USDA, AMS, Specialty Crops Program Fiscal Year 2015 summary

The Agricultural Marketing Service (AMS) Specialty Crops Inspection Division (SCI) provides grading, inspection, certification, and auditing services that facilitate the marketing of U.S. specialty crops and related products. These services are provided on a user-fee basis. Ninety-seven percent of SCI’s annual budget is derived from user fees collected for services provided. Fees for these services have not increased since 2007.

SCI’s user fees are held in two functional area trust funds: Processed Products Inspections and Fresh Products/Terminal Market Inspections. In FY 2015, SCI collected $54.3 million in user-fee revenue in these funds.

During the same year, SCI’s expenses for inspection, grading, and auditing services totaled $58.5 million. Under the Agricultural Marketing Act of 1946, SCI must collect fees to cover the cost of providing services. USDA entities with user-fee funded trust fund accounts also must maintain a reserve balance that is sufficient to cover shutdown expenses should voluntary service cease. Generally, this amount would be equal to roughly 4 months of operating costs.

AMS is improving the availability of information about its inspection service trust fund accounts by providing summary-level revenue and expense data on an annual basis. This data is intended to provide a concise overview of the overall financial status of user-fee funded accounts.

In November 2014, AMS published a final rule changing how it adjusts fee rates for user-fee services. Instead of notices soliciting comments each time an AMS unit needs to adjust a specific rate, AMS published the formula used to develop these rates in the Code of Federal Regulations. To complement the formula, which is now part of the regulations that detail how the agency operates, AMS publishes an annual public notice listing the specific fee charges. AMS is currently reviewing financial data in preparation for the next fee notice, which contains FY 2017 rates that will be charged as of October 1, 2016. The notice is scheduled for publication in the spring of 2016.

In the last several years, SCI has increased efficiency by consolidating and closing offices, streamlining its management structure, cross training employees, and improving information technology capabilities. In FY 2015, SCI had 420 full-time staff members, a 5 percent decline from FY 2014’s total of 442, and a nearly 10 percent decrease from FY 2013’s total of 461. In FY 2015, SCI completed a major restructuring that reduced its field offices with independent management from 41 in 2013 to 14. In addition, SCI is in the midst of a multi-year plan to consolidate offices. To date, SCI has consolidated from 12 offices into 6 offices; the Division is continuing to identify ways to maximize efficiency with its presence in key geographic regions. 

During FY 2015, SCI continued to help America’s specialty crops industry successfully market fresh and processed products. To increase the uniformity and consistency of inspections and data management across the nation, SCI acquired and implemented standardized inspection software for both the peanut and onion inspection programs. Building on SCI’s proud tradition of supporting America’s military veterans through hiring and process improvement, SCI was integral in improving combat ration packaging that resulted in estimated annual savings of $24 million for the U.S. Department of Defense. SCI continues to innovate, providing customized quality assurance solutions, such as the Quality Monitoring Program (QMP), which provides an alternative to traditional inspections in the form of a flexible, cost-effective, quality assurance service that offers third-party monitoring of product quality and quality systems for fresh, frozen, and processed fruits and vegetables as they are received, handled, and/or produced.

In FY 2015, SCI conducted more than 4,000 audits to verify that fruits and vegetables are produced, packed, handled, and stored in the safest manner according to Food and Drug Administration guidelines. Building on a successful pilot, SCI created GroupGAP, a new food safety certification program designed to increase opportunities for the entire specialty crops industry to supply and buy USDA Good Agricultural Practices (GAP)-certified produce by making USDA GAP certification accessible to all growers. During the fiscal year, SCI began work to set up an auditing fee structure and trust fund to ensure full cost recovery and financial transparency for the audit program. This will lead to separate reporting of SCI audit revenue and obligations in FY 2016.

In FY 2015, SCI continued to expand and refine its training options to ensure the integrity of inspection results, improve the quality and uniformity of services, and increase the expertise and professionalism of its workforce. SCI classes trained more than 3,300 Federal, State, and industry participants on inspection, grading, auditing, Good Agricultural Practices, food safety (as part of Produce Safety University), and product inspection in collaboration with United Fresh Produce Association. Courses also provided train-the-trainer and basic instructor training and supervisory training. In FY 2016, SCI will continue to innovate its training capabilities and pursue other opportunities to help the produce industry on a larger scale.

For more information, please visit www.usda.gov.