In early 1977, the Economic Research Service initiated a study of the impact of Federal regulations affecting production, processing and distribution of fruits and vegetables. Impetus for the study came from a resource reallocation scheme in ERS for fiscal 1977 which redirected research manpower and dollars according to perceived emerging issues. Christened the "five percent plan," it involved the ERS divisions pooling 5 percent of their resources and then "bidding" for these pooled resources by submitting research proposals. A proposal for a general study of regulations as they affect agriculture ranked high on the list of researchable emerging issues. A commodity approach was recommended with fruits and vegetables ultimately selected as a prototype subsector. The focus of the study was narrowed to Federal regulatory activity because of the large number and diversity of state and local regulations, particularly in the produce industry. Four SMY's and $100,000 were initially allocated to the project. In addition, program areas in ERS not directly assigned a part in the study but having an interest in regulatory activity were encouraged to informally participate. This paper will be followed by a discussion of a complementary ERS study of this type.