The budget crunch in New York state could change the way shipping point fruit and vegetable inspections are done there.

As part of a plan to trim $1.8 billion from the state budget deficit in 2010-11, the $79 billion executive budget from New York Gov. David Paterson seeks to end the farm products grading service from New York’s Department of Agriculture.

“Farm products wholesalers would work directly with existing private entities to grade products for quality and potential price, rather than use State resources,” the budget summary from the governor’s office said.

Apple industry leader Jim Allen opposes the plan.

The governor’s budget document said the state now provides the service for a nominal fee, which the document said is now inadequate to support department expenses.

Eliminating the grading service would save $426,000 in 2010-11 and $1.3 million in 2011-12, according to the document.

The budget process will continue for several months, as the state senate and assembly will also create their versions of the financial plan, said Allen, president of the Fishers-based New York Apple Association.

“Typically, it is supposed to be done by April 1, but we have had years where it has gone to the end of June or July,” Allen said.

Allen said the apple industry will fight to keep the state inspection service.

 â€œThe state puts teeth in the enforcement and regulatory control,” he said. “When you privatize something, I don’t know how or who would enforce (regulations).”

Allen said an impartial third party government inspector helps to determine the quality of both fresh and processed fruits and vegetables.

He also said the state inspectors are necessary for export certifications and approval for federal feeding programs.

“Without that inspection, we can’t participate,” he said.

Jimmie Turner, spokesman for the U.S. Department of Agriculture’s Agricultural Marketing Service, said the USDA may have to consult with New York lawmakers about the proposal at some point.

“Until then, we have no comment on the matter.”

Destination or terminal market inspections are entirely managed by the USDA and funded through industry user fees. Those won’t be affected by New York budget cuts, Allen said.

Other cuts in agriculture

The executive budget proposes eliminating grape genomics lab funding, which the document said would save $2.5 million in 2010-11 and $5 million in 2011-12. The lab has not been built yet and the governor’s office said other public and private labs could do the work originally envisioned for a New York grape genomics lab.

The governor’s budget also proposes cutting aid for groups that provide educational, scientific, promotional and marketing support, including all funding for the New York State Apple Growers and the Farm Viability Institute. The budget said that move will save $7 million annually over the next two years.

The budget proposes to raise the state tax on cigarettes from $2.75 to $3.75 per pack.

In a move that has attracted critics and supporters, the New York governor also proposed an excise tax of $7.68 per gallon for beverage syrups or simple syrups, and $1.28 per gallon for bottled soft drinks, powders or base product. That “soda tax” would add one cent per ounce to the cost of soft drinks. The budget would permit grocery stores to pay a franchise fee to sell wine, which the governor’s office said will generate $92 million.