PACA fees should increase to offset shortfalls, says committee
PACA fees should increase to offset shortfalls, says committee
WASHINGTON -- Viewed as a valuable program by produce businesses, PACA bars unfair and fraudulent practices in fruit and vegetable trade and provides a means of enforcing contracts. Under PACA, buyers and sellers of commercial quantities of fruit and vegetables must be licensed by USDA, and those that violate these contracts may be required to pay damages.
With the program facing a budget shortfall in 2012, USDA should raise the PACA licensing fees in 2010, USDA's Fruit & Vegetable Industry Advisory Committee concluded at its two-day meeting, here. The group proposed raising licensing fees to $1,000 from the current $550 as a safeguard to protect the trust fund from falling below 25 percent in 2012.
Other fees should be increased, too, said the group. Fees for filing informal complaints should be increased to $100 from $60, and paperwork associated with filing formal complaints to $500 from $300.
PACA audits, which cost the USDA an average of $6,500 to complete, should be increased substantially to $1,000 for licensees and $3,000 for non- licenses, said the advisory committee's recommendations.
Under the current program, audits are covered by the $60 filing fee, and while this is a bargain for companies, it falls short of covering the $600 per day costs for USDA, said the PACA Working Group, which had been developing the fee-restructuring proposal for months. Last year, USDA conducted five audits, but the year before PACA complaints led to 30 audits. There will need to be an outreach effort to educate businesses on the benefits of PACA and the need for the fee increases, said Matt McInerney, executive vice president of Western Growers Association, one of the committee members that helped draft the proposal.
USDA would have had to increase the fees earlier if it didn't get the $30 million boost from Congress in 2000.
USDA's Robert Keeney said that the Agricultural Marketing Service was stepping up educational efforts because it is finding that new employees with produce businesses are unaware of PACA's benefits.
At the meeting, Mr. Keeney announced a new customer service hotline, which was born of an earlier suggestion from the produce industry advisory committee, which will provide callers with immediate and consistent advice on a variety of PACA topics.
The PACA customer service line (800/495-PACA) is staffed Monday through Friday from 8 a.m. to 7 p.m. EST. Fruit and vegetable businesses can call to get answers to questions involving licensing information, inspection reports, contract disputes and other PACA program issues.
With the program facing a budget shortfall in 2012, USDA should raise the PACA licensing fees in 2010, USDA's Fruit & Vegetable Industry Advisory Committee concluded at its two-day meeting, here. The group proposed raising licensing fees to $1,000 from the current $550 as a safeguard to protect the trust fund from falling below 25 percent in 2012.
Other fees should be increased, too, said the group. Fees for filing informal complaints should be increased to $100 from $60, and paperwork associated with filing formal complaints to $500 from $300.
PACA audits, which cost the USDA an average of $6,500 to complete, should be increased substantially to $1,000 for licensees and $3,000 for non- licenses, said the advisory committee's recommendations.
Under the current program, audits are covered by the $60 filing fee, and while this is a bargain for companies, it falls short of covering the $600 per day costs for USDA, said the PACA Working Group, which had been developing the fee-restructuring proposal for months. Last year, USDA conducted five audits, but the year before PACA complaints led to 30 audits. There will need to be an outreach effort to educate businesses on the benefits of PACA and the need for the fee increases, said Matt McInerney, executive vice president of Western Growers Association, one of the committee members that helped draft the proposal.
USDA would have had to increase the fees earlier if it didn't get the $30 million boost from Congress in 2000.
USDA's Robert Keeney said that the Agricultural Marketing Service was stepping up educational efforts because it is finding that new employees with produce businesses are unaware of PACA's benefits.
At the meeting, Mr. Keeney announced a new customer service hotline, which was born of an earlier suggestion from the produce industry advisory committee, which will provide callers with immediate and consistent advice on a variety of PACA topics.
The PACA customer service line (800/495-PACA) is staffed Monday through Friday from 8 a.m. to 7 p.m. EST. Fruit and vegetable businesses can call to get answers to questions involving licensing information, inspection reports, contract disputes and other PACA program issues.
