Federal Farm Policy and Domestic Federal Farm Policy and Domestic Policy Support for Mediterranean Policy Support for Mediterranean

ProductsProducts

Jay E. NoelJay E. Noel

Director, California Institute for the Study of Director, California Institute for the Study of Specialty CropsSpecialty Crops

California Polytechnic State UniversityCalifornia Polytechnic State University

Cal-Med Consortium Workshop II

December 7-8 Washington D.C.

Production LocationProduction Location

Acreage and Value of ProductionAcreage and Value of Production20052005

Federal Farm Policy Support of U.S. Federal Farm Policy Support of U.S. Mediterranean CropsMediterranean Crops

Assistance for LossesAssistance for Losses

Crop Insurance: 44 crops covered; Crop Crop Insurance: 44 crops covered; Crop insurance subsidy $424 millioninsurance subsidy $424 million

Market Loss Payments: Ad Hoc Market Loss Payments: Ad Hoc payments. Examples include Apples payments. Examples include Apples $269 million in 1999 and 2000; Pecans $269 million in 1999 and 2000; Pecans $8.5 million 2005; cumulative total of $8.5 million 2005; cumulative total of ~$20 billion since 1988~$20 billion since 1988

Marketing Marketing

Marketing Orders and AgreementsMarketing Orders and Agreements

Generic Promotion, Research and Information Programs Generic Promotion, Research and Information Programs (Check-off Programs)(Check-off Programs)

A number of studies have shown positive cost/benefit returns to A number of studies have shown positive cost/benefit returns to marketing order and check-off programs- Examples include marketing order and check-off programs- Examples include Williams (benefit-cost ranges of 12 to 27 for differing crop and Williams (benefit-cost ranges of 12 to 27 for differing crop and marketing order activities); Carman (Avocado producers gained marketing order activities); Carman (Avocado producers gained an additional $70.4 million in revenues for $7.86 promotional an additional $70.4 million in revenues for $7.86 promotional spending)spending)

Williams, Gary. “FAIR Reviews and Economic Returns Analyses as Strategic Marketing/Management Tools”, 2004 Marketing Order Management Conference, San Antonio, Texas, September 29, 2004.

Carman, Hoy F. “Offsetting Price Impacts from Imports with Generic Advertising and Promotion Programs: The Hass Avocado Promotion and Research Order”, Review of Agricultural Economics, Vol. 28, No. 4, 2006. see also Carman, Hoy F. and R. Kim Craft. “An Economic Evaluation of California Avocado Industry Marketing Programs, 1956 – 1995”, NICPRE Quarterly, Vol. 4. No. 3, 1998.

MarketingMarketing Export Promotion- Market Access Export Promotion- Market Access

Promotional Program Promotional Program $138.5 million allocated by USDA, Foreign $138.5 million allocated by USDA, Foreign

Agricultural Service in 2005 to promote Agricultural Service in 2005 to promote Mediterranean type crops.Mediterranean type crops.

Food Purchases Food Purchases USDA, Agricultural Marketing Service (AMS) USDA, Agricultural Marketing Service (AMS)

domestic purchases of fruits and vegetables domestic purchases of fruits and vegetables were $445.8 million in 2004 and $375 million were $445.8 million in 2004 and $375 million in 2005.in 2005.

MarketingMarketing Food Assistance and NutritionFood Assistance and Nutrition

National ResearchNational Research USDA, Agricultural Research Service (ARS) allocated

~$160.4 million or 33.7% of its FY 2005 $476.1 million budget to fruits, nuts and vegetable research.

USDA, Cooperative State Research, Education and Extension (CSREES) FY Budget invested approximately $79.6 million to support research, extension and education focused on fruits, nuts, and vegetables representing about 7.2% of a total budget of $1.1 billion.

USDA, Economic Research Service (ERS) in FY 2005 budgeted $542,000 to staff and overhead costs for specialty crops research and $165,800 to cooperative research agreements with external collaborators representing ~ 1% of its $74 million.

Other Federal SupportOther Federal Support

Mediterranean Products Planting RestrictionsMediterranean Products Planting Restrictions

USDA, Animal and Plant Health Inspection USDA, Animal and Plant Health Inspection Service (APHIS)Service (APHIS)

Difficult to isolate APHIS budgetary outlays that Difficult to isolate APHIS budgetary outlays that address pest and disease activities that relate address pest and disease activities that relate specifically to Mediterranean products. There is specifically to Mediterranean products. There is annual appropriation of $60 million for the fruit fly annual appropriation of $60 million for the fruit fly exclusion and detection program and $18 million is exclusion and detection program and $18 million is budgeted for trade issues management and resolution. budgeted for trade issues management and resolution. The total FY 2006 budget for APHIS activities is $306 The total FY 2006 budget for APHIS activities is $306 million.million.

Other Federal SupportOther Federal Support

Specialty Crop Block Grants to the StatesSpecialty Crop Block Grants to the States

The Emergency Agricultural Assistance Act (EAAC) of 2001 provided states with block grants to promote specialty crops. provided almost $160 million to all 50 states and Puerto Rico.

Specialty Crop Competitiveness Act (SCCA) of 2004 (PL 108-465). The SCCA block grants are to support programs in research, marketing, education, pest and disease management, production, and food safety. The initial legislation (HR 3242) called for a mandatory annual appropriation of $470 million in mandatory funds from the Commodity Credit Fund to support the block grant program. The final bill authorized the program subject to annual appropriations, and limited funding to $44.5 million per year ($7 million was appropriated in FY 2006).

HR 6193 “Equitable Agriculture Today for HR 6193 “Equitable Agriculture Today for a Healthy America Act” or the “Eat Healthy a Healthy America Act” or the “Eat Healthy America Act”America Act” Objective: permanently incorporating specific specialty Objective: permanently incorporating specific specialty

crop programs into federal farm legislation.crop programs into federal farm legislation. Support: Over 70 U.S. specialty crop organizations Support: Over 70 U.S. specialty crop organizations

representing producers of fresh fruit, dried fruit, tree representing producers of fresh fruit, dried fruit, tree nuts, and other specialty crops.nuts, and other specialty crops.

The Bill contains eight titles that provide for government The Bill contains eight titles that provide for government support for specialty crop block grants, disaster support for specialty crop block grants, disaster assistance, conservation, international trade, pest and assistance, conservation, international trade, pest and disease control, nutrition, research and development, disease control, nutrition, research and development, renewable energy, and miscellaneous issues renewable energy, and miscellaneous issues

The 2007 Farm Bill and Mediterranean The 2007 Farm Bill and Mediterranean ProductsProducts