USDA Fruit Tree Diversion Programs — Prune, Plum, and Peach Removal Payments
Legal Authority
- 7 U.S.C. § 612c (Section 32 of the Agricultural Adjustment Act) — Appropriates a percentage of customs receipts for use by USDA to support domestic agricultural markets, including purchasing surplus commodities and funding diversion programs; primary funding authority for fruit tree removal payments
- 7 CFR Part 81 — USDA Agricultural Marketing Service regulations for the prune and dried plum diversion program; establishes payment rates, eligibility, tree removal requirements, and verification procedures
- 7 CFR Part 82 — USDA regulations for the clingstone peach diversion program; parallel structure to Part 81 for peach growers
Key Mechanics
7 CFR Parts 81 and 82 implement tree diversion programs for California prune/dried plum growers (Part 81) and clingstone peach growers (Part 82) — programs that pay farmers to remove fruit trees from production to reduce chronic oversupply and stabilize commodity prices. The programs are funded through Section 32 (7 U.S.C. § 612c), which dedicates a percentage of customs receipts to USDA for domestic agricultural market support. To participate, a grower applies to USDA's Agricultural Marketing Service during the sign-up period, agrees to remove a specified number of bearing trees, and receives a per-tree payment in exchange. Trees must be removed — uprooted or destroyed — in a manner that prevents them from producing future crops; USDA inspectors verify removal. Replanting the same variety within a specified period (typically several years) is prohibited; the agreement runs with the land. The programs target specifically overproduced varieties — California dried plums (formerly marketed as prunes) faced chronic export demand decline in the early 2000s, prompting multiple diversion rounds; clingstone peaches face competition from cheaper imports and processor consolidation. Diversion programs are activated by AMS administrative decision, not automatic — they require a formal determination that supply reduction is necessary to support market price.
Current Rule (2026)
| Parameter | Value |
|---|---|
| Citation | 7 CFR Parts 81 (prunes/dried plums) and 82 (clingstone peaches) |
| Issuing agency | USDA Agricultural Marketing Service (AMS) |
| Statutory authority | 7 U.S.C. § 612c (Section 32 agricultural market support) |
| Last major amendment | Part 81 deadline: June 30, 2002; Part 82 deadline: July 31, 2006 |
What This Rule Does
Section 32 of the Agricultural Adjustment Act of 1935 (7 U.S.C. § 612c) lets USDA use a portion of customs duties to support agricultural markets — including by paying farmers to divert surplus crops out of commercial channels. USDA has used this authority to fund one-time programs paying California growers to permanently remove fruit trees producing surplus prunes/dried plums and clingstone peaches.
These programs were targeted supply-side interventions: by paying growers to permanently remove orchard acreage, USDA aimed to reduce chronic oversupply, stabilize prices, and improve the long-run viability of the remaining growers. They were not standing entitlement programs but bounded campaigns with fixed enrollment deadlines and finite funding.
Both programs have now closed (enrollment deadlines in 2002 and 2006 respectively), but the regulations remain in force to govern outstanding claims, compliance reviews, and record retention for enrolled participants.
Prune/Dried Plum Diversion Program (Part 81)
The California prune and dried plum industry faced chronic oversupply that depressed prices for producers throughout the late 1990s and early 2000s. The program offered payments to California growers who permanently removed prune/plum orchards from production.
- § 81.1 — The Secretary of Agriculture pays California prune and plum growers who remove trees under program terms; only growers who comply with all conditions are eligible
- § 81.2 — § 81.9 — Growers must sign a participation agreement with the California Prune Board (CPB); before removal, an authorized inspector must certify the orchard block (acreage and tree count); the grower must receive a certificate; actual removal requires destruction of the trees (stump pulling, burning, or similar methods) — replanting the same variety is prohibited
- § 81.10 — To receive payment, a grower must submit a completed claim form to the CPB by June 30, 2002, with the CPB's inspection certificate attached
- § 81.11 — A grower found to have violated program provisions receives no diversion payment for those trees; violations of other conditions (like replanting the same variety) can result in repayment of amounts already received
- § 81.12 — Growers must allow USDA and CPB representatives to inspect the orchard at reasonable times to verify compliance; inspectors can check acreage, tree removal evidence, and remaining trees
- § 81.13 — Growers must keep records of removal contracts and invoices; USDA, the CPB, or the GAO may audit records within three years of the final payment
- § 81.14 — Payments are made directly to the grower regardless of state-law claims from creditors or lienholders; the only offset allowed is for amounts the grower owes USDA under other programs; growers may not assign program payments without USDA consent
Clingstone Peach Diversion Program (Part 82)
The California clingstone peach industry — a variety grown primarily for commercial canning rather than fresh consumption — faced similar structural oversupply. The USDA funded removal payments through AMS with administration handled by the California Clingstone Peach Association (CCPA).
- § 82.1 — AMS pays California clingstone peach growers who remove trees under program terms; the CCPA administers the program on USDA's behalf
- § 82.2 — § 82.9 — Structure mirrors the prune program: growers sign a participation agreement, an authorized inspector certifies the orchard before removal, the grower obtains a certificate, then physically removes the trees
- § 82.10 — Claims must be submitted to the CCPA by July 31, 2006
- § 82.11 — Same compliance and repayment rules as Part 81; non-compliant growers forfeit payments
- § 82.12 — Same inspection rights for USDA/CCPA representatives
- § 82.13 — Same records retention requirements (three-year audit window)
- § 82.14 — Same payment assignment and offset rules; federal program payments take priority over private creditor claims
How It Affects You
These programs are closed to new enrollment — the claim deadlines passed in 2002 and 2006. If your orchard participated in either program, the key remaining obligations are:
Record retention: Growers must keep removal records, contracts, and invoices for three years from the date of final payment. USDA or the GAO may still audit compliance within that window.
Replanting restrictions: Growers paid to remove prune/plum or clingstone peach trees under these programs agreed not to replant the same variety on the diverted acreage. Violations can trigger repayment demands years after initial payment.
Compliance review risk: USDA reserved the right to inspect and verify removal. If physical inspection shows trees were not properly removed or the same variety was replanted, USDA can disallow the payment and seek recovery.
For growers who never enrolled, these rules are historical. But they illustrate the Section 32 authority USDA can use in future commodity crises — a direct payment for supply reduction is a policy tool available without new legislation.
Statutory Authority
This rule implements:
- 7 U.S.C. § 612c (Section 32) — Requires that 30 percent of customs duty receipts be set aside annually for USDA to use for removing surplus agricultural commodities from normal commercial channels, including through direct payments to producers who divert production
Recent Rulemakings
No amendments since original promulgation. The programs are closed; regulations remain in force for compliance and audit purposes only.