International Produce Training

About a week ago I had the pleasure of paticipating in an on-line chat with Tom Karst, National Editor of The Packer.  He asked me a few questions about International Produce Training, what we offer to the produce industry and a few questions about my experience with the USDA, during the bribery scandal in Hunts Point.

The entire chat can be found here:  Fresh Talk Blog 

A few people have asked me follow up questions surrounding Hunts Point, and the future of the USDA Inspection Service.  While being a trainer for the USDA, for about 7 years at the Training and Development Center in Fredericksburg, VA I was able to meet and get to know every terminal market inspector in the country.  At the Training Center we first started to provide two week refresher classes for every Federal and Federal State Inspector.  A 10 week class for new inspectors was created and held on an annual basis.  Each of these courses devoted much time to ethics training, customer service and professional skill training, as well as extensive hands on grading exercises for technical training.  Due to financial problems within the USDA’s inspection program, the two week refresher classes were cut back to a mere 6 hours of on-line training last year.  The annual new inspector training course has been cut back to an 8 week course, and has only been held once during the past three years.

The spacious Training Center is in the process of being scaled down, eliminating the computer class room, eliminating the library, and moving the grading lab to another location within the building.  Will these cutbacks in training and resources have an adverse affect on the workforce?  It most definitely will.  Couple the loss of training with the loss of personnel through layoffs and attrition, and there is problem brewing within the inspection ranks.

I was asked if I thought another “Operation Forbidden Fruit” could occur.  It was a very dark day period of time for the inspection service.  Many thought it was the end of the program. The produce industry had lost complete faith and trust in a service that depends on trust.  The inspectors have done a terrific job of resurrecting the service, maintaining the credibility of the program was paramount, and despite the decisions by management to increase Washington, DC overhead, cut back personnel in the field offices and training opportunities for everyone, the inspectors, the workers, have done an admirable job of providing the best service they can.

The state of New York is facing real budget problems, just like practically every other state in the country.  But what makes New York unique is the governor has now targeted the USDA Federal State Inspection program, run by New York’s Department of Agriculture and Markets Farm Products Grading Section.  In  Governor Patterson’s executive budget released a few days ago he states:

• Discontinue Agriculture and Markets Farm Products Grading. Farm products wholesalers would work directly with existing private entities to grade products for quality and potential price, rather than use State resources. The State currently provides the service for a nominal fee, which is now inadequate to support Department expenses. Existing Federal funding for a portion of the program would continue. (2010-11 Savings: $426,000; 2011-12 Savings: $1.3 million)

I have no idea if this portion of his budget will actually pass the legislature, but it none the less has placed a bulls eye on the fresh products inspection program in New York.  Will the inspection program be eliminated, replaced, down-sized or left alone, is any one’s guess right now.

I have personal first hand knowledge of the New York program, as I began my inspection career with them in 1976.  I know many if not all of the inspectors and supervisors.  For those not familiar with the program ramifications of a closure, the state of New York supplies fruit and vegetable inspectors to the wholesalers in Rochester, Syracuse, Albany…..and they recently assumed the inspection duties of Buffalo when the USDA eliminated their service to those applicants.

They also perform shipping point inspections, which could have a detrimental affect on the marketing of NY state produce.  Apples being shipped out of the country have to undergo a manadatory inspection, to meet the requirements of the Apple Export Act.  Without this inspection the apples do not leave the U.S.   Potato shippers also have to undergo a mandatory inspection, for Canada to receive them.   If a grower would like to participate in the USDA’s Commodity Procurement Program, they too have to receive a mandatory USDA/Federal State inspection.

As the governor states, they will utilize a third party inspection company (existing private entities) to handle the inspection requests.  Well, that would mean the USDA would have to recognize an independent third party as a licensed entity to handle their inspections.  Currently Pennsylvania Department of Agriculture utilizes a third party.  Aside from 3 state supervisors, the entire inspection workforce is made up of employees from the Fruit andVegetable Inspection Association of Pennsylvania…..and yes, the USDA does recognize them as USDA federal/state licensees.

Could New York do the same?  The short answer is “yes”, but I have a feeling the fruit and vegetable industry of New York will have a  lot to say about this proposed change.  I will say this, many other state programs are watching closely what happens in New York.

A lot has happened since that infamous day in the Bronx.  With the USDA Inspection Program on the brink of collapse, due to the lack of faith and trust from the produce industry, they were able to win back most of the support and stay in business.  And “business” is what it is.  The USDA struggles to keep its revenue reserves in the black as this user-fee funded program takes on additional costs to keep in place the many improvements during the past few years.

But the big question, can they keep the improvements going?  After the dust finally settled, and the guilty inspectors were prosecuted, the USDA was on the verge of eliminating the inspection program.  Industry had lost trust in the government inspectors, and the inspection fees, the revenue needed to keep the program running, were down.  With industry help and intense lobbying, Congress gave the USDA Inspection program over $40 million of tax payer money to make improvements to the inspection program.  One of the catches with this appropriated money was not to raise inspection fees for 5 years.  Also, about $11.5 million was dedicated to infrastructure improvements, such as the Training and Development Center in Fredericksburg, VA.

Unfortunately the $40 million was a one-time gift.   The USDA did create the training center, but the expenses of keeping the center are just too much.  The USDA is undergoing a major downsizing process of the training center, eliminating much of the training space.  The center’s major responsibility was holding an annual ten week training course for all newly hired USDA inspectors.  During the past three years (2008, 2009 and 2010) only one new inspector training class has been held, and the course has been shortened to 8 weeks.   What were once annual two week refresher classes, held for every USDA and Federal State inspector, these were reduced to 6 hours of on-line training this past year.

The appropriated monies also went to the purchase of lighted inspection grading tables to be used in markets throughout the country…..but money is no longer available for their upkeep and replacement.  Most of the grading tables are serving other purposes than they were once designed. 

Digital cameras were also purchased, for the inspectors to use on every inspection, as proof of their inspection findings.  Digital images are now only being taken at the request (fee based) of the applicant.  Inspection teams were to be put in place, as the USDA thought the idea of two inspectors would police each other.  Simply put, the USDA no longer has the revenue resources to commit two inspectors to every inspection.

The USDA has made great strides in seeking new revenue streams, such as the GAP/GHP Food safety audits and increased inspection fees.   Inspection fees have been raised during the past few years, a 15-percent fee increase for fiscal years 2004, 2006, 2008, were put into place.  Taken from the USDA’s own Action Plan, a fee increase of 15% is recommended for 2010.

But another 15% fee increase in 201o?  Really?  That’s another story.

Click here for the previous post.

It is hard to imagine but ten years has past by since Operation Forbidden Fruit occurred.  In late October 1999, eight USDA Fresh Fruit and Vegetable Inspectors, including two supervisors were arrested on charges of bribery and corruption.  On a personal note, I was one of the replacement inspectors called in that day, to continue inspections at the Hunts Point Market in NYC, after the majority of the inspectors were whisked away in handcuffs.  A day I will never forget.

“Operation Forbidden Fruit” was led by the USDA’s Office of Inspector General assisted by FBI and USDA’s Agricultural Marketing Service. The investigation observed a scheme over a three-year period where receivers allegedly were bribed to lower the grade of produce. The receiver then renegotiated a reduced price with the shipper. The inspectors then kicked back a percentage of the bribes to their supervisors.

The indictment allegations declare that inspectors routinely took cash payments of around $50 from the owners or employers of the wholesalers in exchange for agreeing to downgrade produce. According to the 65-count indictment, some inspectors have been taking bribes since 1980. It is alleged that some inspectors may have earned as much as $100,000 off-the-books.

The investigation stemmed from grower complaints over lower produce prices at Hunt’s Point. Growers claimed they felt they were being cheated and wanted to end their association the New York produce market.

In the next few posts I will take a look back at the fallout of the bribery scandal, the improvements the USDA took, and the ramifications from the dwindling resources of the USDA Inspection Program to keep these improvements in place.

Click here to continue.

International Produce Training (IPT) is pleased to announce a partnership with Southeast Produce Council, Inc, to provide two produce inspection training classes in 2010.  The first class is scheduled for May 19-20, 2010, and the second two-day training class will be offered later in the year, in October.  Both classes in 2010 will be held at Merchants Distributors Inc, Hickory, NC.

 The training class agenda, along with registration information can be found at Southeast Produce Council’s web site.  Click here for more information.  The training class is open all members of Southeast Produce Council as well as non- members.  Unfortunately the class size is limited to the first 20 registrants.

The second training class will cover  inspection procedures on entirely different commodities from the first class.  Opportunities to choose which commodities for the class will be made available during the May class.

I hope you are able to take advantage of this opportunity to hear of new inspection procedures, to ask questions about identifying defects, and work hands on with the product as we identify and review the scoring guidelines of  the many commodities covered in the training class.

If you have taken notice, there has been quite a bit of news recently involving produce recalls involving green onions and spinach.  Various blogs are posting comments related to recalls in general, the responsibilities of industry, and the blame on the food safety auditing firms.  The Leafy Greens Marketing Order (LGMA) has taken the brunt of the criticism as the recent food safety incidents may have originated from California farms or packing houses.  I want to emphasize the word “may,” as the FDA is completing their investigation.

I have nothing negative to say about the LGMA and their auditing program.  About two years ago I accompanied an auditor from the California Department of Food and Agriculture and witnessed first hand the many technicalities involved in the food safety plans and audits. 

Many of the states also have started up food safety audit programs, under the licensing guidelines and authority of the USDA Fresh Products Branch, within the GAP/GHP Program.  These auditors do have to meet some minimum qualifications.  I could not find any official qualifications from the USDA, but I did come across the minimum qualifications of a USDA/Oregon GAP/GHP auditor:

• Must be an Oregon Department of Agriculture Employee and a USDA licensed produce inspector
• Must have completed and passed a USDA auditor training class
• Must have completed food safety training and receive continuing food safety education
• Must shadow and/or be supervised by a licensed GAP/GHP auditor for a minimum of three audits

The discussion that is brewing is the fact the USDA is blocking the use of private third party audit firms from USDA programs.  Is this a good idea?  For example, the LGMA requires all participating firms to use the USDA/Calif auditing program.  Included in the federal register notice, for a national leafy greens marketing order is the same language, mandating the use of the USDA Inspection Service (and state cooperators) as the auditors.

Should the USDA restrict the use of audit firms, under this program?  The USDA also mandates that any shipper selling their product to the USDA’s Commodity Procurement Program (School Lunch purchases) must also be audited by the USDA Inspection Service.  I have nothing against the USDA’s audit program, but should it be the only act in town?  Many growers are already required to utilize other third certifications, such as SQF, and GlobalGap for their marketing needs.  The expense involved for setting up and adhering to these requirements can be costly, and no one will disagree these certifications are harder to achieve than a USDA GAP/GHP certification.  Shouldn’t the USDA recognize these higher certifications as being acceptable?  After all, the companies don’t just hire anyone off the street.  A check on the minimum requirements for a Food Safety Auditor for Primus include:

• Bachelor’s degree in Agronomy or related food or environmental science
• Minimum of 1 to 2 years of auditing experience 

It does appear many in the produce industry are beginning to question the mandated use of the USDA Inspection service for their audits.  If they already have a program in place, a better program, shouldn’t that be good enough for the USDA?  Everyone realizes the USDA is placing this restriction to guarantee a constant source of revenue, to help stabilize their inspection program.  But should money for a government program overshadow the costs placed on an already stressed industry?

And lastly, if you are interested in reviewing a very well written GAP/GHP Process please take a look at this document created by the Washington Department of Agriculture.  It is easy to understand and may answer many of your questions pertaining to preparing a food safety plan.  Washington State GAP/GHP Document

I received a phone call from a worried industry member this past week as he told me of some recent shakeups in the Department of Agriculture in the commonwealth of Pennsylvania. With the state budget not having been signed, cuts were made throughout the state, including some key spots in Agriculture.

The first key position eliminated was the State Program Manager position, the person in charge of the entire state inspection program.  Having been a USDA federal supervisor for about 14 years, supervising the state’s fruit and vegetable inspection program I can tell you from experience the state inspectors do a little bit of everything.  They inspect apples, peaches and potatoes at the packing houses; they inspect apples, peaches, cherries and grapes at processing plants; and they inspect every type of fruit and vegetable at terminal market warehouses throughout the state.  On top of that Pennsylvania is one of the leading states in performing third party food safety audits, many of them required under the USDA’s school lunch program.

Having the program manager’s position eliminated leaves many question to the oversight of this program.  In addition another important position was eliminated, the supervisor of the largest apple and peach growing area within the state.  These producers rely on the inspection service to provide inspections mandated by the USDA, such as school lunch purchases, apple inspections to meet the requirements of the export apple and pear act, and mandatory third party food safety audits for the school lunch purchase program.  With no supervisor in the area, the industry is questioning the future of their inspection service.  With no inspection service, their ability to export apples and participate in the school lunch purchase programs will be in jeopardy. 

Everyone has known for the past few months some state inspection programs would be in trouble.  Last year there was even talk in New Jersey of eliminating the entire New Jersey Department of Agriculture.  No one knows what will happen to the inspection program in Pennsylvania.   The dust has barely settled.   The positions have been eliminated so now it will be up to the state managers and the USDA to work out an agreement allowing the service to continue with less supervision and oversight.

It also appears industry may be taking a few more steps away from other USDA programs in anticipation of pending state budget cuts across the country.  Some major chains are performing their own food safety audits on their suppliers.  Bypassing the USDA or private third party audits, the chains are sending their own trained auditors into the packing houses to perform their own audits.  I would assume the major reason is to audit to their own specifications.  They also control the audit frequency and the audit follow-up visits.  Will more and more companies follow suit?   If more states lose key positions as did Pennsylvania, they just might.  I guess we will find out in the coming months.

Within the last week the USDA has ceased offering inspections to the cities of Buffalo, NY and El Paso, TX.  Although applicants can still request inspections, it is going to cost much more and the convenience of receiving a timely inspection may be a thing of the past.

So what are the options?  Well there seem to be two choices.  Applicants (wholesalers and shippers alike) can call the Rochester, NY inspection office and request an inspection for Buffalo.  That option is not too bad as NY State Department of Agriculture does have a couple of inspectors assigned to that portion of western New York .  Although the expenses for an inspection may be higher, overtime may be necessary, the timeliness of inspection may not be too bad.

El Paso may be another story.  Applicants will be encouraged to contact the Dallas, TX office for any inspections in the El Paso area.  Unfortunately Dallas is some 600 plus miles away from El Paso, so driving will be out of the question.  Unless the USDA offers an alternative, the Dallas inspector(s) will have to drive to the Dallas airport, park their car, board a flight to El Paso, rent a car and drive to the point of inspection.  I would assume the applicant will liable for all expenses involved in the trip……not to mention paying the $151 inspection fee.  If the USDA decides to add on the travel time, expect another $74 for every hour, to and from El Paso.

So what’s the other option?  The other choice is to fore-go the costs of the USDA inspection altogether.  As more and more receivers are placing a greater emphasis on their own in-house inspection, shippers are becoming more and more acceptable of the inspection results.  Receivers and shippers came to that conclusion in Salt Lake City, as the USDA closed the doors on the inspection service there last year.  If push comes to shove, shippers have been moving rejected loads to another destination and calling for inspections in those markets. 

It seems as if the trend of the USDA is to shut down offices in markets that are in the red.  We may be seeing a few more offices close shop in the coming years.  Maybe another inspection fee increase is in the works, but there is limit as to just how much they can charge for inspections before the users of the service say enough is enough.  Time will tell.  It may be time to increase the skill level of your quality assurance personnel.

Although much attention has been given to the future of the USDA’s federal inspection program, there is more reason to be concerned over the state’s own fruit and vegetable inspection programs.  To begin with, there are approximately 1500 USDA federally licensed fruit and vegetable inspectors working across the country, performing inspections at shipping points, processing facilities and receiving markets.  These state employees are supervised with federal oversight, and the state departments of agriculture pay a percentage of their gross inspection receipts to the USDA Fresh Products Branch to participate within the federal inspection program.

Conversely, there are approximately 175 USDA, federal employees that perform fruit and vegetable inspections in 33 markets across the U.S.  The USDA is a user fee funded program, relying on inspection revenue from their own inspectors and overhead revenues from the states’ inspection programs to keep their program in the black.  When revenue begins to fall in their inspection program, the inspection program, being a part of the Agricultural Marketing Service (AMS), has access to millions of dollars from other AMS programs to rely on, to bail out the Fresh Fruit and Vegetable Inspection Program.  In other words, the federal program is here to stay.

The same cannot be said of many state inspection programs.  In the news this week, there are drastic cuts planned for the Department of Agriculture in Pennsylvania.  From a newspaper article dated May 6, 2009, “Calling it a devastating blow, Department of Agriculture Secretary Dennis Wolff said a budget proposed earlier this week by Senate Republicans—and passed today by a party-line vote—would create considerable challenges for farmers already grappling to survive a difficult economy. Wolff said Senate Bill 850 would mean another $9 million in cuts for the department above the difficult, but practical, reductions Governor Edward G. Rendell made in his budget proposal. The Senate-approved plan would strip away all state funding for many programs that benefit farmers, including crop insurance, agricultural research and economic development programs, such as PA grows and the centers for Dairy and Beef Excellence, which are designed to keep farms financially secure.”

With PA state employees looking at possible furloughs, or layoffs at the passage of the July fiscal year budget, what will be the affect on the inspection program?  For example, Pennsylvania state inspectors currently perform all possible inspections, inspecting fruit and vegetables at shipping points, at processing plants, and at receiving markets throughout the state, a microcosm of the nation.  Who will continue to offer these inspection services?
Of course they are not alone in this budget crisis, states that already have furloughed employees are: California, Connecticut, Maryland, Massachusetts, New Jersey, Ohio, Oregon, North Carolina and Georgia. And in the near future, the states of Arizona, Washington and Michigan are looking to follow suit during their next fiscal year.

 Last year New Jersey came very close to eliminating the entire Department of Agriculture and there are reports it could happen in Pennsylvania The inspection programs in the states will be very unsettled during the next few months, as they have no other programs that can bail them out.

A USDA inspector suggested I place a little additional information related to the inspection fees charged for their inspection work. The most recent fee increases took place a little over a year ago, but if you visit my Links page you will have access to the most recent inspection fees.

The fee chart is fairly easy to read, with the basic fee, for a full trailer load of one product, the fee is $151.  Remember the mileage fee is in addition, $1.32/mile, for roundtrip mileage between the USDA’s office and the place of inspection. 

The confusion begins when mixed loads are involved.  Different lots of the same commodity, the fee will be $151 plus an additional $69 for each lot.  For example;

• 600 cartons of white grapefruit and
• 2oo cartons of ruby red grapefruit

would result in an inspection fee of $151 plus $69, totalling $220.

If you have different commodies each commodity stands on its own.  Inspecting a mix load of citrus; 

• 200 cartons oranges,
• 200 cartons lemons,
• 200 cartons limes and 
• 200 cartons grapefruit

would total about $500. 

A rail car of citrus containing;

• 600 cartons oranges,
• 600 cartons grapefruit,
• 550 cartons lemons and
• 150 cartons of tangerines

for a  total of $578.

As you can see, the inspection fee does vary on the number of containers in the lot.  The USDA has developed a carlot equivalency chart, to define the number of containers in a full load and half load.  If the the number of containers of the  product to be inspected is less than a half a trailer load, the inspection fee is $125, versus, the $151 fee for a full trailer load.  If you request an inspection on:

• 75 cartons of green leaf,
• 150 cartons of romaine,
• 55 cartons of escarole,
• 60 cartons of endive,  
• 75 cartons of iceberg lettuce,

the inspection fee would be $125 for each lot (5) totalling $625.

Click on the link to open, print, or download the carlot equivalency chart.   Carlot Equivalents Chart