(July 15) ALEXANDRIA, Va. — A cost-saving recommendation to reduce the number of the U.S. Department of Agriculture’s Perishable Agriculture Commodities Act field offices by 40% and consolidate other functions was approved July 14 by the Fruit and Vegetable Industry Advisory Committee.

The committee, meeting for the fifth time overall and the second time since new members were added by Agriculture Secretary Ann Veneman in December, also recommended that the USDA work aggressively to communicate with consumers that fruits and vegetable are a key to healthy living and fighting obesity.

Chaired by Karen Caplan, president of Frieda’s Inc., Los Alamitos, Calif., the committee also recommended that the USDA work to ensure that commodity grade standards are used appropriately and understood by consumers. The committee said that some consumers misunderstand the grade standard to be a food safety measure.

In addition, the committee urged the USDA to create incentives for fruit and vegetable purchases in federal feeding programs.

PACA PRESERVATION

But the top order of business was the committee’s work with PACA.

PACA officials came to the committee during its meeting Feb. 19 to seek industry input on ways the agency could become more efficient in the face of a big disparity between revenues and expenses.

The recommendation, which will be forwarded to Veneman, could result in savings of about $1 million a year. It urged the USDA to:

  • Consolidate licensing functions to one location.


  • Reduce the number of field offices from five to three.


  • Evaluate development of a national call center for PACA customer service.


  • Evaluate increasing the filing fee for complaints.


  • Evaluate increasing outreach to industry and providing more PACA resources on the Web.


  • Evaluate the inclusion of a processing fee for a single year PACA license renewal to encourage multiyear renewals.



“It is critical that PACA must be maintained as a resource for the produce industry on fair trade practices and dispute resolution,” said Tim York, president of Markon Cooperative Inc., Salinas, Calif., chairman of the committee’s working group on PACA.

“Industry services must not be reduced.”

NEED FOR SAVINGS

Opening the meeting on July 13, York reviewed a consulting firm’s analysis of PACA operations conducted in July 2003 and the working group’s conclusions.

The study found cutting the number of offices from five to three would save $680,000 per year. Consolidating the license functions to one location to save $356,000 per year.

The committee deferred to the USDA what field offices — now in Arizona, New Jersey, Virginia, Illinois and Texas — should be shuttered.

The impetus to look at how to streamline PACA stems from the fact it is running a deficit that will only accelerate in coming years.

PACA said that in fiscal 2003 it drew 29% of its near $10 million budget from a fast-shrinking reserve fund.