House Report 108-750 - SPECIALTY CROPS COMPETITIVENESS ACT OF 2004

[House Report 108-750]
[From the U.S. Government Publishing Office]

108th Congress Rept. 108-750
HOUSE OF REPRESENTATIVES
2d Session Part 1

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SPECIALTY CROPS COMPETITIVENESS ACT OF 2004

_______

October 6, 2004.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed

_______

Mr. Goodlatte, from the Committee on Agriculture, submitted the
following

R E P O R T

together with

ADDITIONAL VIEWS

[To accompany H.R. 3242]

[Including cost estimate of the Congressional Budget Office]

The Committee on Agriculture, to whom was referred 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, having considered the same, report
favorably thereon with an amendment and recommend that the bill
as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Specialty Crops Competitiveness Act of
2004''.

SEC. 2. FINDINGS AND PURPOSE.

(a) Findings.--Congress finds the following:
(1) A secure domestic food supply is a national security
imperative for the United States.
(2) A competitive specialty crop industry in the United
States is necessary for the production of an abundant,
affordable supply of highly nutritious fruits, vegetables, and
other specialty crops, which are vital to the health and well-
being of all Americans.
(3) Increased consumption of specialty crops will provide
tremendous health and economic benefits to both consumers and
specialty crop growers.
(4) Specialty crop growers believe that there are numerous
areas of Federal agriculture policy that could be improved to
promote increased consumption of specialty crops and increase
the competitiveness of producers in the efficient production of
affordable specialty crops in the United States.
(5) As the globalization of markets continues, it is becoming
increasingly difficult for United States producers to compete
against heavily subsidized foreign producers in both the
domestic and foreign markets.
(6) United States specialty crop producers also continue to
face serious tariff and non-tariff trade barriers in many
export markets.
(b) Purpose.--It is the purpose of this Act to make necessary changes
in Federal agriculture policy to accomplish the goals of increasing
fruit, vegetable, and nut consumption and improving the competitiveness
of United States specialty crop producers.

SEC. 3. DEFINITIONS.

In this Act:
(1) The term ``specialty crop'' means fruits and vegetables,
tree nuts, dried fruits, and nursery crops (including
floriculture).
(2) The term ``State'' means the several States, the District
of Columbia, and the Commonwealth of Puerto Rico.
(3) The term ``State department of agriculture'' means the
agency, commission, or department of a State government
responsible for agriculture within the State.

TITLE I--STATE ASSISTANCE FOR SPECIALTY CROPS

SEC. 101. SPECIALTY CROP BLOCK GRANTS.

(a) Availability and Purpose of Grants.--Subject to the appropriation
of funds to carry out this section, the Secretary of Agriculture shall
make grants to States for each of the fiscal years 2005 through 2009 to
be used by State departments of agriculture solely to enhance the
competitiveness of specialty crops.
(b) Grants Based on Value of Production.--Subject to subsection (c),
the amount of the grant for a fiscal year to a State under this section
shall bear the same ratio to the total amount appropriated pursuant to
the authorization of appropriations in subsection (i) for that fiscal
year as the value of specialty crop production in the State during the
preceding calendar year bears to the value of specialty crop production
during the preceding calendar year in all States whose application for
a grant for that fiscal year is accepted by the Secretary under
subsection (f).
(c) Minimum Grant Amount.--Subject to the appropriation of sufficient
funds to carry out this subsection, each State shall receive at least
$100,000 each fiscal year as a grant under this section notwithstanding
the amount calculated under subsection (b) for the State.
(d) Eligibility.--To be eligible to receive a grant under this
section, a State department of agriculture shall prepare and submit,
for approval by the Secretary of Agriculture, an application at such
time, in such a manner, and containing such information as the
Secretary shall require by regulation, including--
(1) a State plan that meets the requirements of subsection
(e);
(2) an assurance that the State will comply with the
requirements of the plan; and
(3) an assurance that grant funds received under this section
shall supplement the expenditure of State funds in support of
specialty crops grown in that State, rather than replace State
funds.
(e) Plan Requirements.--The State plan shall identify the lead agency
charged with the responsibility of carrying out the plan and indicate
how the grant funds will be utilized to enhance the competitiveness of
specialty crops.
(f) Review of Application.--In reviewing the application of a State
submitted under subsection (d), the Secretary of Agriculture shall
ensure that the State plan would carry out the purpose of grant
program, as specified in subsection (a). The Secretary may accept or
reject applications for a grant under this section.
(g) Effect of Noncompliance.--If the Secretary of Agriculture, after
reasonable notice to a State, finds that there has been a failure by
the State to comply substantially with any provision or requirement of
the State plan, the Secretary may disqualify, for one or more years,
the State from receipt of future grants under this section.
(h) Audit Requirements.--For each year that a State receives a grant
under this section, the State shall conduct an audit of the
expenditures of grant funds by the State. Not later than 30 days after
the completion of the audit, the State shall submit a copy of the audit
to the Secretary of Agriculture.
(i) Authorization of Appropriations.--For each of the fiscal years
2005 through 2009, there is authorized to be appropriated to the
Secretary of Agriculture $44,500,000 to make grants under this section.

TITLE II--SPECIALTY CROP ADVANCEMENT

SEC. 201. TECHNICAL ASSISTANCE FOR SPECIALTY CROPS.

For each of the fiscal years 2005 through 2009, there is authorized
to be appropriated to the Secretary of Agriculture $2,000,000 to carry
out section 3205 of the Farm Security and Rural Investment Act of 2002
(7 U.S.C. 5680). Amounts appropriated pursuant to this authorization of
appropriations shall be in addition to any other funds made available
to carry out such section.

SEC. 202. REDUCTION IN BACKLOG OF AGRICULTURAL EXPORT PETITIONS.

(a) Reduction Efforts.--To the maximum extent practicable, the
Secretary of Agriculture shall endeavor to reduce the backlog in the
number of applications for permits for the export of United States
agricultural commodities. In achieving such reduction, the Secretary
shall not dilute or diminish existing personnel resources that are
currently managing sanitary and phytosanitary issues for--
(1) United States agricultural commodities for which
exportation is sought; and
(2) interdiction and control of pests and diseases, including
for the evaluation of pest and disease concerns of foreign
agricultural commodities for which importation is sought.
(b) Report.--The Secretary of Agriculture shall submit to the
Committee on Agriculture of the House of Representatives and the
Committee on Agriculture, Nutrition, and Forestry of the Senate an
annual report specifying, for the year covered by the report--
(1) the total number of applications processed to completion;
(2) the number of backlog applications processed to
completion;
(3) the percentage of backlog applications processed to
completion; and
(4) the number of backlog applications remaining.

SEC. 203. REPORT ON SANITARY AND PHYTOSANITARY EXPORT ISSUES.

Not later than 180 days after the date of the enactment of this Act,
the Secretary of Agriculture 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 on
significant sanitary and phytosanitary issues that affect the export of
specialty crops.

TITLE III--SPECIALTY CROP RESEARCH

SEC. 301. METHYL BROMIDE ALTERNATIVES.

(a) Priority.--The Secretary of Agriculture shall elevate the
priority of current methyl bromide alternative research and extension
activities and reexamine the risks and benefits of extending the phase-
out deadline in effect on the date of the enactment of this Act,
including the estimated cost to the grower or processor associated with
any alternatives proposed.
(b) Authorization of Appropriations.--For each of the fiscal years
2005 through 2009, there is authorized to be appropriated to the
Secretary of Agriculture $5,000,000 to carry out this section.

SEC. 302. NATIONAL SPECIALTY CROP RESEARCH PROGRAM.

Section 1672(e) of the Food, Agriculture, Conservation, and Trade Act
of 1990 (7 U.S.C. 5925(e)) is amended by adding at the end the
following new paragraph:
``(45) Specialty crop research.--Research and extension
grants may be made under this section for the purpose of
improving the efficiency, productivity, and profitability of
specialty crop production in the United States.''.

SEC. 303. SPECIALTY CROP COMMITTEE.

The National Agricultural Research, Extension, and Teaching Policy
Act of 1977 is amended by inserting after section 1408 (7 U.S.C. 3123)
the following new section:

``SEC. 1408A. SPECIALTY CROP COMMITTEE.

``(a) Establishment.--Not later than 90 days after the date of the
enactment of the Specialty Crops Competitiveness Act of 2004, the
executive committee of the Advisory Board shall establish, and appoint
the initial members of, a permanent specialty crops committee that will
be responsible for studying the scope and effectiveness of research,
extension, and economics programs affecting the specialty crop
industry.
``(b) Members.--Individuals who are not members of the Advisory Board
may be appointed as members of the specialty crops committee. Members
of the specialty crops committee shall serve at the discretion of the
executive committee.
``(c) Annual Committee Report.--Not later than 180 days after the
establishment of the specialty crops committee, and annually
thereafter, the specialty crops committee shall submit to the Advisory
Board a report containing the findings of its study under subsection
(a). The specialty crops committee shall include in each report
recommendations regarding the following:
``(1) Measures designed to improve the efficiency,
productivity, and profitability of specialty crop production in
the United States.
``(2) Measures designed to improve competitiveness in
research, extension, and economics programs affecting the
specialty crop industry.
``(3) Programs that would--
``(A) enhance the quality and shelf-life of fresh
fruits and vegetables, including their taste and
appearance;
``(B) develop new crop protection tools and expand
the applicability and cost-effectiveness of integrated
pest management;
``(C) prevent the introduction of foreign invasive
pests and diseases;
``(D) develop new products and new uses of specialty
crops;
``(E) develop new and improved marketing tools for
specialty crops;
``(F) enhance food safety regarding specialty crops;
``(G) improve mechanization of production practices;
and
``(H) enhance irrigation techniques used in specialty
crop production.
``(d) Consideration by Secretary.--In preparing the annual budget
recommendations for the Department of Agriculture, the Secretary shall
take into consideration those findings and recommendations contained in
the most recent report of the specialty crops committee that are
adopted by the Advisory Board.
``(e) Annual Report by Secretary.--In the budget material submitted
to Congress by the Secretary in connection with the budget submitted
pursuant to section 1105 of title 31, United States Code, for a fiscal
year, the Secretary shall include a report describing how the Secretary
addressed each recommendation of the specialty crops committee
described in subsection (d).''.

TITLE IV--PEST AND DISEASE RESPONSE FUND

SEC. 401. PEST AND DISEASE RESPONSE FUND.

(a) Establishment.--There is established on the books of the Treasury
an account to be known as the ``Pest and Disease Response Fund''. There
shall be deposited into the Fund any proceeds received by the Secretary
of Agriculture as reimbursement for services provided by the Secretary
using amounts in the Fund.
(b) Availability.--Amounts in the Fund shall remain available until
expended.
(c) Use of Fund.--In implementing the Animal Health Protection Act (7
U.S.C. 8301 et seq.) and the Plant Protection Act (7 U.S.C. 7701 et
seq.), the Secretary of Agriculture shall have complete discretion
regarding the use of amounts in the Fund to support emergency
eradication and research activities in response to economic and health
threats posed by pests and diseases affecting agricultural commodities.
(d) Authorization of Appropriations.--For each of the fiscal years
2005 through 2009, there is authorized to be appropriated to the
Secretary of Agriculture $1,000,000 for deposit in the Fund.

SEC. 402. IMPORT AND EXPORT REGULATION REVIEW.

(a) Peer Review.--The Secretary of Agriculture shall enter into an
agreement with the National Plant Board to obtain a peer review of the
procedures and standards that govern the consideration of import and
export requests under section 412 of the Plant Protection Act (7 U.S.C.
7712). The peer review shall be consistent with the guidance by the
Office of Management and Budget pertaining to peer review and
information quality.
(b) Elements of Review.--The peer review required by subsection (a)
shall address, at a minimum--
(1) the preparation of risk assessments; and
(2) the sufficiency, type, and quality of data that should be
submitted to the Secretary of Agriculture.
(c) Submission of Results.--The results of the peer review conducted
under subsection (a) shall be submitted to the Secretary and Congress
not later than 180 days after the date of the enactment of this Act.

SEC. 403. MAINTENANCE OF FREDERICKSBURG INSPECTION TRAINING CENTER.

For each of the fiscal years 2005 through 2009, there is authorized
to be appropriated to the Secretary of Agriculture $1,500,000 for the
maintenance of the Agricultural Marketing Service inspection training
center in Fredericksburg, Virginia.

Brief Explanation

H.R. 3242 is intended to make changes in Federal
agriculture policy in order to accomplish the goals of
increasing fruit, vegetable and nut consumption and improving
the competitiveness of United States specialty crop producers.
The bill is an authorization of $54 million per year over
five years. There are several provisions designed to help U.S.
specialty crop producers compete globally and export
internationally, improve the focus of specialty crop research,
and help improve response to pest and disease problems.
H.R. 3242 authorizes $44.5 million per year in state block
grants to be used solely to enhance the competitiveness of
specialty crops. Base grants of $100,000 will be awarded to
each state with remaining monies to be allotted based on the
proportion of the value of specialty crop production of each
state in relation to the national value of specialty crop
production for that year. Each state will have to submit a plan
that fulfills the requirements of enhancing the competitiveness
of specialty crops to the Secretary of Agriculture for
approval. Additionally there are yearly audit requirements and
the ability of the Secretary of Agriculture to disqualify
states for future grant receipt if the states fail to comply
with the requirements of the plan.
This bill also authorizes the appropriation of $2 million
per year, in addition to Commodity Credit Corporation funds
already made available, to carry out the Technical Assistance
for Specialty Crops (TASC) program; authorizes $5 million per
year and requires the Secretary of Agriculture to elevate the
priority of current methyl bromide alternative research and
extension activities and re-examine the risks and benefits of
extending the phase-out deadline; authorizes $1.5 million per
year for the maintenance of the Agricultural Marketing Service
inspection training center in Fredericksburg, Virginia; and
establishes and authorizes $1 million per year on the books of
the Treasury a pest and disease response fund account. The
Secretary shall have complete discretion regarding the use of
this fund to support activities in response to economic and
health threats posed by pests and diseases affecting
agricultural commodities.
H.R. 3242 requires the Secretary of Agriculture to reduce
the export petition certificate backlog, submit a report to
Congress on the significant sanitary/phytosanitary issues that
affect the export of specialty crops, and instructs the
Secretary of Agriculture to enter into an agreement with the
National Plant Board to obtain peer review of procedures and
standards that govern consideration of import/export requests.
Additionally the bill adds specialty crop research to the list
of the United States Department of Agriculture's high priority
research and extension activities, and establishes a permanent
specialty crops committee under an existing board to study
research needs of specialty crops and make recommendations.
Specialty crops are defined for the purposes of this bill.

Purpose and Need

The specialty crop industry is very diverse and is
comprised of fruits and vegetables, tree nuts and nursery
crops. Specialty crop growers believe that there are numerous
areas of Federal agricultural policy that could be improved to
promote increased consumption of specialty crops and increase
the competitiveness of producers in the efficient production of
affordable specialty crops in the United States. Increased
consumption of specialty crops will provide health and economic
benefits to both consumers and specialty crop growers.
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 by other
countries. United States specialty crop producers also continue
to face serious tariff and other non-tariff trade barriers in
many export markets. As the globalization of markets continues,
it is becoming increasingly difficult for United States
producers to compete against heavily subsidized foreign
producers in both the domestic and foreign markets. It is the
purpose of this Act to make necessary changes in Federal
agriculture policy to accomplish the goals of increasing fruit,
vegetable and nut consumption and improving the competitiveness
of United States specialty crop producers.

Section-by-Section Analysis

Section 1. Short title

Provides that this Act shall be known as the ``Specialty
Crops Competitiveness Act of 2004.''

Section 2. Findings and purpose

Enumerates Congress' findings with respect to the nature of
the specialty crops industry in the U.S. Declares that the
purpose of this Act is to increase consumption of specialty
crops and competitiveness of specialty crop producers.

Section 3. Definitions

(1) Defines ``specialty crops'' as fruits and vegetables,
tree nuts, dried fruits, and nursery crops (including
floriculture).
The Committee is aware that no one legal definition
currently exists for ``specialty crops'' and that each agency
at the United States Department of Agriculture (USDA) has
various definitions that reflect the development of different
programs. For the purposes of this Act the definition of
specialty crops is: fruit, vegetables, dried fruit, tree nuts
and nursery crops (including floriculture). The block grant
program is intended for all specialty crop producers, however
their crops are marketed.
The State of Hawaii grows many unique crops, and the
Committee considers certain crops such as, but not limited to,
coffee, cacao, cut flowers, foliage, herbs, vanilla, ginger
root, algae and seaweed as specialty crops for the purposes of
this Act. The Committee encourages Hawaii's State Department of
Agriculture to work with USDA to determine additional eligible
specialty crops, as appropriate.
(2) Defines ``State'' as the several states, the District
of Columbia, and the Commonwealth of Puerto Rico.
(3) Defines ``State department of agriculture'' as the
agency, commission, or department of a State government
responsible for agriculture within the State.

TITLE I--STATE ASSISTANCE FOR SPECIALTY CROPS

Section 101. Specialty crops block grants

(a) Requires the Secretary of Agriculture, during each of
fiscal years 2005 through 2009, to make grants to States to be
used by State departments of agriculture to enhance the
competitiveness of specialty crops.
(b) Provides that the amount of each grant shall be based
on the value of specialty crop production in each State in
relation to the national value of specialty crop production for
that year.
(c) Provides that each State shall receive no less than
$100,000 during each year in which grants are provided to the
states.
(d) Restricts eligibility for grants to those states that
submit, for approval by the Secretary, an application
containing a State plan.
(e) Requires a State plan to identify the State agency that
will carry out the plan and indicate how the funds will be used
to increase the competitiveness of specialty crops in that
State.
(f) Instructs the Secretary of Agriculture to ensure that a
State plan would carry out the purpose of the grant program.
Provides that the Secretary may reject applications for grants.
(g) Provides that the Secretary may disqualify, for one or
more years, a State from the grant program if the State fails
to substantially comply with its State plan.
(h) Requires a state who receives a grant to conduct an
audit of the expenditures and submit to the Secretary of
Agriculture.
(i) Authorizes $44,500,000 for each of fiscal years 2005
through 2009 to make specialty crop block grants to states
under this section.

TITLE II--SPECIALTY CROP ADVANCEMENT

Section 201. Technical assistance for specialty crops

Authorizes $2,000,000 per year, in addition to CCC funds
already made available, to carry out the Technical Assistance
for Specialty Crops (TASC) program.

Section 202. Reduction in backlog of agricultural export petitions

(a) Instructs the Secretary to reduce the number of backlog
permit applications for the export of agricultural commodities
without diluting or diminishing existing personnel resources
that are currently managing sanitary and phytosanitary issues.
(b) Requires the Secretary to report annually to the
Committee on Agriculture of the House of Representatives and
the Committee on Agriculture, Nutrition, and Forestry of the
Senate, regarding the progress made in considering
applications.

Section 203. Report on sanitary and phytosanitary export issues

Requires the Secretary to submit to Congress a report on
the significant sanitary and phytosanitary issues that affect
the export of specialty crops.

TITLE III--SPECIALTY CROP RESEARCH

Section 301. Methyl bromide alternatives

(a) Requires the Secretary of Agriculture to elevate the
priority of current methyl bromide alternative research and
extension activities and reexamine the risks and benefits of
extending the phase-out deadline.
(b) Authorizes $5,000,000 for each of fiscal years 2005
through 2009, to carry out this section.

Section 302. National specialty crops research program

Adds specialty crop research to the list of the Department
of Agriculture's high priority research and extension
activities.

Section 303. Specialty crops committee

Establishes a permanent specialty crops committee, under
the National Agricultural Research, Extension, Education and
Economics Advisory Board.
Requires the committee to study the scope and effectiveness
of research, extension and economics programs affecting the
specialty crop industry and report its finding to the Advisory
Board.
Provides that if the Advisory Board adopts the findings of
the committee's report, the Secretary of Agriculture shall
submit the report to the Committee on Agriculture of the House
of Representatives and the Committee on Agriculture, Nutrition
and Forestry of the Senate. Requires the Secretary of
Agriculture to consider the annual report of the committee when
developing the Department of Agriculture's annual budget
recommendations.

TITLE IV--PEST AND DISEASE RESPONSE FUND

Section 401. Pest and disease response fund

Establishes a pest and disease response fund account on the
books of the Treasury. Provides that the Secretary of
Agriculture shall have complete discretion regarding the use of
this fund to support activities in response to economic and
health threats posed by pests and diseases affecting
agricultural commodities. Authorizes $1,000,000 for each of
fiscal years 2005 through 2009 to be deposited in the fund.

Section 402. Import and export review

(a) Instructs the Secretary to enter into an agreement with
the National Plant Board to obtain a peer review of the
procedures and standards that govern the consideration of
import and export requests under section 412 of the Plant
Protection Act (7 U.S.C. 7712).
(b) The peer review, at a minimum, shall address the
preparation of risk assessments and the sufficiency, type, and
quality of data that should be submitted to the Secretary.
(c) The results of the peer review shall be submitted to
the Secretary of Agriculture and to Congress.

Section 403. Maintenance of Fredericksburg inspection training center

Authorizes $1,500,000 for each of fiscal years 2005 through
2009 for the maintenance of the Agricultural Marketing Service
inspection training center in Fredericksburg, Virginia.

Committee Consideration

I. HEARINGS

The Subcommittee on Energy Policy, Natural Resources and
Regulatory Affairs of the Committee on Government Reform held a
hearing on December 12, 2003, in Salinas, California. The
hearing focused on the merits of H.R. 3242, the Specialty Crop
Competitiveness Act. Witnesses representing the specialty crop
industry discussed Federal financial assistance and domestic
and international trade policies affecting the U.S. specialty
crop industry's ability to be competitive in today's expanding
global market. The hearing focused on the industry's concerns
to demonstrate that legislative and regulatory changes are
needed in order to moderate impacts on specialty crops.
The first witness panel was the Secretary of the California
Department of Food and Agriculture, Mr. A.G. Kawamura. The
second panel was Mr. Joseph Zanger, a member of the board of
directors of the California Farm Bureau Federation; Mr. Jim
Bogart, president of the Grower-Shipper Vegetable Association
of Central California; Mr. John D'Arrigo, chairman of Western
Growers; and, Mr. Robert Nielsen, vice president of Tanimura &
Antle.

II. FULL COMMITTEE CONSIDERATION

The Committee on Agriculture met, pursuant to notice, with
a quorum present, on September 30, 2004, to consider H.R. 3242,
the Specialty Crops Competitiveness Act of 2004, and other
pending business.
Chairman Goodlatte called the meeting to order and made an
opening statement as did Ranking Member Stenholm. Without
objection, H.R. 3242 was discharged from the Subcommittee on
Livestock and Horticulture and placed before the Committee to
be open for amendment at any point. Counsel was then recognized
to give a brief summary of the bill.
Mr. Ose was recognized to offer and explain an amendment to
move $24,000,000 from Title IV, Section 401, the Pest and
Disease Response Fund, to Title I, Section 101, Specialty Crop
Block Grants, increasing the block grant total to $39,500,000.
Discussion occurred, and by voice vote the amendment was
adopted.
Mr. Dooley was then recognized to offer and explain an
amendment to increase the funding for Title I, Section 101,
Specialty Crop Block Grants, to $220,000,000 per year, offset
by reductions in direct payments. Discussion occurred and by a
voice vote, the amendment failed.
Mr. Pence was recognized to offer and explain an amendment
to allow for the production of fruits and vegetables for
processing on covered commodity base acres. Discussion occurred
and without objection, the amendment was withdrawn.
Mr. Dooley was again recognized to offer and explain an
amendment to increase the funding for Title I, Section 101,
Specialty Crop Block Grants, to $220,000,000 per year, offset
by increased payment limitations. Discussion occurred and
without objection, the amendment was withdrawn.
Mr. Cardoza was then recognized to offer and explain an
amendment to increase the funding for Title I, Section 101,
Specialty Crop Block Grants, to $200,000,000 per year.
Discussion occurred and without objection, the amendment was
withdrawn.
Mr. Baca was recognized to offer and explain an amendment
to improve border inspection facilities. Discussion occurred
and without objection, the amendment was withdrawn.
In response to the concerns of Members, Mr. Ose offered a
perfecting amendment to increase the funding for Title I,
Section 101, Specialty Crop Block Grants, to $44,500,000 per
year. Discussion occurred, and by a voice vote, the amendment
was adopted.
Mr. Case was recognized and expressed concern with the
broad definition of the term ``specialty crop.'' He indicated
that some Hawaiian crops such as coffee, vanilla, and cacao,
not commonly grown on the mainland, should be included in this
definition. Chairman Goodlatte indicated that he would work
with Mr. Case to define Hawaiian crops as specialty crops, if
appropriate.
There being no further amendments, the Amendment in the
Nature of a Substitute to H.R. 3242, as amended, was adopted,
by a voice vote.
Mr. Stenholm moved that H.R. 3242, as amended, be adopted
and reported favorable to the House with the recommendation
that it pass.
By voice vote, the motion was agreed to in the presence of
a quorum, and H.R. 3242, as amended, was ordered to be
favorably reported to the House of Representatives.
Chairman Goodlatte advised Members that pursuant to the
rules of the House of Representatives that Members have 2
calendar days to file supplemental, minority or additional
views for inclusion to the committee report.
Mr. Stenholm then moved that pursuant to clause 1 of rule
XXII, that the Committee authorize the Chairman to offer such
motion as may be necessary in the House to go to conference
with the Senate on H.R. 3242, or a similar Senate bill. Without
objection, the motion was agreed to.
Without objection, staff was given permission to make any
necessary clerical, technical or conforming changes to reflect
the intent of the Committee.
The Committee then adjourned, subject to the call of the
Chair.

Reporting the Bill--Rollcall Votes

In compliance with clause 3(b) of rule XIII of the House of
Representatives, H.R. 3242 was reported by voice vote with a
majority quorum present. There was no request for a recorded
vote.

Committee Oversight Findings

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee on Agriculture's
oversight findings and recommendations are reflected in the
body of this report.

Budget Act Compliance (Sections 308, 402, and 423)

The provisions of clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives and section 308(a)(1) of the
Congressional Budget Act of 1974 (relating to estimates of new
budget authority, new spending authority, new credit authority,
or increased or decreased revenues or tax expenditures) are not
considered applicable. The estimate and comparison required to
be prepared by the Director of the Congressional Budget Office
under clause 3(c)(3) of rule XIII of the Rules of the House of
Representatives and sections 402 and 423 of the Congressional
Budget Act of 1974 submitted to the Committee prior to the
filing of this report are as follows:

U.S. Congress,
Congressional Budget Office,
Washington, DC, October 6, 2004.
Hon. Bob Goodlatte,
Chairman, Committee on Agriculture,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3242, the
Specialty Crops Competitiveness Act of 2004.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Jim Langley.
Sincerely,
Douglas Holtz-Eakin,
Director.
Enclosure.

H.R. 3242--Specialty Crops Competitiveness Act of 2004

Summary: H.R. 3242 would authorize the appropriation of $45
million a year over the 2005-2009 period to make grants to
states to enhance the competitiveness of specialty crops
(including fruits, vegetables, tree nuts, dried fruits, and
nursery products). The bill also would authorize the
appropriation of $2 million a year to provide technical
assistance for growers of those crops, and $5 million a year to
research certain pesticides over the 2005-2009 period. H.R.
32242 also would authorize the appropriation of $2.5 million a
year over this period to respond to threats posed by pests and
diseases affecting agricultural commodities, and to maintain a
crop inspection center in Virginia. In addition, CBO estimates
implementing the bill would cost $10 million a year to
establish a federal research program for specialty crops,
subject to appropriation of the necessary amounts.
Assuming appropriation of the amounts specifically
authorized by the bill and estimated to be necessary, CBO
estimates that implementing H.R. 3242 would cost $60 million in
fiscal year 2005 and $320 million over the 2005-2009 period.
Enacting this legislation would not affect revenues or direct
spending.
H.R. 3242 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would impose no costs on state, local, or tribal
governments. The grant funds authorized by this bill would
benefit state governments, and any costs they might incur to
comply with the conditions of this assistance would be incurred
voluntarily.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 3242 is shown in the following table.
The costs of this legislation fall within budget function 350
(agriculture). The estimated cost of the specialty crop
research program that would be authorized by the bill is based
on the size of similar research conducted by the Department of
Agriculture.

----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
--------------------------------------------
2005 2006 2007 2008 2009
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Specified Authorization Level...................................... 55 55 55 55 55
Estimated Outlays.................................................. 55 55 55 55 55
Estimated Authorization Level...................................... 10 10 10 10 10
Estimated Outlays.............................................. 5 10 10 10 10
Total Changes:
Estimated Authorization Level...................................... 65 65 65 65 65
Estimated Outlays.............................................. 60 65 65 65 65
----------------------------------------------------------------------------------------------------------------

Intergovernmental and private-sector impact: H.R. 3242
contains no intergovernmental or private-sector mandates as
defined in UMRA and would impose no costs on state, local, or
tribal governments. The grant funds authorized by this bill
would benefit state governments, and any costs they might incur
to comply with the conditions of this assistance would be
incurred voluntarily.
Estimate prepared by: Federal Costs: Jim Langley; Impact on
State, Local, and Tribal Governments: Marjorie Miller; and
Impact on the Private Sector: Amina Masood.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.

Performance Goals and Objectives

With respect to the requirement of clause 3(c)(4) of rule
XIII of the Rules of the House of Representatives, the
performance goals and objections of this legislation are 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.

Constitutional Authority Statement

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds the
Constitutional authority for this legislation in Article I,
clause 8, section 18, that grants Congress the power to make
all laws necessary and proper for carrying out the powers
vested by Congress in the Constitution of the United States or
in any department or officer thereof.

Committee Cost Estimate

Pursuant to clause 3(d)(2) of rule XIII of the Rules of the
House of Representatives, the Committee report incorporates the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to sections 402 and 423 of the
Congressional Budget Act of 1974.

Advisory Committee Statement

No advisory committee within the meaning of section 5(b) of
the Federal Advisory Committee Act was created by this
legislation.

Applicability to the Legislative Branch

The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act (Public Law
104-1).

Federal Mandates Statement

The Committee adopted as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act (Public Law 104-4).

Changes in Existing Law Made by the Bill, as Reported

In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italic and existing law in which no change is
proposed is shown in roman):

SECTION 1672 OF THE FOOD, AGRICULTURE, CONSERVATION, AND TRADE ACT OF
1990

SEC. 1672. HIGH-PRIORITY RESEARCH AND EXTENSION INITIATIVES.

(a) * * *

* * * * * * *

(e) High-Priority Research and Extension Areas.--
(1) * * *

* * * * * * *

(45) Specialty crop research.--Research and extension
grants may be made under this section for the purpose
of improving the efficiency, productivity, and
profitability of specialty crop production in the
United States.

* * * * * * *

----------

NATIONAL AGRICULTURAL RESEARCH, EXTENSION, AND TEACHING POLICY ACT OF
1977

SEC. 1408A. SPECIALTY CROP COMMITTEE.

(a) Establishment.--Not later than 90 days after the date of
the enactment of the Specialty Crops Competitiveness Act of
2004, the executive committee of the Advisory Board shall
establish, and appoint the initial members of, a permanent
specialty crops committee that will be responsible for studying
the scope and effectiveness of research, extension, and
economics programs affecting the specialty crop industry.
(b) Members.--Individuals who are not members of the Advisory
Board may be appointed as members of the specialty crops
committee. Members of the specialty crops committee shall serve
at the discretion of the executive committee.
(c) Annual Committee Report.--Not later than 180 days after
the establishment of the specialty crops committee, and
annually thereafter, the specialty crops committee shall submit
to the Advisory Board a report containing the findings of its
study under subsection (a). The specialty crops committee shall
include in each report recommendations regarding the following:
(1) Measures designed to improve the efficiency,
productivity, and profitability of specialty crop
production in the United States.
(2) Measures designed to improve competitiveness in
research, extension, and economics programs affecting
the specialty crop industry.
(3) Programs that would--
(A) enhance the quality and shelf-life of
fresh fruits and vegetables, including their
taste and appearance;
(B) develop new crop protection tools and
expand the applicability and cost-effectiveness
of integrated pest management;
(C) prevent the introduction of foreign
invasive pests and diseases;
(D) develop new products and new uses of
specialty crops;
(E) develop new and improved marketing tools
for specialty crops;
(F) enhance food safety regarding specialty
crops;
(G) improve mechanization of production
practices; and
(H) enhance irrigation techniques used in
specialty crop production.
(d) Consideration by Secretary.--In preparing the annual
budget recommendations for the Department of Agriculture, the
Secretary shall take into consideration those findings and
recommendations contained in the most-recent report of the
specialty crops committee that are adopted by the Advisory
Board.
(e) Annual Report by Secretary.--In the budget material
submitted to Congress by the Secretary in connection with the
budget submitted pursuant to section 1105 of title 31, United
States Code, for a fiscal year, the Secretary shall include a
report describing how the Secretary addressed each
recommendation of the specialty crops committee described in
subsection (d).

ADDITIONAL VIEWS OF REPRESENTATIVE CAL DOOLEY

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.
Representative Doug Ose and I introduced H.R. 3242 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 reported out of
committee is significantly scaled down from the bill as
introduced. In particular, the federal funding provided by this
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% 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 in committee 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 committee markup of the 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
miniscule reduction encountered fierce 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.