Agricultural Economic Report No. (AER-707) 42 pp

May 1995

Federal Marketing Orders and Federal Research and Promotion Programs: Background for 1995 Farm Legislation

This report address considerations in the 1995 farm bill debate for milk, fruits, vegetables, and specialty crops, including market conditions, policy proposals, and the interactions between policy and markets for selected commodities. Federal marketing orders and Federal research and promotion programs are self help programs proposed by agricultural commodity industries and authorized by Federal legislation. Marketing orders have proven a durable fixture in U.S. agricultural policy, especially for milk, fruits, vegetables, and specialty crops. Since 1980, however, 12 of the 47 Federal marketing orders for fruits, vegetables, and specialty crops have been terminated; 2 were added. New Federal research and promotion programs have begun; of the 18 operating in 1994, 14 were established since 1982. With budget limitations expected to constrain agricultural programs in the 1995 farm bill debate, these self-help programs are perhaps under less pressure than some others because they involve only administrative costs, much of which are reimbursed to the Government from assessments on producers, handlers, and importers. Issues with marketing orders include user fees to recover administrative costs, streamlining the rulemaking process, strengthening compliance and enforcement efforts, and resolving concerns of equitable treatment of all handlers within regulated commodity industries. Issues for research and promotion programs deal with governance of the programs and evaluation of their effectiveness.

Keywords: marketing orders, research and promotion programs, checkoff programs, self-help programs, generic advertising, export promotion

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