Fruit and Vegetable Policy Part II - Policy Issues and Outcomes

Last week I discussed some of the key programs that shape fruit and vegetable production policy in the US: marketing orders, market access programs, national purchasing programs, and the Specialty Crops Competitiveness Act. These programs, as well as the absence of other types of programs and restrictions on production, play a major role in shaping production of fruit and vegetables in the US.

As an example of the significance of federal support in shaping agricultural production, we can look at dry peas and lentils. Prior to the 2002 Farm Act, peas and lentils were regulated as vegetables and pulses and did not receive Federal Commodity Support. The Farm Security and Rural Investment Act of 2002 introduced a Marketing Loan Assistance Program for these crops, which provides loan deficiency payments or marketing loan gains to farmers if market prices fall below commodity loan rates. This program reduces revenue risk associated with price variability. In the following three years, dry pea planting area increased by 156% and area planted to lentils doubled.

A USDA Economic Research Service paper comparing the US and Canadian dry pea and lentil sectors further highlights the importance of this change. They explain that since the 2002 Farm Bill was not signed into law until mid-May, it was too late for farmers to know with certainty what the marketing loan rates would be before making planting decisions, so effects of the change are not significant until the following production year. The point is that there is a close connection between policy and planting decisions - farmers were paying a lot of attention to these developments. This is a great example of how policy directly influences what farmers decide to plant, and thus, what is produced and available to consumers in the US and around the world.

Current Fruit and Vegetable Policy Discourages Production

            Current debates on fruit and vegetable policy center on the planting flexibility restrictions that apply to program crop base acres. Here’s what that means: farmers planting land with a history of program crop production (corn, soy, cotton, rice and other plants that are part of commodity support programs) can use that land to plant other crops than those for which they receive government support, without losing the payments. Other crops, that is, except fruit and vegetables: farmers who plant them are no longer eligible for program support (keep in mind that the cost of production for some commodity crops is higher than market prices – no one wants to lose the subsidies). This has the effect of discouraging fruit and vegetable production by limiting available land and discouraging more farmers from entering production, and thus, keeping prices higher. According to an agricultural policy analyst I spoke with a few weeks ago, this arrangement emerged as a compromise with the fruit and vegetable industry to protect their production, since they don’t receive the same kind of supports as program crops.

While this restriction had been in place since 1990, it became more significant in 2002, when soybeans and other oilseeds became program crops. This significantly restricted the land supply and increased financial difficulties for new and expanding fruit growers. According to agricultural economists at Purdue University, “the addition of soybeans as a base eligible crop has unintentionally removed thousands of Midwestern acres previously available for fruit and vegetable production” (Althoff and Gray 2004). If farmers want to plant fruits, vegetables, or tree nuts on program land, they have the choice of removing their farm from subsidy programs, or face penalties for planting fruits and vegetables on subsidized land – permanently losing the direct payments.

It’s understandable why the fruit and vegetable industry would have supported this kind of policy (although many producer growers who want to expand are frustrated too), but it is detrimental to American consumers. Policy analysts have concluded that this policy discourages fruit and vegetable production on a national level. The policy expert I mentioned above spoke in one of my classes on these fruit and vegetable planting restrictions. I asked, “is this policy a major impediment to producing more fruits and vegetables and making them more affordable and accessible to Americans?”

He responded, “Yes, I would say that it is.”

            This is a huge problem! Americans eat less than half of the recommended daily fruit and vegetable intake, and much more sugar, refined grains, saturated fat, and cholesterol than we should. We are not growing what we should be eating: farm policy encourages cheap corn, used primarily for ethanol and animal feed (making meat production cheaper), as well as high-fructose corn syrup (also made artificially cheap), and cheap soy, used almost entirely for animal feed. Planting restrictions on fruits and vegetables should be removed or greatly reduced, and increased federal support should be provided for the fruit, vegetable, and tree nut sectors in the form of marketing programs, increased federal purchasing where demand exists, and more comprehensive crop insurance.

Most “specialty crops,” as they are called, are not eligible for insurance under Title XII of the Farm Bill - 80% of policy premiums go to four commodity crops: corn, soy, wheat, and cotton. Farmers growing eligible commodity crops have 62% of the premium covered for them by the federal government – aka, us. According to the USDA Economic Research Service, 75 to 80% of eligible corn, wheat, soy and cotton acreage is insured, encouraged by premium subsidies, compared with 49% of the harvested area on specialized farms. There is good news though: there are now federally subsidized insurance programs for over 40 different fruit, nut, and vegetable crops. Providing these kinds of programs decreases the financial risk associated with perishable crops and makes them more available and affordable.

There are other positive developments too: the Agricultural Act of 2014, passed in the House and set for a vote in the Senate on Wednesday, increases funding by 55% for produce industry initiatives and programs. This includes maintenance of the Fresh Fruit and Vegetable purchase program and the Market Access Program, support for research and state grants, and a fruit and vegetable incentive program for SNAP recipients (the Supplemental Nutritional Assistance Program, often called food stamps, accounts for two-thirds of farm bill funding and provides assistance to elderly and low-income Americans - funding for it was cut by $8 billion in the 2014 bill). The Specialty Crop Farm Bill Alliance, which represents more than 120 fruit, vegetable and tree nut organizations from across the country, supports the Act and applauded the investment made by Congress in specialty crop production and promotion. The American Farm Bureau Federation also expressed support for the bill, saying, "We are particularly pleased with provisions to provide risk management to fruit and vegetable farmers..."
We can hope to see more developments like this in coming years.

And now, some more fruit and vegetable recipes!

Green Mango Salad

·      Two very firm green mangos

·      Juice of one lime

·      ½ cup toasted cashews

·      2 green chilies, minced

·      Cilantro, roughly chopped

·      Salt to taste

Directions

1. Peel the mangos and grate them on the largest holes of a box grater.

2. Add to a bowl and toss with the lime juice and chilies. Sprinkle the cashews and cilantro over the top, and add salt to taste. Serve.

Caramelized Figs

Slice fresh figs in half and place cut side down in olive oil heated over medium heat. Allow to cook, shaking gently every minute or so, until they turn golden brown. Flip over and continue cooking until the back side is slightly browned and wrinkled. Serve with shavings of manchego or another aged Spanish cheese or over ice cream.