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Weighing the cost
While the Senate wrestled over judicial nominees and talk of the filibuster--business went on as usual for agriculture in Washington. This week both the House and Senate Agriculture Committees held hearings to address the reauthorization of the U.S. grain standards system. One of a handful of ag bills up for review and approval this year, the U.S. Grain Standards Act will likely draw some controversy regarding proposals to minimize cost and retain efficiency and consumer confidence.
For decades, the Federal Grain Inspection Service (FGIS) has used the authority under this legislation to ensure uniform federal marketing standards for grain and provide inspection procedures for moving grain both in the United States and abroad. These services are provided directly by FGIS or an FGIS-delegated state inspection agency. The integrity of the system is critical in maintaining the quality and safety of U.S. grains shipped abroad.
The national grain organizations have identified unnecessary burdens associated with paying the fees associated with FGIS administered inspection. As such, they have folded together a proposal to allow for contracting of inspection services at export sites. Basically, this would allow a third-party to contract for the inspection currently provided by FGIS staff.
This should be no surprise as the government has evolved throughout the last decade to allow for greater flexibility and an increase in contract labor instead of a more traditional bureaucratic workforce. And in periods of deficit reduction and tight budgets, cost reduction seems to play well with the minds behind the calculators at the White House budget shop, the Office of Management and Budget (OMB). Advocates of third-party inspection expect a significant reduction in cost and greater competitiveness in international markets like Brazil.
But, this proposal is not without objection. Like any agriculture policy, regional difference and bulk shape the debate regarding a third party inspector. Cost varies from port to port depending upon the volume and the efficiency of the services provided at each port. For example, the fees to ship out of New Orleans are cheaper than shipping out of Portland.
Last year, the U.S. Department of Agriculture conducted a study to evaluate the feasibility of a third-party inspections. Their analyses indicate that such a system is a viable option, particularly in light of the recent advancements in weighing and inspection technology. However, the application of such a change and the day-to-day administration of the switch could encounter some increase in cost. With many FGIS employees close to retirement and the anticipated down-size in federal employees at inspection sites associated with third-party contracting, FGIS has raised some concerns with their ability to execute a cost-efficient transition.
In short, the standards and need for oversight in grain exports are not the issues in question. Rather, the administration and oversight of such will draw the focus of lawmakers this year.
Date: 5/25/05
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