International Produce Training

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

One of the most interesting reactions I receive during my training classes, is the discussion that follow questions about appeal inspections.  To begin with, appeal inspections are used when a receiver or a shipper of produce feel the inspector errorred in judgement.  They request an appeal inspection, on the chance the new inspection will supersede or reverse the original inspection.

Most industry members (receivers and shippers alike) feel the process is geared to protecting the original inspector.  I am not going to defend or trash the process, but I will admit during my 30 plus years with the inspection service I have witnessed some amazing decisions regarding appeal inspections.  Most of the training participants have no faith in the system at all, pointing out the inspectors performing the appeal inspection have the previous results in hand and are going to score or not score defects to keep the results very close, thereby resulting in very few reversals of the original inspector.

To be fair, when an appeal inspection is requested the follow-up inspectors are supposed to consist of two different inspectors, and at least one being a supervisor or a more seasoned inspector.  Unfortunately, due to the budget woes, many offices are being downsized leaving fewer options for choosing capable inspectors to handle appeal inspections. But the comment I hear most often is, “The two inspectors performing the appeal inspection are from the same office as the original inspector, most likely friends and will protect him or her.”  And my answer to that comment is “Yes, the appealing inspectors are most likely from the same office as the original inspector,” and I leave it at that.

But all is not lost.  If you feel you have a legitimate disagreement with the appeal inspection results, you can always opt for the next step, request a formal review.  A formal review will consist of two inspectors from a different office to handle the inspection.  But beware, win or lose, you will be responsible for the expenses for the two out-of -towners, paying for mileage, overtime, and possibly airfare, rental car, per-diem and hotel expenses.

In a future post I will offer some advice as to the best times to request an appeal, as well as advice as to how to head off a disagreement with an inspector, avoiding the appeal process altogether.

With the economic crisis placing a huge burden on state budgets, will the USDA Federal State inspection programs be able to withstand these tough times?  During my many years as a state employee, a Federal Supervisor, and later as a Federal Program Manager, I would never have predicted that state budgets would reach into the state inspection reserve funds.  I was always led to believe these inspection funds were safe, were set aside as revenue generated from the growers using the inspection program, and could not be tapped by the state’s general funds.

It appears this economic crisis is changing the rules.  A blogger sent me a newspaper article from the Denver Post, dated 1/14/09, which states,

“So while the Department of Agriculture raised the $79,430 to hire five seasonal potato inspectors itself, that money is also at the legislature’s disposal as it tries to deal with budget cuts eleswhere, according to Tom Lipetzky, director of agriculture’s division of markets.”  It goes on to say, “In budget crises of yesteryear, lawmakers have raided those fund to help balance the budget.  (Gov. Bill) Ritter has said he has similar designs this year on part of those funds.”

As the states prepare for the possibility of losing some of their reserve funds, funds they use to hire their inspectors, train their inspectors and manage their inspection programs, they will have to make some adjustments and changes to compensate.  They could ask the USDA to lower their overhead charges imposed on their shipping point inspection programs, they could raise their own inspection fees, or they could institute workforce reductions or other cuts in expenses.

You have heard the phrase over and over, “It fails to grade, but it makes good delivery!”  What does this mean?  PACA uses these guidelines to determine if a load of produce meets “Suitable Shipping Condition,” a requirement for shippers to meet their contractual agreements.

First let’s clarify the ground rules.  Good delivery applies to FOB Sales only, meaning the buyer takes title at shipping point for a product he/she has not seen.  The buyer may reject or claim damages chargeable to the shipper, only if it can be shown the product was not in suitable shipping condition when title passed at shipping point.  In other words, this warranty requires the shipper to place the product “free from on board” (FOB) so that it will make good delivery.

A couple of other points are very important.  a) The Good Delivery Tolerances or Guidelines only apply to condition defects, if no grade is specified in a contract.  b) And there must be no transportation problems.  Transportation problems will result in claims instituted by the buyer against the trucking company, or railroad.

Example 1, Cucumbers are inspected and found to contain 33% quality defects, misshapen and scars and 12% damage by shriveled ends.  This lot would fail to grade U.S. No.1, but it would meet good delivery tolerances of 15% total (condition) defects, if no grade was specified.

Example 2, Romaine is found to contain 11% damage by yellow to black discolored leaves, and 4% decay.  This lot would also fail to grade U.S. No.1, but would meet the good delivery tolerances of 15% total defects, including 4% decay.

Example 3, Strawberries are found to contain 16% damage by bruising and 5% decay. This lot would fail to grade U.S. No.1 and fail to meet the good delivery tolerances of 15% total defects and 3% decay.

Example 4, Peaches are found with arrival temperature of 50°F, with a delay in delivery. The peaches have 20% damage by bruising and 8% decay.  The good delivery tolerances are 17% total defects, including 4% for decay. The shipper’s warranty of suitable shipping condition and good delivery guidelines are not applicable.  The buyer holds the transportation claim.

For a complete list of Good Delivery Guidelines,  go to the Inspection Guidelines page.  Remember, these tolerances are only guides and not final authority. You should contact your local PACA office for an official determination of your rights and responsibilities.

I am curious to hear everyone’s reaction to the idea of “Private” companies performing inspections.  When I began my USDA inspection career in the late 70′s there was a private company (Eddie Ross) performing inspections for the applicants in the Philadelphia Terminal Market.  And we all remember the Railroad Perishable Inspection Agency (RPIA) performing inspections on the many rail shipments.

During my time in Philadelphia there were many private inspection firms offering surveyor reports and quality assurance inspections on the Chilean Fruit entering the country.  One company in particular (Surveys Unlimited) was actually founded by my colleagues, former inspectors from the Philadelphia USDA inspection office. 

I know some companies offer different services, some offer inspection at the shipping point/packing house level, while other companies offer inspection at the receiving points.  Even some state departments of agriculture offer state inspections, not associated with the USDA inspection service.

One company in particular, Ag World Support Systems has been finding new customers for their private inspection work from coast to coast.

Do you think private companies will be the wave of the future, or do you think some will come and some will go, as has happened throughout the past 30 years?  Your thoughts!

Effective September 30, 2008 most retailers will be mandated to adhere to the policies regarding the country of origin labeling for all fresh fruits and vegetables.

Please refer to the following link Country of Origin Labeling Requirements regarding news, information and contacts for this requirement The main point of contact for questions or concerns you may have, concerning COOL is: 

Martin E. O’Connor, Chief

USDA-AMS-LS-SAT

Room 2607-S, Stop 0254

1400 Independence Avenue, SW

Washington, DC 20250-0254

(202) 720 – 4486