Impact of eliminating acreage protection for specialty growers

Earlier this month, the USDA Economic Research Service (ERS) released a report titled: “Eliminating Fruit And Vegetable Planting Restrictions: How Would Markets Be Affected?”

Essentially, growers are penalized if they produce any of a wide range of fruit and vegetable crops (including wild rice) on what are considered program acres. At one time, the penalties for violating this rule were severe, although a few years ago the government reduced them substantially.

The research turned up some numbers that even surprised its authors, according to an interview conducted by Keith Good, an economist, attorney and policy analyst (see his web site, farmpolicy.com). Good spoke with Edwin Young, one of the report's authors, and you can find a link to the audio file of the interview by clicking here.

Among other things, Young said that there is a significant “overlap” between growers who produce fruit and vegetable crops and those with program acreage. About 50% of the farmers raising fruits and vegetables also are enrolled in conventional row-crop programs. They account, in fact, for about 80% of all fruit and vegetable production in this country. Shifting program acreage to fruit and vegetable production means that a grower must forfeit program payments for that year on the land he shifts. About 5% of fruit and vegetable production during one period analyzed in the report was, in fact, on program acreage that fell into this category..

Restrictions on planting fruits and vegetables on program acreage has been seen as a kind of hidden subsidy for these producers. They don't receive direct government payments, but planting restrictions have ostensibly kept farmers in the program from shifting land into specialty crops. Critics have likened it to granting specialty crop growers a smaller group of competitors, which in theory would maintain stronger pricing for they produce.One challenge before the World Trade Organization has sought to eliminate this restriction, Cook noted in his report.

The USDA-ERS study examines the overall impact that eliminating the restriction might have.

The report can be downloaded as a PDF file by clicking here.