Unraveling user fees
by Bernard Shire
For years now when the U.S. Dept. of Agriculture presents its proposed budget to Congress, the agency has tried to force meat and poultry processing plants to help pay for the costs of their food-safety inspections by the U.S. government. This effort comes in the form of “user fees.” User fees would charge companies for inspection services that have always been funded by the federal government from money collected each year from taxpayers.
Industry has traditionally fought these fees. But in the past, government proposals to charge plants user fees were never taken too seriously by industry because the Federal Meat Inspection Act and Poultry Products Inspection Act say inspection is a matter of public health and benefits taxpayers and consumers of meat and poultry products. So, it should be paid by them and not processors. The only exceptions to this policy are overtime, holiday and voluntary inspection, which the government says should be financed by processors.
Until recently, USDA didn’t describe meat and poultry inspection as a public health issue or concern. But in going back to the institution of government meat inspection, it, and later poultry inspection, began due to concerns about the effect on public health if meat inspection hadn’t been started by the federal government.
There never seemed to be much support for user fees for meat and poultry inspection in Congress. Not that there aren’t USDA user fees already. The U.S. government levies many user fees for other purposes at present. There are “grading” fees in the meat other agricultural industries paid for by farmers and processors. But USDA levies user fees against the meat and poultry industry.
The agency estimates it will collect $131 million in user fees already existing during the coming year from inspection services not paid for by taxpayers, including overtime, holiday and voluntary inspection, which represents about 13 percent of the agency’s budget. Each year, user fees, as well as civil penalties against meat and poultry plants, have been proposed and Congress has rejected them.
A different mood
But this year, the mood in Congress is different. There is increasing concern in Congress about food safety, as a result of the political makeup of the House and Senate, as well as newspaper stories and television news programs critical of food safety in the meat industry and public concern about food safety. As a result, USDA is expanding efforts to enact user fees for meat and poultry inspection.
It has proposed two new fees. One is a “performance-based” user fee, which would be charged to plants having sample failures or requiring additional government inspection, due to a pattern USDA calls “regulatory noncompliance.” The second is a flat fee to be paid by establishments applying for inspection services and annual renewal activities. This fee would cover “increased costs” above the basic inspection services provided to meat, poultry or processed egg establishments.
The amount of the second fee would be based on a plant’s size. If approved, USDA expects to collect about $12 million from both fees. The “performance-based” user fee is extremely vague, stating only it would apply to plants “showing a pattern of regulatory noncompliance.” But what does that mean? What is “a pattern of regulatory noncompliance?” And who decides whether a plant is showing such a “pattern?” How many NRs would a plant have to receive? Or would this “pattern” be based on something else?
USDA says the fee would cover “increased costs.” What would the costs have to be for a plant to be assessed a fee? Concerning the second fee, why should a plant have to pay a fee to apply for inspection or to renew its inspection? These costs are activities coming under normal inspection, which as a public effort, benefits all American consumers of meat and poultry products.
Both fees pose threats to large and small meat and poultry processing plants. Because of the large number of small plants in the U.S. compared to the number of large plants, these plants may require more inspection services than larger ones. As a result of these fees, small plants would be forced unjustly to pay for these services. Likewise, the large numbers of small plants submit more applications than big ones, and would have to pay the fees for these applications.
With government spending large sums of money to end the U.S. economic crisis, one of the last places it should give up spending taxpayer money is the bona fide effort to protect the public from food-safety problems.
There are two important issues here. One is the responsibility of USDA to use taxpayer dollars to protect public health by conducting meat and poultry inspection. The other is operating the inspection system in a way protecting private meat and poultry businesses from harassment by government bureaucracy.