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Grain Program In Jeopardy Farmers, Grain Elevators Wary About Closing Inspection Sites

Sat., March 1, 1997

FOR THE RECORD: 3-4-97 A surplus in export grain inspection fees, not taxpayer money, covered the $100,000 shortfall last year at the Spokane grain inspection office. The state grain inspection program is not supported by taxpayers, as reported Saturday in a business story.

The possible closure of Eastern Washington state grain inspection offices has raised concerns that private grain elevator companies may be ill-equipped to conduct accurate inspections. That could cost millions of dollars in overpayments or underpayments to farmers.

Officials with the Portland-based Pacific Northwest Feed and Grain Association, which represents hundreds of grain elevators and exporters, have proposed a study to compare inland grain inspections with those taken by federal inspectors at coastal export sites.

The study, which will be discussed at a March 4 meeting in Spokane, would come at a time when the Washington Department of Agriculture is considering reorganizing or closing its four inland grain inspection offices, in Spokane, Colfax, Clarkston and Pasco. Those offices employ a total of about a dozen people.

Inspection fees charged to grain elevators or farmers do not cover the cost of operating the Spokane office, which annually analyzes up to 25,000 samples of wheat, peas and lentils. Taxpayers pick up the difference, contributing a $100,000 per year subsidy as the public’s part in keeping commodity markets honest.

Should the office be closed, dozens of Eastern Washington elevator companies would be forced to grade their own grain for weight and quality to determine it’s worth.

“Elevator operators who have summer employees assessing the grain and deciding what bin to put it in might not be properly trained or equipped to make such a decision,” said Jonathan Schlueter, executive director of the grain and feed association.

The association suggests a study similar to one last year in Oklahoma. In that study, economists found that grain elevators conducting their own inspections paid farmers too much for poor-quality wheat and too little for the best grain.

Private elevator operators on average paid 9 cents per bushel too much for grain that later was downgraded by the receiving flour mills and exporters, the study said. A discrepancy of that magnitude in the Pacific Northwest could cost grain elevators $25 million a year in lost revenue.

In-house grain inspections are widespread in Idaho, Montana and Oregon, but few Washington companies grade their own grain.

That could change if the state closes its inspection offices. State officials fear that such action would eliminate an unbiased source of determining how much a farmer’s crop is worth. That could trigger a return to the days when farmers drove from elevator to elevator until they got the price they wanted.

“The Spokane office is a safety net for farmers,” said Robert Gore, assistant director for the state’s commodity inspection division. “An unofficial inspection provides little recourse to farmers or elevators, whereas an official inspection can be appealed four times.”

Spokane officials charge $7.50 per inspection, a higher price than private, unregulated inspections, officials said.

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