(Dec. 11) Using a stair-step approach that seeks to avoid sticker shock, the U.S. Department of Agriculture is moving ahead with rule-making to raise terminal market inspection fees.

A summary of the rule, published Dec. 1, would increase by about 15% each year certain fees charged for the inspection of fresh fruits and vegetables at destination markets for fiscal years 2007 and 2008.

Todd Michael, a member of the USDA’s fruit and vegetable advisory committee and vice president of Michael Farms Inc., Urbana, Ohio, said the pending increase was presented at a meeting of the committee earlier this year.

The need for the fee increase was outlined to the committee on June 27 by Leanne Skelton, chief of the standardization section of the Fresh Products Branch of the USDA’s Agricultural Marketing Service Fruit and Vegetable Programs Fresh Products Branch.

Noting that the USDA was facing an increased cost of doing business, Michael said most committee members felt that the USDA should take progressive annual increases rather than a sudden spike in user fees.

The USDA is requesting comments on the rule by Jan. 2, 2007.

The USDA said the proposed fee increases are needed to cover the costs of providing current operations and services and improving the work environment for inspectors.

The USDA said there are more than 2,000 users of its Fresh Products Branch destination market grading services. While the inspection service is largely voluntary, some receivers must have imports inspected to meet marketing order requirements.

Mandatory inspections only account for about 2.5% of the total number performed, the agency said.

The rule specified that the 2006 fiscal year revenue projection for the Fresh Products Branch’s destination market inspections was $15.3 million, but costs are projected at $20.4 million. The fast-shrinking reserve balance is projected at $12.7 million.

That reserve balance exists because of funds appropriated by Congress in October 2001 for infrastructure, workplace and technological improvements.