By Randy Gordon, President and CEO
The U.S. Department of Agriculture’s Agricultural Marketing Service (AMS) announced that effective Oct. 1, it will impose an approximately 10 percent increase in fees charged to grain, cotton, rice, peanut and other warehouses operating under the U.S. Warehouse Act (USWA).
AMS maintains that the fee increase is needed to cover expenses associated with the voluntary federal warehouse program, “including the maintenance of a sufficient operating reserve,” and called the increase a “remedial action to correct the budgetary shortfall for administration of the program.” However, for the last several months, the NGFA has confronted and continues to challenge USDA for its inability to adequately explain or account for a dissipation of funds from the USWA reserve that apparently occurred because of inadequate controls and oversight by the Farm Service Agency of its Finance and Budget Office during the Obama administration before the USWA program was transferred to AMS as part of Secretary of Agriculture Sonny Perdue’s 2017 USDA-wide reorganization. NGFA does have much more confidence in the transparency, budget accountability and management oversight now being exercised over the federal warehouse program by current AMS management. Nonetheless, NGFA will be working with other stakeholders and USDA to seek improvements to the U.S. Warehouse Act to erect additional protections, transparency and accountability provisions to protect users of the federal warehouse program going forward.
In a statement issued by AMS to accompany its notice, it said that the user fee increase “is projected to result in stable user fees through the next several fiscal years. AMS is committed to continuing cost reduction efforts in order to maintain the lowest possible rates while recovering expenses through user fees.”
The voluntary U.S. Warehouse Act, enacted in 1916, serves an indispensable role in providing licensing and other services for warehouses storing and marketing agricultural products, thereby protecting depositors and providing a consistent set of standards for companies operating in multiple states. The USWA also provides licensing and other services to warehouses in states that do not have their own warehouse licensing programs.
The most recent increase in USWA annual operating fees for warehouse operators was 5 percent that became effective Jan. 1, 2006, while the most recent increase in USWA licensing and inspection fees became effective Oct. 1, 1998. The Federal Register notice containing the new schedule of USWA fees is available by clicking here.