What is the value of U.S. Department of Agriculture destination inspections for the produce industry?
I posed the question to the LinkedIn Fresh Produce Industry Discussion Group in this way:
How has the role of USDA inspections for fruit and vegetable arrivals at destination changed in the past 20 years? Are USDA inspections still valuable in protecting the interest of growers in light of growing concentration in the retail sector? Do you see any changes in the system over the next decade?
A follow-on question from me was “What would happen if USDA no longer did destination inspections? Are they still needed?"
For those without a lengthy background in the industry, it might be instructive to first recall The Packer’s coverage by Larry Waterfield from Nov. 1, 1999:
More than 100 agents arrest eight USDA officials and 13 wholesalers.
NEW YORK -- After a three-year investigation called “Operation Forbidden Fruit,” federal officials have arrested eight U.S. Department of Agriculture inspectors and 13 officers with 13 wholesale produce companies at New York’s Hunts Point Terminal Market on charges of bribery and corruption.
More than 100 FBI and USDA agents swept onto the market in the wee hours of Oct. 27 to make the arrests, some of them at the terminal’s largest operators.
The scheme leading to the arrests involved market wholesalers allegedly paying bribes to more than half of the terminal’s inspectors to downgrade produce shipments, which in turn saved receivers thousands of dollars during the past two decades.
TK: Fast forward to 2018, and a thousand and one reforms have taken place to put the inspection service in a better place. Newly named U.S. Department of Agriculture Agricultural Marketing Administrator Bruce Summers has helped lead the way in listening to the industry and aiding reform efforts post Operation Forbidden Fruit.
Still, one of the responses in the discussion group expressed the opinion that “still payoff happening.”
Here are some other responses from the group about the topic, which one member said was “too hot to handle.”
TT: Why is the question framed “in the interest of the Growers?” Do all Growers need “protection” from “retail giants”? Why? When many grower/shippers accept rejections from the largest chain accounts these days without a USDA. Rejected merchandise arrives in markets and “Makes Good Delivery” and at times US#1. The inspection program is now substantially supported by the wholesale and smaller sections of our industry these days, and that with an increasing cost. Another issue is the caliber of state Ag or other “designated” officials doing inspections. Recent experiences indicate that a lot more training is needed if those folks are to be empowered to write Federal inspections. The idea of a Federal inspection is that a “neutral “ party is charged with the responsibility to determine if a “Breach of Contract” has or has not occurred. IF so, it protects the receiver, be it a chain store, wholesaler or food service company. IF not, the grower/shipper is protected from a claim.
JP: From a contractual point of view, I am shipping to a retailer whose private standard interpreted by their in-house inspector determines if the product complied or not. If the standard we a government standard or a private standard which the USDA could verify, then it works. Otherwise, this explains why USDA inspections are obsolete in some commercial areas. In processing grapes, for raisins nothing moves with a USDA cert but for wine grapes the USDA has no role. In fresh grapes , most private standards are above US1. I send a product down a very high tech packing line, say blueberries. EACH & EVERY berry has 27 or 54 hyperspectral images taken - that is, visible light spectrum and infrared spectral and it kicks out the bad one with a shot of air. Sooooo......a human being is going to come in , look at a few berries and add what value to this process?
CA: When we the Export companies and shipper need to show evidence of bad arrival to growers, the USDA inspection is the best Way to show them how it arrived. Many importers and receivers have different kind of Report and standard, so here is the relevance of USDA inspections, it is neutral, clear and is the same form for every Point of supply chain,
Maybe the question is, How improve the USDA Inspections?
PF: Rewriting the USDA standards to where they make actual sense would go a long way in bringing focus to this situation. Forcing all importers to make a grade as spelled out by those new standards would help level the playing field for USA growers and receivers. The larger issue here is that the USDA standards all wrong and in some cases border insane. Example: The USDA claims that the internal maturity of a watermelon is a grade defect, when it should be a condition defect.
The condition is either immature or overripe, which is an internal defect. The invention of better equipment and computers nulls many of the standards that we use today. There needs to be an expansion of inspection offices across the country and more realistic use of the USDA inspection service. We have the ability to use live video and imagining from almost anywhere.
If importers intend to sell into thismarket , there should be a requirement for food safety inspections at shipping/packing point .
PM: I can see a point where the USDA Inspection Service will only provide standardization and/or “appeal” services. With today’s technology (high speed internet, multi megapixel digital imaging, and basically “free” long-distance communication), it must be asked if anyone really needs USDA inspections?
TK: What is your perspective? Are USDA destination inspections practically perfect or a relic from a bygone era?