User-Fee Financing of USDA Meat and Poultry Inspection

Abstract

USDA's Food Safety and Inspection Service (FSIS) finances about 13.5 percent of its budget outlays through user fees for overtime and unscheduled meat and poultry inspections. User fees play an increasingly important role in financing government programs, and FSIS has frequently requested expanded authority to charge user fees for more of its operations. Congress has consistently rejected the FSIS requests and has placed important restrictions on fees and the uses of fee revenue at those agencies that have been granted more extensive user fee authority. This report surveys the application of user-fees for financing meat and poultry inspection programs in other countries; reviews user-fee systems in other Federal agencies, particularly those with food and agricultural missions or regulatory responsibilities; and discusses the relevant economics literature on the use and design of user fees. Finally, we suggest several elements that should underlie the structure of user fees for meat and poultry inspection, should such a program be introduced. e