by a crop insurance plan or NAP) may be eligible for the Supplemental Agricultural Disaster Assistance and for ad hoc disaster aid.

Producers eligible for disaster assistance programs are can also apply for the Disaster Debt Set-Aside Program, whereby they may be allowed to set aside a portion of their Federal debt to maintain their farming operations. (For more information, see Ongoing Disaster Assistance Programs for Agricultural Producers.) Growers are also eligible for emergency loans and the Emergency Conservation Program.

Trade Promotion Programs

The Market Access Program (MAP), administered by USDA's Foreign Agricultural Service, provides matching grants to commodity marketing boards and cooperatives to help expand markets overseas for U.S. agricultural products. Regional trade promotion organizations may also be grant recipients. The industry will also likely benefit from allocations to State Departments of Agriculture and other industry or trade organizations.

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. Of the $34.5 million program total in FY 2008, about $321,000 went to the vegetable sector (the U.S. Dry Bean Council and the USA Dry Pea and Lentil Council).

The Specialty Crop Competitiveness Act of 2004 became law in December 2004, but was subject to appropriation of funds each year, which were minimal. The major focus of this legislation was to provide block grants through the various State departments of agriculture for planning and conducting research programs of importance to local producers and consumers of specialty crops. The 2008 Farm Act reauthorizes and extends this Specialty Crop Block Grant Program through FY 2012. (The 2004 law ran through FY 2009.) It also provides funding through the Commodity Credit Corporation (CCC) in the amounts of $10 million in FY 2008; $49 million in FY 2009; and $55 million per year during FYs 2010-12. Each State is to receive $100,000 or one-third of 1 percent of total funding for each fiscal year, whichever is higher.

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. The 2008 Farm Act funds the TASC program (through the CCC) in the amounts of $4 million in FY 2008, $7 million in FY 2009, $8 million in FY 2010, and $9 million for each of FYs 2011 and 2012.

For More Information...

• Fruit and Vegetable Backgrounder, April 2006
• 2008 Farm Bill Side-By-Side, August 2008

Last updated: Tuesday, October 09, 2012

For more information contact: Suzanne Thornsbury