FR 2024-31144

The document from the Agricultural Marketing Service (AMS) of the United States Department of Agriculture (USDA) in the Federal Register outlines a significant change in the fee structure for Section 8e import inspections of fresh fruits, vegetables, and other products. It shifts the fee basis from per-carlot to per-pound and introduces reduced fees for additional sublots. This final rule aims to more accurately reflect inspection costs and lessen the financial burden on importers, particularly those dealing with smaller shipments.

General Summary

The AMS has revised the fee structure for the inspection of certain imported agricultural products. The new regulation calculates fees on a per-pound basis instead of a per-carlot basis, aligning costs more closely with the actual volume of goods inspected. This change is expected to result in fees that are equal to or lower than current ones for the majority of inspections. By reducing additional sublot fees by half, the rule seeks to ensure that smaller shipments are not disproportionately disadvantaged. The new fee structure will take effect on January 29, 2025, and is part of broader efforts to align fees with the cost of services under the Agricultural Marketing Agreement Act of 1937.

Significant Issues or Concerns

One of the notable concerns with the document is the lack of a detailed breakdown of the costs involved in implementing the new per-pound fee structure. Without clear figures, it is challenging to assess the efficiency or potential wasteful spending of this new fee model. Additionally, while 40,000 pounds is used as the baseline for full carlot calculations, there is limited justification for why this specific weight is chosen over others.

The language used to describe the fee calculations, particularly for lots less than a carlot, is somewhat complex. Simplifying this explanation could enhance understanding for stakeholders who may not be familiar with regulatory jargon.

Impact on the Public

For the general public, the changes aim to maintain or potentially lower the cost of importing fresh produce. This could, in turn, influence retail prices and availabilities. However, the adjustments in fees might lead to slight price fluctuations, depending on the size and frequency of imports.

Impact on Specific Stakeholders

Small importers stand to benefit from the new fee structure since it aims to reduce the financial burden on smaller shipments, helping to level the economic playing field. Larger importers might incur higher costs due to the volume-based fee approach, yet their savings on reduced sublot fees could mitigate these increases.

Various commodity stakeholders, such as those dealing in avocados, grapes, and tomatoes, will likely see positive or neutral financial impacts under this new rule. However, some commodities, like onions, which often involve additional sublots, may face increased fees unless sublot fee reductions fully offset this.

The transparency of the rule could be improved by offering more case studies or examples highlighting the impact on different importer profiles, whether small, medium, or large. Overall, the new fee structure appears to be a progressive step toward a more equitable fee system but requires clearer presentation and more foundational support to fully understand its long-term implications.

The document presents new regulations governing the inspection and certification of fresh produce imports, specifically addressing changes in the fee structure for Section 8e import inspections. The financial implications of these changes focus on the transition from a per-carlot basis to a per-pound basis for calculating fees. This revision aims to better align the fees with the volume of goods inspected, thereby more accurately reflecting the cost of inspection services.

In this adjustment, the per-pound rate is exemplified by dividing the current inspection fee for a full carlot by the average weight of a full carlot, which is set at 40,000 pounds. This means the current inspection fee of $254 for a full carlot equates to a per-pound rate of $0.00635. This simplification seeks to ensure that fees are consistent irrespective of the actual volume of produce, which could result in more equitable charges aligning with the amount of produce inspected. Furthermore, the cost for each additional sublot is reduced by 50%, from $116 to $58. The document highlights that the fee for a standard 40,000-pound lot remains unchanged at $254.

Although the regulatory change is intended to match fees more closely with service costs, some issues arise. The use of 40,000 pounds as the standard weight lacks detailed justification, which raises questions about whether this figure accurately reflects typical import scenarios. This standard may impact financial accuracy for lots deviating significantly from this weight, particularly concerning smaller businesses whose operations may not scale similarly.

To elaborate on small business effects, the document claims smaller importers will not face disproportionate burdens due to fees being proportional to lot size. However, without specific case studies or examples, it's challenging to fully understand the fee impact on these smaller entities. A simplified explanation of the methodology used in the fee calculations and its implications for businesses of varying sizes could improve clarity and demonstrate fairness.

The financial references also suggest a minimum fee equivalent to a 2-hour charge at $123 per hour, amounting to $246, for lots weighing less than 40,000 pounds. This provision ensures a baseline cost that likely covers fixed costs associated with inspections regardless of the inspected volume. However, the reasoning behind choosing a 2-hour minimum is not thoroughly explained, which could lead to concerns about the possibility of inefficient spending in scenarios where the actual service may consume less time.

In summary, while the new per-pound fee structure provides a framework aimed at aligning inspection fees more closely with the actual volume of imports, certain areas, such as the rationale for the 40,000-pound standard and the depth of impact analysis on different-sized businesses, warrant further elaboration. A clearer, simpler explanation of how fees were calculated, along with case examples, could enhance understanding and acceptance among stakeholders, especially for smaller importers who could face varying impacts from these fee changes.