Short title

This Act may be cited as the

Specialty Crop and Value-Added Agriculture Promotion Act

Definition of specialty crop

Section 3(1) of the Specialty Crops Competitiveness Act of 2004 (Public Law 108–465; 7 U.S.C. 1621 note) is amended— (1)by inserting fish and shellfish whether farm-raised or harvested in the wild, after dried fruits,; and (2)by adding at the end the following: The term includes specialty crops that are organically produced (as defined in section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C. 6502)..

Permanent authorization of appropriations for State specialty crop block grants

Section 101 of the Specialty Crops Competitiveness Act of 2004 (Public Law 108–465; 7 U.S.C. 1621 note) is amended by striking subsection (i) and inserting the following:

(i)

Authorization of appropriations

For fiscal year 2006 and every fiscal year thereafter, there is authorized to be appropriated to the Secretary of Agriculture $500,000,000 to make grants under this section.

Block grants to States for value-added agricultural product market development

(a)

In general

Section 231 of the Agricultural Risk Protection Act of 2000 (Public Law 106–224; 7 U.S.C. 1621 note) is amended by striking subsection (b) and inserting the following:

(b)

Grant program

(1)

State defined

In this subsection, the term State means each of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands. (2)

Block grants to States

(A)

Amount of grant to state

From the amount made available under paragraph (7) for a fiscal year, the Secretary shall provide to each State, subject to subparagraph (B), a grant in an amount equal to the product obtained by multiplying the amount made available for that fiscal year by the result obtained by dividing— (i)the total value of the agricultural commodities and products made in the State during the preceding fiscal year; by (ii)the total value of the agricultural commodities and products made in all of the States during the preceding fiscal year. (B)

Limitation

The total grant provided to a State for a fiscal year under subparagraph (A) shall not exceed $3,000,000. (3)

Use of grant funds by states

A State shall use the grant funds to award competitive grants— (A)to an eligible independent producer (as determined by the State) of a value-added agricultural product to assist the producer— (i)in developing a business plan for viable marketing opportunities for the value-added agricultural product; or (ii)in developing strategies that are intended to create marketing opportunities for the producer; and (B)to an eligible agricultural producer group, farmer or rancher cooperative, or majority-controlled producer-based business venture (as determined by the State) to assist the entity— (i)in developing a business plan for viable marketing opportunities in emerging markets for a value-added agricultural product; or (ii)in developing strategies that are intended to create marketing opportunities in emerging markets for the value-added agricultural product. (4)

Amount of competitive grant

(A)

In general

The total amount provided under paragraph (3) to a grant recipient shall not exceed $500,000. (B)

Majority-controlled producer-based business ventures

The amount of grants provided by a State to majority-controlled producer-based business ventures under paragraph (3)(B) for a fiscal year may not exceed 10 percent of the amount of funds that are used by the State to make grants for the fiscal year under paragraph (3). (5)

Grantee strategies

A recipient of a grant under paragraph (3) shall use the grant funds— (A)to develop a business plan or perform a feasibility study to establish a viable marketing opportunity for a value-added agricultural product; or (B)to provide capital to establish alliances or business ventures that allow the producer of the value-added agricultural product to better compete in domestic or international markets. (6)

Reports

Not later than 90 days after the end of a fiscal year for which funds are provided to a State under paragraph (2), the State shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report describing how the funds were used. (7)

Funding

On October 1 of each fiscal year, of the funds of the Commodity Credit Corporation, the Secretary shall make available to carry out this subsection $100,000,000, to remain available until expended.

(b)

Effective date

The amendment made by subsection (a) shall take effect on October 1, 2005.

Reimbursement of certification costs

(a)

Incentive program

(1)

In general

The Secretary of Agriculture shall establish an incentive program to encourage the independent third-party certification of agricultural producers and processors for product qualities, production practices, or other product or process attributes that increase marketability or value of an agricultural commodity. (2)

Inclusions

The Secretary shall include independent third-party certification systems, including programs such as Good Agricultural Practices, Good Handling Practices, and Good Manufacturing Practices programs, that the Secretary finds will provide 1 or more measurable social, environmental, or marketing advantages. (b)

Standards

The Secretary shall set standards regarding the types of certifications, and the types of certification-related expenses, that will qualify for reimbursement under the program. (c)

Limitation on amount of reimbursement

An agricultural producer or processor may not receive reimbursement for more than 50 percent of the qualified expenses incurred by the producer or processor related to accepted certifications.

Nationwide expansion of risk management agency adjusted gross revenue insurance program

(a)

Expansion

Section 523(e) of the Federal Crop Insurance Act (7 U.S.C. 1523(e)) is amended by adding at the end the following:

(3)

Permanent nationwide operation

(A)

In general

Effective beginning with the 2006 reinsurance year, the Corporation shall carry out the adjusted gross revenue insurance pilot program as a permanent program under this title and may expand the program to cover any county in which crops are produced. (B)

Temporary premium subsidies

To facilitate the expansion of the program nationwide, the Corporation may grant temporary premium subsidies for the purchase of a policy under the program to producers whose farm operations are located in a county that has a high level of specialty crop production and has not had a high-level of participation in the purchase of crop insurance coverage.

(b)

Comptroller General study

The Comptroller General shall conduct a study of the Federal crop insurance program— (1)to determine how well the program under section 523(e)(3) of the Federal Crop Insurance Act (as added by subsection (a)) serves specialty crop producers; and (2)to recommend such changes as the Comptroller General considers appropriate to improve the program for specialty crop producers.

Expansion of fruit and vegetable program in school lunch programs

The Richard B. Russell National School Lunch Act is amended— (1)in section 18 (42 U.S.C. 1769), by striking subsection (g); and (2)by inserting after section 18 the following:

19.

Fruit and vegetable program

(a)

In general

The Secretary shall make available in not more than 100 schools in each State, and in elementary and secondary schools on 1 Indian reservation, free fresh and dried fruits and vegetables and frozen berries to be served to school children throughout the school day in 1 or more areas designated by the school. (b)

Priority in allocation

In selecting States to participate in the program, the Secretary shall give priority to States that produce large quantities of specialty crops. (c)

Publicity

A school participating in the program authorized by this section shall publicize in the school the availability of free fruits and vegetables under the program. (d)

Authorization of appropriations

There is authorized to be appropriated to carry out this section $20,000,000 for each of fiscal years 2006 and 2007.

Increase in limit on direct operating loans; indexation to inflation

Section 313 of the Consolidated Farm and Rural Development Act (7 U.S.C. 1943) is amended— (1)in subsection (a)(1), by striking $200,000 and inserting $500,000 (increased, beginning with fiscal year 2007, by the inflation percentage applicable to the fiscal year in which the loan is made); and (2)in subsection (b), by striking paragraph (2) and inserting the following:

(2)the average of such index (as so defined) for the 12-month period ending on— (A)in the case of a loan other than a loan guaranteed by the Secretary, August 31, 2005; or (B)in the case of a loan guaranteed by the Secretary, August 31, 1996.

Trade of specialty crops

(a)

Assistant USTR for specialty crops

Section 141(c) of the Trade Act of 1974 (19 U.S.C. 2171(c)) is amended by adding at the end the following:

(6)

Assistant USTR for Specialty Crops

(A)

Establishment

There is established in the Office the position of Assistant United States Trade Representative for Specialty Crops. (B)

Appointment

The Assistant United States Trade Representative for Specialty Crops shall be appointed by the United States Trade Representative. (C)

Primary function

The primary function of the Assistant United States Trade Representative for Specialty Crops shall be— (i)to promote the trade interests of specialty crop businesses; (ii)to remove foreign trade barriers that impede specialty crop businesses; and (iii)to enforce existing trade agreements beneficial to specialty crop businesses. (D)

Pay

The Assistant United States Trade Representative for Specialty Crops shall be paid at the level of a member of the Senior Executive Service with equivalent time and service.

(b)

Study of Uruguay round table agreement benefits

(1)

Study

The Comptroller General of the United States shall conduct a study on the benefits of the agreements approved by Congress under section 101(a)(1) of the Uruguay Round Agreements Act (19 U.S.C. 3511(a)(1)) to specialty crop businesses. (2)

Report

Not later than 1 year after the date of the enactment of this Act, the Comptroller General shall submit to Congress a report describing the results of the study conducted under paragraph (1). (c)

Foreign market access strategy

Not later than 1 year after the date of the enactment of this Act, the Secretary of Agriculture shall develop and implement a foreign market access strategy to increase exports of specialty crops to foreign markets.

10.

Increased authorization for technical assistance for specialty crops

Section 3205(d) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 5680(d)) is amended by striking $2,000,000 and inserting $10,000,000.