Specialty Crops Competitiveness Act of 2004

Mr. Speaker, I rise today in support of H.R. 3242, the Specialty Crop Competitiveness Act of 2004.

The specialty crop sector is comprised of a diverse group of commodities produced across the Nation and is a vital portion of our agricultural community. Because of their hard work, Americans have access to a healthful and wholesome diet which includes fruits and vegetables. The 6th District of Virginia, which I represent, is home to a wide variety of these

producers. They are part of the larger specialty crop sector, which makes the United States the second largest importer and exporter of fruits, nuts, vegetables and other horticultural products.

I would like to take the opportunity to commend Mr. Ose of California for his commitment to the fruit and vegetable sector. His hard work with the industry, as well as his colleagues here in Congress, has been fundamental to moving this bill forward. Mr. Ose has diligently represented his constituents and I am sure they will miss his leadership upon his retirement.

H.R. 3242 is the culmination of many months of hard work in developing a consensus document. While the markup of this legislation proceeded quite smoothly, it did outline some issues that need additional attention.

However, it is clear from the quality of the discussion among Committee Members, that we understand the importance of the specialty crop sector in production agriculture.

I believe this bill represents a first step in what will undoubtedly be a lengthy conversation leading up to the next Farm Bill. Some issues in this bill will likely be revisited as we proceed forward with this process. For example, I still have some reservations about the block grant system and whether or not it is the best way to address the long term goals of the agriculture community. However, I remain open to further consideration of this point and I believe this is a good faith effort to begin the conversation about improving the competitiveness of specialty crop producers in the context of the Farm Bill.

Again, I'd like to thank Mr. Ose for his commitment to this complex effort and would like to reiterate my support for passage of H.R. 3242.

Mr. CARDOZA. Mr. Speaker I rise in support of H.R. 3242, the ``Specialty Crop Competitiveness Act''.

While I remain concerned about the funding levels--my colleagues from California, Mr. Ose and Mr. Dooley, must be commended for their dedication and hard work over the past year on this legislation to bring the specialty crop industry long overdue recognition from Congress.

I especially want to mention my strong support for provisions in the bill that address methyl bromide use by specialty crop growers. Continued use of methyl bromide as a fumigant is of utmost importance to a number of crops in my district and throughout California and I greatly appreciate the House Agriculture Committee bringing this issue to the forefront of the debate.

As you may know there are over 250 specialty crops produced in the United States and the industry as a whole is vitally important to the continued prosperity of our farm economy. In 2002, specialty crops had a collective value of nearly $52 billion or about 53 percent of the value of all agricultural crops. Their farm-gate value continues to rise as growers throughout the United States consistently produce the most abundant, highest quality crops of their kind in the world.

Currently however, specialty crops do not enjoy the same support from the Federal Government as do traditional ``program'' crops. Their main source of government assistance is not through marketing loans, direct payments, or counter-cyclical payments but instead they are supported--albeit in much smaller proportions--through programs like the Market Access Program, conservation programs like EQUIP, and through research funding.

The honest truth is that the majority of the specialty crop industry does not want a traditional subsidy program as cotton, corn, rice and others enjoy. Instead, they simply desire a seat at the table and recognition for their hard work and contribution to the farm economy. H.r. 3242 does just that, it improves upon previous Farm Bill programs aimed at specialty crops and proposes a reinvigorated block grant program that will allow each State Department of Agriculture to apply for, and administer, marketing assistance programs tailored specifically to the needs of their respective crops.

This legislation could not come at any better time. As many of you know, specialty crop growers across the United States are currently in the midst of an industry crisis. They are facing a number of challenges in international trade, caused by lack of market access, rapidly increasing import competition and efforts by our trading partners to keep our products out of their markets. Additionally, our foreign competitors routinely employ considerably cheaper labor and liberally use pesticides that are banned here at home.

In my home State of California, the situation worsens. Growers are constantly dealing with new environmental regulations, which often require costly compliance measures such as purchasing new equipment and machinery or applying for Federal and State permits. Furthermore, the cost of land, water, labor and pesticides are significantly higher in California compared with other larger specialty crop States. It is no wonder that prime agricultural land is disappearing at such a rapid rate, right before our eyes.

H.R. 3242 will finally direct Federal support to specialty crop growers in a proactive manner, to promote consumption of specialty crops at home and abroad and increase the competitiveness of growers in the aggressive global market.

One of the key components to H.R. 3242 is Title 1, the Specialty Crop Block Grant program. In 2001, Congress approved a block grant program from which California received roughly $64 million and one of the first things I did as a member of Congress was to convene a forum of California's specialty crop industry to determine how the program was implemented and what the benefits were. The results were outstanding-- milk vending machines were placed in schools, the California Grown program was a success, research programs for pest disease and prevention were completed and countless other important programs were funded for the first time in decades. Block grants worked in California and they will work in the United States but they only work if we adequately fund them.

There is no doubt in my mind that my colleague from California, Mr. Ose, fought the good fight to retain the full authorization included in the original Specialty Crop Competitiveness Act but the bill we are voting on tonight falls pathetically short of what is needed for this industry. The original H.R. 3242 allocated $470 million for the specialty crop block grant program, a number that may seem substantial at first but that one that is dwarfed by the billions of dollars spent annually on program crops. It is unfortunate that important legislation such as H.R. 3242 was not adequately funded and I remain committed to rectifying this inequity in the future.

Regardless of my concerns, I will be support H.R. 3242 tonight. I firmly believe that H.R. 3242 is an important first step in acknowledging the strength and important of our Nation's specialty crop industry and I urge my fellow members of the House of Representative to join me in approving this important legislation.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 3242) to ensure an abundant and affordable supply of highly nutritious fruits, vegetables, and other specialty crops for American consumers and international markets by enhancing the competitiveness of United States-grown specialty crops, and for other purposes, as amended.

Mr. Speaker, I yield myself such time as I may consume.

(Mr. OSE asked and was given permission to revise and extend his remarks, and include extraneous material.)

Mr. Speaker, I will include in the Record at this point an exchange of letters between the Committee on Agriculture and the Committee on Ways and Means regarding H.R. 3242.

House of Representatives,

Committee on Ways and Means,

Washington, DC, October 6, 2004.

Hon. Bob Goodlatte,

Chairman, Committee on Agriculture, Longworth House Office

Building, Washington, DC.

Dear Chairman Goodlatte: I am writing concerning H.R. 3242,

the ``Specialty Crops Competitiveness Act of 2004,'' which is

scheduled for floor consideration today.

As you know, the Committee on Ways and Means has

jurisdiction over matters concerning the Office of the United

States Trade Representative (USTR). Section 301 of the

introduced bill establishes at least one position within the

USTR having sole responsibility over trade matters concerning

specialty crops, and thus falls within the jurisdiction of

the Committee on Ways and Means.

Because you have removed this provision during Committee

action, and in order to expedite this legislation for floor

consideration, the Committee will forgo action on this bill.

This is being done with the understanding that it does not in

any way prejudice the Committee with respect to the

appointment of conferees or its jurisdictional prerogatives

on this or similar legislation.

Thank you for your letter which confirms this understanding

with respect to H.R. 3242, and I would ask that a copy of our

exchange of letters on this matter be included in the

Congressional Record during floor consideration.

Best regards,

Bill Thomas,

Chairman.

Mr. Speaker, I yield myself such time as I may consume.

(Mr. OSE asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I want to recognize the able assistance of certain members, both majority and minority staffs, specifically Brent Gattis and Elizabeth Parker on the majority staff, and Ms. Lisa Kelley on the minority staff.

Mr. Speaker, I rise today in strong support of the United States speciality crop industry; an industry united behind a strong beginning to what will eventually become great changes in the history of Federal agricultural policy. I rise to support H.R. 3242 and a united specialty crop industry.

This industry is comprised of fruits and vegetables, nuts and nursery crops as well as many other agricultural niche markets. This industry represents the largest farm gate value in the country, $58.7 billion according to USDA's Economic Research Service. It also represents the largest nutritional value in the Nation, providing over 60 percent of the recommended daily servings for the United States. This industry does not receive price support payments and is frequently subjected to foreign price support mechanisms. Due to the industry's diverse array of products, the specialty crop industry in the United States faces a higher number of emerging pests and diseases every month than any other market in the world. This problem is compounded by frequent trade restrictions and the imposition of sanitary and phytosanitary barriers placed on our commodities to protect other countries from the very pests we are attempting to keep out of our borders. Despite these sweeping problems, the growers, shippers, and packers remain committed to participating in this vital agricultural sector.

For these reasons I introduced H.R. 3242, along with my colleague, Cal Dooley. This bill seeks to expand on successful domestic policies, not by undermining our neighbors here at home, but by beating back the competition that seeks to crush our domestic producers. The concepts contained within H.R. 3242 are about exporting product; the movement of product out of the United States, to meet the global competition head on. To liberalize trade outside the boundaries of the United States and within, our domestic producers must be given the proper tools to compete. A viable specialty crop industry is imperative to maintaining the concept of liberalized trade.

The future of U.S. agriculture, both at home and abroad is entirely dependent on the industry as a whole cooperating and communicating to build successful Federal policies together. Fighting here at home amongst ourselves diminishes the strength of a U.S. domestic policy and makes us vulnerable to our competitors who view this as weakness. This industry must learn to beat back competitors together, accomplish objectives together, and ultimately take back the market share that has been lost.

This is a small step, however significant to giving a sector of the industry the opportunity to compete globally, export internationally, and create or expand niche markets here at home. H.R. 3242 also provides a venue for an exchange of ideas on different levels of success in all areas of agriculture. This bill that I have offered here today seeks to lay a foundation for success for all of our producers.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

I am familiar with the marvelous bounty of the previous speaker's district, and I understand his concern. I welcome his cosponsorship of this bill because it has been an important part of our success.

I also want to make sure that all parties know the integral part that the chairman and the ranking member played in getting this bill to this point. They have been most accommodating in providing us with guidance and insight as to the art of the possible, and I think we have achieved that.

I know that everybody on the committee when we had markups spoke very positively about the days ahead, as we work together within the agricultural family so that all of our producers have the opportunity to succeed.

Mr. Speaker, I have no additional speakers, and I reserve the balance of my time.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on H.R. 3242, the bill under consideration.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I rise in support of H.R. 3242, the Specialty Crops Competitiveness Act of 2004, albeit with reservations about the scaled down version of the substitute bill that comes before us today.

When I joined Representative Doug Ose last year in introducing H.R. 3242, it was a natural reflection of my longstanding interest in a prosperous and competitive specialty crops sector.

U.S. farm policy has long overlooked the importance of specialty crops, despite the fact that these non-subsidized crops account for the majority of crop production in this country. Instead, U.S. farm policy has tended to focus on so-called ``program'' crops, such as cotton, rice, sugar, peanuts, wheat, corn, oilseeds, feed grains, and others, which account for less than half of domestic production.

H.R. 3242 was introduced not to bring fruits, vegetables, tree nuts, and other horticultural products into the category of ``program commodities'' but instead to focus federal attention and resources on the problems facing this segment of U.S. agriculture. The bill as introduced included various regulatory reforms as well as a modest level of federal dollars to invest in non-market-distorting ways in the competitiveness of the U.S. specialty crop sector.

As the lead Democrat sponsor of H.R. 3242, however, I am very disappointed that the version of the bill that moved out of the House Agriculture Committee and is before us today is significantly scaled down from the original bill. In particular, the federal funding provided by this substitute bill has gone from a mandatory spending level of $508 million per year for five years, to a discretionary authorization of only $54 million per year that is further subject to annual appropriations.

This is a far cry from the level of federal commitment to the specialty crop sector that is warranted.

Specialty crops have an annual farm-gate value of $52 billion and receive no federal subsidies. Program crops, on the other hand, have a farm-gate value of only $48 billion. Yet the program commodities received federal subsidies in the amount of $12-13 billion, the equivalent of 27 percent of their farm-gate value.

This bill does not change the fact that producers of specialty crops receive no federal subsidy payments, and instead rely solely on the market for their income. No new federal price supports, direct payments, marketing loans, or counter-cyclical payments are created in this bill.

A serious federal commitment to this sector, however, requires a serious level of federal dollars.

The bulk of federal expenditures under H.R. 3242 would go to a block grant program that would distribute federal dollars to interested states for research, marketing, promotion, and other competitiveness- enhancing programs for their specialty crop industries. These funds are designed to increase consumer awareness and demand for specialty crop products and

otherwise strengthen U.S. producers' ability to supply a safe, nutritious and quality product to both domestic and foreign markets.

Unfortunately, the bill as amended drastically reduced the federal commitment to this block grant proposal, from $470 million in mandatory spending down to $44.5 million in discretionary spending.

During the Agriculture Committee's markup of this bill, I attempted to restore merely half of the mandatory funds provided under the original bill for the block grant program. In order to keep the legislation revenue-neutral from a budgetary standpoint, I offered two separate alternative offsets--one based on a small, pro rata reduction in direct fixed payments to program commodity producers, and the other based on a bipartisan payment limitations proposal pending in the Senate (S. 667).

My amendment to finance the cost of a mandatory $220 million per year block grant program for specialty crops would have reduced the annual federal subsidies received by program crops by merely 1.7 percent. As a percent of program crop gross income, this represents a 0.36 percent reduction. Yet even this minuscule reduction encountered strong resistance by those farm and commodity organizations benefiting from these federal subsidies today.

The inequitable distribution of federal expenditures between program commodities and non-subsidized specialty crops must be changed. The United States can no longer afford to short-change the majority of its crop producers who rely on market forces--not federal program payments--to drive their income. The fact that the current farm bill, enacted in 2002, does not expire until 2007 is no excuse for not reallocating a small portion of federal expenditures by less than 2 percent.

Some of my colleagues seek to support the specialty crop sector without simultaneously disturbing the enormous benefits enjoyed by the program commodities. However, federal dollars are scarce resources and a more equitable distribution of these limited resources is long overdue. I hope my colleagues will eventually agree.

In the meantime, I urge adoption of this legislation today and hope that it will lay an effective foundation for a stronger federal investment in our specialty crop sector in future years.

Mr. Speaker, I am pleased to become a cosponsor of the ``Specialty Crop Competitiveness Act of 2003,'' H.R. 3242, legislation designed to maintain a viable and competitive specialty crop industry in the United States.

It is important to first note that an abundant, affordable supply of highly nutritious fruits, vegetables and other specialty crops is vital to the health of all Americans. Increased consumption of fresh produce will provide tremendous health benefits to consumers, as well as economic benefits to American farmers.

It follows that a competitive specialty crop industry is necessary to produce and sustain a safe and nutritious domestic food supply. A competitive specialty crop industry is also necessary to sustain the economic vitality of rural communities in northern California, and indeed throughout the entire nation.

Unfortunately, it is becoming increasingly difficult for U.S. producers to compete against heavily subsidized foreign producers in domestic and international markets. For example, the European Union provides subsidies of about $11.7 billion per year to its specialty crop growers, while U.S. specialty crop growers receive no subsidies. In addition, U.S. specialty crop growers continue to face tariff and non-tariff trade barriers in many export markets, thus making it virtually impossible for our growers to improve sales through increased exports. In turn, production costs have escalated due to increased environmental and other regulations, and important crop protection tools have been lost, thus making it increasingly difficult to operate profitably.

Specialty crop growers from California and across the country believe federal agriculture policy must address the myriad of unique challenges facing their industry to assure its long-term viability. As such, they have joined together to craft H.R. 3242, and have requested my support.

The bill is designed to increase exports of U.S. specialty crops, improve efforts to protect agriculture from damaging pests and diseases, and provide funding for research necessary for improving the competitiveness of the industry. The activities authorized by this legislation represent a prudent investment in the future success of our $58.7 billion specialty crop industry.

The cost of the bill is relatively modest when compared with other agriculture programs and most other federal programs. Nevertheless, it continues to be critically important, especially during this period of budget deficits and increased spending for our ongoing War on Terrorism and homeland security, for Congress to restrain federal spending. As such, I want to work with the bill's supporters to find acceptable offsets and/or savings from other federal programs that will ensure that the funding authorized under this legislation fits within the existing budget.

I look forward to working with the sponsors of the bill, Congressman Doug Ose and Congressman Cal Dooley, toward future House consideration of this important bill for California agriculture.

Mr. Speaker, I thank the gentleman for yielding me time.

I want to thank the sponsors of this bill, the gentleman from California (Mr. Dooley) and the gentleman from California (Mr. Ose), for introducing H.R. 3242, of which I am an original cosponsor.

I stand as the representative of the most productive agricultural land in the world. It is in the State of California, and it is the Central Coast Valley. We produce what this bill is talking about, specialty crops.

Specialty crops are essentially those crops that we eat every day in salads, the lettuce, the artichokes, the strawberries, the grapes. We grow flowers. We grow everything that is not essentially in the commodity world, and we grow that just with market forces; that is, if there is not a good price for the crop, the farmer loses.

So what this bill does is bring the specialty crop, which frankly last year made more money than the commodity crops did, and California being the leading State, and almost all of the agriculture in California is in specialty crops, it is a remarkably important bill for our State and for all the people of the country who are in farming in specialty crops, as the gentleman from Texas (Mr. Stenholm) pointed out.

Our specialty crops have no price supports. There are no direct payments. There are no marketing loans. There are no countercyclical payments. All we are asking for in this bill is for some help with research money and market promotion.

I supported the bill in its original form, and I am a little disappointed the way it has come to the floor. Nonetheless, it is a step in the right direction.

The authorization for expenditure in this bill is $43 million, compared to what is authorized to the commodity crops which is $12 to $13 billion. So the message here, and I know that it is late at night, but I hope that the agriculture community will see that we, for a long time, have been a part of the big family of agriculture.

This is the time when we are raising the flag to say that the specialty crops out there need some help, and I am, as appropriator, looking forward to getting the support of everybody who supports this bill, to getting money appropriated for this program and hopefully moving in the direction ahead to raise the authorization to a much higher standard and to appropriate a great deal of money. I hope that we do not have a battle in agriculture, where we have to rob Peter to pay Paul. Nonetheless, the growing markets in the world are in the specialty crops, and as I said, the sales of specialty crops last year exceeded that of commodity crops.

So I thank the members of the Committee on Agriculture for bringing this bill to the floor. I look forward to working with them as an appropriator, and it is a step in the right direction.

I thank very much the gentleman from California (Mr. Ose), and I thank very much the gentleman from Texas (Mr. Stenholm).