USA moves to full cost recovery for agricultural quarantine inspections
13 July 2014
The United States Department of Agriculture Animal and Plant Health Inspection Service (APHIS) has announced changes to the fees it charges for conducting agricultural quarantine inspections at US ports of entry for the first time in a decade. The change is designed to make inspection services self-financing, with costs being “borne by those using the services”. To date, “the revenue from fees charged has been insufficient to cover all costs.” APHIS is currently proposing to “adjust the hourly rates charged when APHIS employees perform work associated with agricultural quarantine inspections… so APHIS can recover the true cost of providing the services”.
Fees for inspections of commercial aircraft will increase “from $70.75 to $225 [and for] commercial maritime cargo vessels from $496 to $825”, rises of 218% and 66% respectively.
Concerns have been expressed that the US measures will fall particularly heavily on exporters of small-scale consignments. A produce customs brokerage company argued that there would be effects on imports, as “eventually prices are going to get passed down to the ultimate consumer, which could reduce demand.”
Editorial comment
Moves towards recovery of full costs for the provision of SPS inspection services in the US mirror similar moves in the UK. The US fee increases potentially carries important implications for Caribbean ACP exporters.
Concerns have been expressed that moves to full cost recovery for SPS inspection services in OECD countries are falling disproportionately on imported products. Often internal SPS inspections are carried out at no direct cost to domestic producers. This could potentially serve as a form of market protection for domestic producers by increasing the costs of placing imported products for sale on the domestic market (although it can be argued that domestic producers indirectly meet these costs through their domestic tax contributions).
Of particular concern is the observation that fee increases could fall particularly heavily on small-scale consignments. This highlights the importance of supporting the “bulking up” of export consignments by promoting increased collaboration between exporting companies. This may need to be taken on board in the design of national export promotion programmes.
For this to be facilitated, however, there will be a need for common standards for export-oriented production of the affected commodities so that the exports of products from one company are not undermined by being added to products of an inferior quality from a neighbouring company.
There would appear to be some scope for government-supported initiatives in this area to assist national exporters in taking steps to minimise the impact of inspection fee increase in OECD markets.
