SM Oregon Dairy cows

An Oregon dairy barn. Dairies are among the businesses facing food safety fee hikes.

Farmers, processors and grocers are encouraging Oregon lawmakers to restore food safety funding with general tax revenues rather than sharply increase maximum fees on their industries.

In 2017, the Legislature shifted more of the responsibility for funding the state’s food safety inspection program to regulated businesses, such as dairies, egg handlers, bakers and grocery stores.

Their license fees now represent 75% of the program’s funding, up from 60% before the fee structure was changed. The balance comes from the state’s general fund, which comes from taxes on individuals and companies.

The state Department of Agriculture, which oversees food safety, is now asking lawmakers to “reverse the downward trend” in the program’s budget by hiking maximum license fees by 15% in mid-2022 and another 15% in mid-2023.

“This downward trend has occurred over time and has slowly eaten away at the reserves that were able to offset the shortfalls, which helped to alleviate any fee increases,” said Lauren Henderson, ODA’s assistant director, during a recent legislative hearing.

Due to the 2017 change in funding responsibilities, an additional $1.4 million in costs were shifted to licensed entities, which has since quickly depleted the program’s cash balance, he said. “It takes forever to get a savings built but it only takes your roof leaking to make it go away.”

The Oregon Farm Bureau, Oregon Dairy Farmers Association, Northwest Grocery Association and the processor group Food Northwest are now asking lawmakers to return to a more equal funding mix for the food safety program.

“We are placing more of the burden on the backs of our farmers and ranchers at a time they can’t afford it,” said Mary Anne Cooper, OFB’s vice president of public policy.

The agriculture industry is already struggling with the economic toll of the coronavirus pandemic while natural resource agencies are proposing fee hikes, she said. “This is one of the most significant we’ve seen across any program area.”

The ODFA wants lawmakers to allocate more general fund dollars to food safety rather than approve the fee increases proposed by farm regulators in Senate Bill 33.

“As crafted, we oppose the current bill but invite constructive conversations about the appropriate increases in fees coupled with sufficient general fund appropriations for the food safety program,” said Tami Kerr, ODFA’s executive director.

Food Northwest, which represents processors, said that ODA does an excellent job administering the food safety program and wants to see the agency well-funded but cannot support the proposal.

“I’m in an awkward position because I can’t ever remember testifying in opposition to an ODA budget request, but that’s where I’m at today,” said Craig Miller, the group’s government affairs director.

The shortfall in food safety funding was caused by the changed funding mix, which effectively caused money collected from fees to be shifted toward other purposes, he said. “Those general fund dollars should be refunded back into the program.”

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