Earlier this year, the Trump administration in its FY 2021 budget request called for additional user fees to replace the appropriated portion of the FGIS budget, approximately $20 million annually, on top of the existing official inspection and weighing fees already paid for by the industry. Users of these official services already pay for the direct costs incurred by FGIS in providing them, plus administrative overhead for these services, which typically comprises 70% of FGIS’ total annual budget.
The only portion of FGIS’s budget not funded by user fees is its standardization activities, such as developing the U.S. grain standards and monitoring activities to ensure that grading is done consistently across different market regions. Assessing additional user fees to finance these non-inspection-related functions of FGIS would increase business costs and likely be passed back to farmers in the form of reduced farmgate prices for their commodities, given the highly competitive global market in which U.S. agriculture operates. FGIS should not be financed through additional user fees.
In addition, the FY 20 budget agreement retains the $55 million cap on user fees for official grain inspection and weighing services that NGFA supports.
Reprinted from Grain Journal July/August 2020 Issue