Mandated federal budget cuts that kicked in March 1 appeared to have no immediate effect on the fresh produce industry, but traders anticipate cutbacks in government services and delays at border crossings if the cuts remain in place throughout the year.
Called sequestration, the cuts were put in place during the 2011 debt ceiling negotiations as part of the Budget Control Act. According to the law, if Congress and the president couldn’t agree on a plan to reduce the deficit by $4 trillion, close to $1 trillion in automatic cuts would begin in 2013.
The White House released a fact sheet about the sequester cuts and a longer budget document that details specific sequestration cuts, which the Office of Management and Budget said will require spending reductions of 9% for nondefense programs and 13% for defense programs for fiscal 2013.
According to the administration’s estimates:
- Food inspections could drop by 2,100;
- Customs and Border Protection will have have to reduce work hours by 5,000,
- More than 2,750 CBP officers will be affected.
The White House said that those staff reductions could increase wait times at airports and ports of entry. Wait times for seaport container examinations could increase from two to five days, according to the White House.
A U.S. Department of Agriculture spokesman, speaking on background, said March 7 that no furloughs are expected for USDA Agricultural Marketing Service or Animal Plant Health Inspection Service staff working on the border. However, the spokesman said furloughs are expected for border officials of the U.S. Customs and Border Patrol.
As of March 7, however, industry leaders reported no unusual delays through the first week of March. There was a growing concern about potential delays in inspections and border crossings if mandated cuts are not stopped.
“We’ve heard things that could happen, but we have not seen anything actually happen yet,” said John Pandol, special projects manager for Pandol Bros. Inc., Delano, Calif.
For example, he said there are warnings inbound cargo could be delayed.
“We are all kind of waiting to see what they consider non-essential (staff),” Pandol said.
Compared with manufactured goods, Pandol said fresh produce may be protected because of its perishable nature. Export shipments have also been unaffected so far, Pandol said.
Vegetable shipments from Mexico have not been held up, one distributor said.
“There have been rumors, but so far there are no delays,” said Alberto Maldonado, general manager of Apache Produce, Nogales, Ariz.. “Everybody is forecasting that, but the volume is so light it is hard to evaluate what is going to happen.”
While there are no reports of delays in border crossings for Canadian exports to the U.S. now, Fred Webber, chief executive officer and president of the Ottawa-based Fruit and Vegetable Dispute Resolution Corp., said Canadian exporters were wary of U.S. cutbacks in staffing at border crossings.
“This is not the heaviest shipping time right now, not like it will be in the summertime,” he said. “The other message we need to get out to people is to check, double-check and triple-check your clearance documents, because if you get held back for a document issue you could be at the end of a very long line.”
Tom O’Brien, Washington, D.C.-based representative for the Newark, Del.-based Produce Marketing Association, said he believes that user-fee funded services like PACA and fruit and vegetable inspections won’t be affected by the sequester cuts.