When produce is being handled on a consignment basis, all cartons need to be accounted for, even the produce that will be dumped or donated. The shipper, when accounting back to a grower, must document that the produce was of no commercial value if there is to be no return.
Although the USDA, Agricultural Marketing Services, Specialty Crop Inspection Division have not issued USDA dump certificates for many years, the USDA will issue a statement under “remarks” on an inspection certificate when they personally witness the dumping of the produce. While I almost never see those types of inspections, it is still the buyer’s or consignee’s responsibility to furnish a USDA inspection establishing that the condition of the produce was excessive, along with evidence that the produce was either dumped or donated. If some of the produce is to be donated, there needs to be a USDA inspection performed to corroborate that the produce was sub-standard condition and not suitable for commercial sale. The donation slip should have the letterhead of the charitable organization who received the produce. The donation receipt must identify the commodity, date, label, number of cartons, and any other identification that might be on the cartons and signed by a representative of the charitable organization.
In the case of produce being dumped, the buyer must establish with a USDA inspection that the produce on the day of the inspection had no commercial value. As in the case of donated produce, documentation is important. It would be preferred to have the waste management company letterhead, location, or person receiving the produce to document the dumping. This is preferred, but may not always be practical. As with the donation slip, a dumping document must have all pertinent information listed; that preferred information should be date, number of cartons, label, type of commodity and any other relevant markings found on the carton. A white piece of paper without letterhead and with limited verbiage such as: “97 cartons of lettuce dumped” is of no value.
Without the correct information on the document the buyer may be required to remit the fair market price back to the shipper. The issue of what constitutes acceptable evidence of a donation or dumping is not always black and white, but as a general rule of thumb, the aforementioned suggestions should be utilized as a best practice when documenting any such situation.
If you have a question on this or any other topic or wish to offer a subject for a future blog, please contact me at TommyO@wga.com, and I will attempt to incorporate the topic into an upcoming blog.