Service Area Strategic Plan
4/24/2014   9:32 am
Department of Agriculture & Consumer Services (301)
Biennium:
Service Area 1 of 1
Grading and Certification of Virginia Products (301 532 01)
Description

This activity provides a grading system that identifies product quality and condition, which is essential for effective and efficient marketing to occur. This program uniformly applies grade standards and specifications of quality that are accepted, understood and utilized by both buyers and sellers worldwide. The agency operates under agreements with the United States Department of Agriculture to provide commodity grading, inspection and official certification services; Good Agricultural Practices (GAP) Auditing and Country of Origin retail surveillance. In addition, this activity is responsible for the administration and enforcement of the Virginia Controlled Atmosphere Storage Law for apples and the Virginia Seed Potato Law.

The major service is inspection and official certification of product quality, according to USDA or Virginia grade standards, of fresh fruits, vegetables, peanuts, processed fruits and vegetables, grain, poultry, eggs, livestock, and other miscellaneous commodities for producers, shippers, processors, buyers, marketers, and other financially interested parties who request and pay for the service when needed. Other services include providing the official documentation required for export and official documentation required in settling claims or in legal proceedings.

Along with buyers and sellers who request grading services, all Virginia agriculture stands to benefit from the agency offering these services because industry constantly assesses the added value of graded versus non-graded products. Prices of non-graded products benefit from market value established by graded products. Commodity industries that support and request these voluntary services are aware of the importance of and the need to continue the services as a basis for fair and equitable payments. Trust in the agency's grading allows buyers to make bids through electronic auctions or otherwise buy without the necessity to travel to see the commodity. This attracts more buyers for more competitive bidding. Grading provides an incentive to produce higher quality products.
Background Information
Mission Alignment and Authority
  • Describe how this service supports the agency mission
    This service area directly aligns with VDACS’ mission to promote economic growth and development of Virginia agriculture by enhancing the profitability of Virginia food, agricultural and forest products enterprises.
  • Describe the Statutory Authority of this Service
    Mandates in the Code of Virginia:
    Sale of Farm Produce, In General, §§3.2-4700 through 3.2-4708; Virginia Seed Potato Inspection Law and Seed Potato Board, §§3.2-4100 through 3.2-4111; Controlled Atmosphere Storage of Apples and Peaches, §§3.2-4600 through 3.2-4617; Apple Grading, Packing and Marking, §§3.2-4500 through 3.2-4506.

    The following statutes in the Code of Virginia authorize this Agency to establish and promulgate grades and other marketing requirements to promote, protect and develop the agricultural interests of the Commonwealth;
    Certification of Agricultural Products in General, §§3.2-3400A through 3.2-3402; Grades, Marks and Brands Generally, General Provisions, §§3.2-4300 through 3.2-4311.

    The following federal statutes and agreements authorize VDACS to offer grading and inspection programs using USDA grades. This arrangement makes these services more widely available to growers, shippers, receivers, distributors, and processors in Virginia than would otherwise be possible without the cooperation of this state agency.
    Agricultural Marketing Act, 7USC 1621; Agricultural Cooperative Agreements with USDA: Fruit & Vegetable - 12-25-A-15, Poultry & Egg - 12-25-A-3317, Livestock Grading - 12-25-A-2132, Processed Foods – 12-25-A-2087, Grain Delegation - 7-USC-71, Grain Designation of Authority – FGIS-942, Laboratory Testing Services – 12-25-A-3248, Country of Origin Labeling - 12-25-A-5091.
Customers
Agency Customer Group Customer Customers served annually Potential annual customers
Export Shipping Agents Export Shipping Agents 10 10
Food Manufacturers, Warehouses & Processing Plants Fruit Packers 100 100
Grain Dealers, Handlers and Grain/Soybean Export Facility Grain Dealers 115 115
Grain Dealers, Handlers and Grain/Soybean Export Facility Grain Handlers 140 140
Grain Dealers, Handlers and Grain/Soybean Export Facility Grain/Soybean Export Facility 1 1
Livestock producers, dealers, markets Livestock Auction Markets 27 27
Peanut Processing, Storage & Buying Stations Peanut Blanchers and Storages 9 9
Peanut Processing, Storage & Buying Stations Peanut Buying Stations 30 30
Peanut Processing, Storage & Buying Stations Peanut Mills (Houses) 4 4
Potato & Vegetable Packinghouses Potato & Vegetable Packinghouses 17 17
Food Manufacturers, Warehouses & Processing Plants Poultry Plants 6 8
Food Manufacturers, Warehouses & Processing Plants Produce Warehouses 39 39
Food Manufacturers, Warehouses & Processing Plants Shell Egg Plants 1 3
Virginia farmers Virginia farmers 25,000 47,383

Anticipated Changes To Agency Customer Base
Demand for grading service, while current levels are being maintained, will continue to fluctuate depending on many factors:

-Companies choosing to market products without a quality shield/official grade
-Number of producers and processors
-Volume of products
-Disease and weather factors
-Producer or processor unable to afford grading services

Without increased General Fund support, commodity grading programs will find it necessary to continue to augment fees to meet rising costs.

Producers view increasing grading fees as inhibiting the competitiveness of Virginia producers and making them non-competitive with producers in states that supplement grading fees with state funds.

A reduction in the use of grading services by small producers could be realized due to their inability to afford fees charged for services.
Partners
Partner Description
USDA United States Department of Agriculture
Products and Services
  • Factors Impacting the Products and/or Services:
    None.
  • Anticipated Changes to the Products and/or Services
    Despite decline in the total number of farms in Virginia, the Commodity Grading Programs need to continue to develop Certification Services that are more customized to meet the specific product needs of producers, food manufacturers, the food service industry, and food retailers, with the consumer demanding new and a wider variety of grade and quality certifications.

    Some of the new programs already on the horizon included certification for the following:
    •Good Agriculture Practices (GAP) - continued expansion
    •Country of origin labeling (COOL) - continued expansion
    •Identity Preservation/Verification Program
    •Food Security
    •Humane handling

    These new services will result in growing demand from both large and small producers as grocery chains and eventually consumers will demand these certifications before they purchase.

    In grain, a new trend of shipping grain and soybean products in ocean-going containers, which Virginia has a great excess supply of, has begun revolutionizing grain shipments and has created an extensive new challenge for supplying services to this key sector of Virginia’s agricultural economy.
  • Listing of Products and/or Services
    • Inspection and official certification of product quality, according to USDA or Virginia grade standards, of the following: fresh fruits, vegetables, peanuts, processed fruits and vegetables, grain, poultry, eggs, livestock, and other miscellaneous commodities.
Finance
  • Financial Overview
    [Nothing entered]
  • Financial Breakdown
    FY 2011    FY 2012
      General Fund     Nongeneral Fund        General Fund     Nongeneral Fund  
    Base Budget $337,215 $5,385,980    $337,215 $5,385,980
    Change To Base -$29,761 $0    -$29,761 $0
               
    Service Area Total   $307,454  $5,385,980     $307,454  $5,385,980 
Human Resources
  • Human Resources Overview
    [Nothing entered]
  • Human Resource Levels
    Effective Date      
    Total Authorized Position level 0    
    Vacant Positions 0    
    Current Employment Level 0.0    
    Non-Classified (Filled)    
    Full-Time Classified (Filled)    breakout of Current Employment Level
    Part-Time Classified (Filled)    
    Faculty (Filled)    
    Wage    
    Contract Employees    
    Total Human Resource Level 0.0   = Current Employment Level + Wage and Contract Employees
  • Factors Impacting HR
    [Nothing entered]
  • Anticipated HR Changes
    [Nothing entered]
Service Area Objectives
 
  • Increase the value of Virginia agricultural and forestry products marketed with assistance and collaboration from VDACS (Division of Marketing).
    Objective Description
    Effective marketing programs will maintain and expand current markets for Virginia food, agricultural and forestry products. By monitoring a consistent measure of the annual value of food, agricultural and forestry products; this value should increase due to expanded volume or enhanced increased value of Virginia products.
    Alignment to Agency Goals
    • Agency Goal: Enhance opportunities for the growth, profitability and continued viability of the Virginia agriculture industry.
      Comment: By maintaining and enhancing the profitability of Virginia food, agricultural and forest products producers, this will contribute to a solid and growing agricultural economy in Virginia. This aligns with the long term objective to be a national leader in the preservation and enhancement of our economy.
    Objective Strategies
    • Meet clients’ requests for services by maintaining management and certified technical staff in five comprehensive commodity inspection programs through June 30, 2012. (Poultry and Egg, Grain, Fruit and Vegetable, Peanut and Livestock).
    • For each graded commodity, conduct an annual review of current fee structures to analyze both the fiscal health of commodity grading programs as well as the impact of current fees on the competitiveness of the graded commodities.
    • Provide GAP/GHP (Good Agricultural Practices/Good Handling Practices) information and training, relating to the USDA audit matrix, to Virginia’s fruit and vegetable industry through June 30, 2012.
    • Provide continued education to producers, 4-H, and FFA members regarding USDA quality grades and their relationship to market and industry trends and demands through June 30, 2012.
    • Annually assist in the development of exhibit material and participate in industry trade shows, conferences and field days through June 30, 2012.
    Link to State Strategy
    • nothing linked
    Objective Measures
    • Economic value of products inspected, graded and certified by the Virginia Department of Agriculture and Consumer Services.
      Measure Class:
      Other
      Measure Type:
      Outcome
      Measure Frequency:
      Annual
      Preferred Trend:
      Up
      Measure Baseline Value:
      2.09
      Date:
      6/30/2009

      Measure Baseline Description: Five year rolling average is currently $2.09 Billion.

      Measure Target Value:
      2.17
      Date:
      6/30/2012

      Measure Target Description: Two percent increase each year from the five year average.

      Data Source and Calculation: Commodity Service inspection reports


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