Regional differences evident in debate over planting restrictions

by Jay Sjerven
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WASHINGTON — Two bills with opposing positions on whether restrictions on the production of fruits and vegetables for processing on farm program crop base acres should be lifted were introduced in the House of Representatives in March. Earlier, the Bush administration weighed in on the matter, with the U.S. Department of Agriculture’s 2007 farm bill proposal asserting the restrictions should be rescinded to make U.S. farm policy less vulnerable to challenge under World Trade Organization rules.

The Farming Flexibility Act of 2007 (H.R. 1371), known as Farm Flex, was introduced in the House of Representatives March 7 by Representatives Tammy Baldwin of Wisconsin, Mike Pence of Indiana, Timothy Walz of Minnesota and Ray LaHood of Illinois. The bill is supported by Midwestern farm organizations and food processing industries.

Under Farm Flex, producers would not receive direct payments authorized under the current farm law on any base acres of a program crop — corn, wheat, rice, cotton, oilseeds — given over to the production of fruits and vegetables for processing. At the same time, producers would not jeopardize their crop base for future commodity program enrollment should they forgo direct payments on base acres planted to fruits and vegetables for processing in any year or span of years. Additionally, farmers would not have to pay a financial penalty based on the market value of the fruits and vegetables they plant on base acres as is required under the Farm Security and Rural Investment Act of 2002.

In testimony last September before the House Agriculture Committee in support of similar legislation introduced in the last Congress, Paul Palmby, executive vice-president and chief operating officer, Seneca Foods Corp., said that since 1996, farm laws have restricted the production of fruits and vegetables on base acreage. It was not a significant problem for Midwestern fruit and vegetable production until the 2002 farm act made soybeans a program crop. Mr. Palmby said the action resulted in practically all of the quality farmland in the Midwest acquiring a program base, dramatically reducing land available for fruit and vegetable production.

Ms. Baldwin said in introducing H.R. 1371, "Farm Flex is a long overdue correction that benefits both family farmers and food processors in the Midwest."

Mr. Walz said, "Not only will Farm Flex benefit producers who grow fruits and vegetables under contract by removing penalties for growing those crops, but it will also help reduce farm program payments for the acreage planted in fruits and vegetables."

Representatives Dennis Cardoza of California, Adam Putman of Florida, John Salazar of Colorado, Randy Kuhl of New York, Rick Larsen of Washington and Kevin McCarthy of California introduced the Equitable Agriculture Today for a Healthy America Act (EAT Healthy America Act) on March 21. The 120-page bill included a provision stating the competitiveness of U.S. specialty crop producers depends on maintaining current restrictions prohibiting "the planting of fruits and vegetables and other specialty crops on acres for which a producer receives direct payments or counter-cyclical payments, including not allowing any temporary loss in program benefits as a remedy for one-year or other short-term shifts to specialty crops."

The Specialty Crop Farm Bill Alliance, a coalition of more than 90 specialty crop producer organizations, supports the EAT Healthy America Act, including its continued restrictions on fruit and vegetable planting on program crop acres. The alliance stated, "Producers of non-subsidized crops should not have to compete with producers who receive a government subsidy for past or current activities conducted on those acres … Recent economic research predicts that even a 1% increase in fruit and vegetable planting would result in no less than a 4% decrease in prices. The supply and demand imbalance would quickly depress prices, deteriorate any grower profitability, and ultimately place their survival into jeopardy."

Deputy Secretary of Agriculture Chuck Conner testifying before the House Committee on Agriculture subcommittee on horticulture and organic agriculture Feb. 28, pointed out the W.T.O. has raised questions as to whether planting restrictions on base acres that are tied to commodity payments puts the U.S. direct payment support for wheat, rice, grain sorghum, barley, oats, peanuts, corn, cotton and oilseeds outside the W.T.O. green box.

Mr. Conner said according to a study by the Economic Research Service, new entrants to the specialty crop business have been relatively few in number, not because of planting restrictions but for reasons related to the specialty crop business itself, including the need for special equipment and expertise for producing and marketing specialty crops and higher production costs.

This article can also be found in the digital edition of Food Business News, April 3, 2007, starting on Page 24. Click here to search that archive.

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