(Aug. 1) The government’s destination inspection fees are increasing for the 2,000 fruit and vegetable marketers who use the service, and the incremental increases may keep coming, the agency said in early August.
The U.S. Department of Agriculture’s Agricultural Marketing Service (AMS) published notice of two back-to-back increases in fees charged for vegetable terminal market inspection services. The first increase of 15% becomes effective Aug. 31 and the second 15% increase would be implemented in March 2008, according to the final rule.
Further increases may be necessary to cover program costs and maintain the required reserve, the rule said.
A spokesman for the AMS could not be reached for comment on Aug. 1.
The cost of a basic inspection — 51 packages or more — increases to $131 Aug. 31 and $151 on or after March 1 of next year.
The increases are necessary to maintain the agency’s mandated four-month reserve, according to the rule, which notes that while the USDA’s AMS Fresh Produce Branch has reduced costs by about $2 million annually, the existing fee schedule doesn’t generate sufficient revenue to cover program costs and maintain the required reserve.
Salary increases added $700,000 in costs in fiscal year 2006, and the branch must also now cover the costs of operating the Training and Development Center for inspectors in Fredericksburg, Va. The funds for developing the center were originally provided by Congress in 2001.
Revenue projections for the branch’s destination market inspection program during fiscal 2006 are $15.3 million, with costs at $20.4 million, resulting in a deficit of about $5 million. The end-of-year reserve balance for fiscal 2006 was projected at $12.7 million, the rule said.
That balance — in place in large part because of a federal infusion of funds for infrastructure and improvement in 2001 after the Hunts Point Terminal Market (The Bronx, N.Y.) bribery scandal — is projected to fall well below the reserve in coming years and even dip into negative territory.