USDA License Fees

The long-term solvency of the Perishable Agricultural Commodities Act program, which promotes fair trading practices in the marketing of perishable fruits and vegetables, is at risk. Although revenues are expected to cover program expenditures through fiscal year 1995, the Department of Agriculture (USDA) will later have to draw upon program reserves because the current legislative ceiling will prevent the program from collecting enough revenues to cover spiraling costs. Although these reserve will be sufficient to carry the program through fiscal year 1998, after that the reserves will be depleted and program solvency will be at risk. Some buyer and seller contributions to program revenues were often not proportionate to their use of program services. For example, during fiscal year 1993, buyers and sellers trading more than one ton of produce a day contributed about 42 percent of the program's revenues but required up to 85 percent of the program's services. Conversely, retailers covered by the act annually contributed about 34 percent of the revenues but required less than seven percent of program services.