(UPDATED, March 19) The U.S. Department of Agriculture will increase fees for audit and fresh produce inspections services on Oct. 1.
The USDA said in an industry update that rates will increase for audit and inspection services to ensure revenue adequately covers operational expenses and maintain an adequate operating reserve. The agency said it is required to charge user-fee customers a rate that covers all expenses for voluntary services, such as employee pay and benefits, travel, property, overhead.
For fiscal 2018, the USDA said operating revenue for fresh product inspections was $16.37 million, while expenses were near $16.49 million, creating a loss or deficit of about $116,000.
For food safety audit services, the USDA said fiscal 2018 revenues were $811,000 while expenses were $1.89 million. That resulted in a loss or deficit of $1.08 million for audit services, according to the USDA.
Fiscal 2018 revenue for processed products was reported at $43.05 million compared with expenses of $41.16 million, leaving a profit or surplus of $1.89 million.
The agency did not say how much rates would increase in October. The United Fresh Produce Association could not immediately be reached for comment on the expected fee increase.
The USDA said its inspections and audit services were part of what is being called the “Specialty Crops Program Modernization Initiative.”
According to the update, the USDA’s Agricultural Marketing Service Specialty Crops Program is modernizing into a “more data-driven, customer-focused” org.
“By developing an agile consolidated business system – the (Specialty Crops Program) is shifting away from aging systems for billing, inspection, and certificate processes & paper-based processes,” the agency said.
Instead, the USDA said its new system will employ business software that streamlines inspection, grading, auditing, laboratory analysis, billing and productivity reporting activities into a single platform.
“Specialty Crop Initiative 2.0 will offer innovative business capabilities including data analytics, dispatching, and digital certificates and billing information for both the Specialty Crop Program and the industry to make essential marketing decisions, assess productivity, improve operational efficiencies, and make strategic business decisions,” the agency said.
The USDA said the software will also make it easier for exporters to ship their products overseas by speeding the way permits are issued by providing electronic certificates to users.
Inspection service concerns
The modernization initiative comes at a time when concerns are being expressed about the adequacy of current staffing levels.
Tom Yawman, former USDA inspector and founder of International Produce Training, Winchester, Va., said in an email that many fruit and vegetable companies tell him that they have problems in obtaining timely USDA inspections when requested by their vendors.
“It is reported that it often takes two or three days before an inspector can make it to a facility, this for a “perishable” product,” he said. “The cost of inspections is also often prohibitively high as well.”
Yawman said that he has heard inspection fees as high as $2,000 for a single trailer or lot. In those cases, no federal or state inspectors were available in the area of the warehouse requesting the inspection and another inspector had to be “flown in” to do the inspection.
A spokesperson for the USDA was not immediately available for comment on industry concerns about the program.
Yawman said that in years past, the USDA inspection service had offices in many more locations than they do now. Inspection offices in Buffalo, N.Y., El Paso, Texas, Norfolk, Va., Providence, R.I., Louisville, Ky, and Salt Lake City, Utah, have all been closed.
“Add the more recent closures of offices in Denver, Colo., Indianapolis, Ind., and Milwaukee, Wisc., and the problem of receiving timely, cost-effective federal inspections has gotten much worse,” Yawman said.
In same way federal offices have been closed, Yawman said federally-licensed State counterparts have all but shut down their inspection programs too, noting that programs in Ohio, Utah, Indiana, Wisconsin, Virginia, and North Carolina, among others, “are either a shell of once they once were or have closed down completely.”
Yawman said many federal offices that have remained open have seen significant reductions in the numbers of inspectors assigned to that office.
“This has left little or no options for shippers and receivers of fresh produce with regard to receiving federal inspections on their products,” Yawman said. “Remember, the Perishable Agricultural Commodities Act (PACA) has always mandated the Federal inspection as the “final say” in settling disputes between buyers and sellers of fresh fruits and vegetables.”
With reduced inspection services available, Yawman said industry requests for International Produce Training to conduct inspection training classes has continued to increase. He said that is mainly because many companies now must rely on their own USDA-based quality assurance programs to develop and evolve into a credible inspection option for their vendors.