Leveling the Playing Field on Treatment Fees

Opinion

Originally printed in the January 2018 issue of Produce Business.

Importers and retail grocers throughout the United States could soon feel the impact of increased agricultural treatment fees being implemented by the U.S‭. ‬Department of Agriculture’s‭ (‬USDA‭) ‬Animal and Plant Health Inspection Service‭ (‬APHIS‭) ‬to fund pest mitigation programs in the United States‭. ‬The fees are‭ ‬understandable‭, ‬but the application is unreasonable‭.‬

We believe the problem is easily addressed‭, ‬and the playing field leveled for all U.S‭. ‬ports if inspection fees are billed by volume rather than by unit‭.‬

Until two years ago‭, ‬USDA captured its costs of inspection and treatment in the‭ ‬“conveyance fees”‭ ‬charged to air‭, ‬land and ocean carriers‭. ‬However‭, ‬in 2015‭ ‬the agency created a new‭ ‬“treatment fee”‭ ‬to be charged directly to the shipments that are treated‭. ‬The fee has proven to be inequitable in its impact on trade because it is charged at the same amount for each treatment without regard to‭:‬

•‭ ‬The nature of the treatment‭ (‬e.g‭., ‬fumigation‭, ‬irradiation‭, ‬cold treatment‭, ‬hot water treatment‭, ‬etc‭.)‬

•‭ ‬Whether the treatment is the result of finding pests after inspection‭, ‬or is required automatically under standard procedures and without inspection

•‭ ‬The volume of perishable products to be treated‭.‬

The latter is the most significant inequity‭. ‬A single treatment in Florida ports typically involves a single trailer‭, ‬whereas a‭ ‬single‭ ‬“treatment”‭ ‬in northeast ports typically involves a warehouse load of multiple containers‭.

We believe treatment fee increases may be viewed negatively by countries that export fruit and vegetables to the United States, and could result in retaliatory customs duties and trade policies — all of which will be passed along to importers.

Until 2015‭, ‬when new APHIS fee regulations‭ (‬APHIS-2013-002‭) ‬went into effect‭, ‬USDA’s Agricultural Quarantine and Inspection Services‭ (‬AQI‭) ‬Treatment fees had remained the same for many years while the actual APHIS costs for monitoring the compliance of protocols and procedures for these treatments increased‭, ‬according the USDA‭. ‬Operating‭ ‬at a loss for these treatments‭, ‬the USDA implemented a rule change intended to bridge the gap by increasing the treatment fees‭ ‬incrementally from‭ $‬47‭ ‬to‭ $‬95‭ ‬in 2015‭, ‬to‭ $‬142‭ ‬on Dec‭. ‬28‭, ‬2017‭, ‬and to‭ $‬237‭ ‬in 2019‭. ‬Obviously‭, ‬a 202‭ ‬percent fee increase from‭ $‬47‭ ‬to‭ $‬142‭ ‬is exorbitant‭, ‬and an additional 67‭ ‬percent increase on top of that is cost prohibitive‭.‬

We believe the increased fee should be frozen until a better‭, ‬more equitable solution can be agreed upon between the USDA and the produce shipping industry‭.‬

In addition‭, ‬we believe treatment fee increases may be viewed negatively by countries that export fruit and vegetables to the United States‭, ‬and could result in retaliatory customs duties and trade policies‭ ‬‮—‬‭ ‬all of which will be passed along to importers‭.‬‭‬

This unbalanced discrepancy is especially alarming after ports in South Florida worked closely with the USDA to expand a cold treatment pilot program that allows new types of fruit to be imported from the Caribbean‭, ‬Central America and South America‭. ‬This‭ ‬was done in a spirit of cooperation that we believe needs to be rekindled to find a new solution to the current imbalance in the‭ ‬AQI fee structure‭.‬

We are concerned high fees will adversely impact port businesses and the jobs they support‭. ‬It is our hope that the fee increases included in the AQI rule will be frozen and reconsidered‭.‬


Steven M. Cernak, P.E., PPM, is the chief executive of Port Everglades, Fort Lauderdale, FL, and port director and chairman of the American Association of Port Authorities.

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