PCA began operating the Industry Stewardship Program (ISP) for Pesticides, Solvents and Fertilizers (PSF) on April 1, 2016. The development of a budget and resulting fee rate for a new program is always challenging, and it is not unusual for fee increases or decreases to occur within the early years of a program. PCA has reviewed the financial performance of the first few months of the fertilizer program and a larger than anticipated deficit has been incurred. The key challenges which have led to the operating deficit and the need to substantially increase the fee rate for at least a temporary period include:
- Pronounced seasonality of sales
- April 2016 “fee-free month”
- Need to recover from current deficit and build a reserve
- Operational cost uncertainties
- Market changes
- Variation in cost-share sampling factors
The PCA Board of Directors has reviewed the information available and has approved a fee increase from $0.07 to $0.22 per kg or L. In the circumstances, it is necessary to introduce the new fee rate as of December 1, 2016 which is less than the usual 90 days’ notice, so that it takes effect before the spring 2017 sales season.
The financial performance of the program will remain under constant review, and if the program recovers sufficiently, it may be possible to decrease fee rates at a later date. PCA very much appreciates the understanding of the stewards during this challenging period.
For additional information, please feel free to contact Patrick Chauvet by email at patrick@productcare.org or by phone at 1.877.592.2972 ext. 356
Sincerely,
Product Care Association