United States Department of Agriculture

Agricultural Marketing Service

Federal Grain Inspection Service

Administrative Directive 5130.2 June 5, 1985

Distribution: FGIS, OSP, Industry Originating Office: FMD - PPMAB

The U.S. Department of Agriculture (USDA) prohibits discrimination in its programs on the basis of race, color, 

national origin, sex, religion, age, disability, political beliefs, and marital or familial status. (Not all prohibited 

bases apply to all programs.) Persons with disabilities who require alternate means for communication of program 

information (Braille, large print, audiotape, etc.) should contact USDA’s TARGET Center at (202) 720-2600 (voice and 

TDD).

To file a complaint, write to the USDA, Office of Civil Rights, Room 326-W, 1400 Independence Avenue, SW, 

Washington, DC 20250-9410, or call (202) 720-5964 (voice and TDD). USDA is an equal employment opportunity 

employer.

DISPOSAL OF EXCESS AGRICULTURAL COMMODITIES

Contents

DISPOSAL OF EXCESS AGRICULTURAL COMMODITIES ������������������������������������������������1

1. PURPOSE �������������������������������������������������������������������������������������������������������������������������

2. REPLACEMENT HIGHLIGHTS �����������������������������������������������������������������������������������������

3. AUTHORITY �����������������������������������������������������������������������������������������������������������������

4. DEFINITIONS �����������������������������������������������������������������������������������������������������������������

5. POLICY �������������������������������������������������������������������������������������������������������������������������

6.OWNERSHIP �����������������������������������������������������������������������������������������������������������������

7.DELEGATION OF AUTHORITY �����������������������������������������������������������������������������������������

8.DISPOSAL OF PERISHABLE COMMODITIES �����������������������������������������������������������������

9.DISPOSAL OF NONPERISHABLE COMMODITIES ��������������������������������������������������������

10.DISPOSAL OF COMMODITIES NOT OWNED �����������������������������������������������������������������

11.QUESTIONS �����������������������������������������������������������������������������������������������������������������

Attachment 1 �������������������������������������������������������������������������������������������������������������������������8
FGIS Directive 5130.2 June 5, 1985

Page 2

1. PURPOSE

This Directive:

a. Sets forth policy on the disposal of excess agricultural commodities, and prescribes

methods of disposing of such commodities

b. Does not apply to commodities acquired for commodity distribution programs or to

commodities acquired by exchange for research

2. REPLACEMENT HIGHLIGHTS

This Directive replaces AMS Instruction 265-1, Rev. 1 (9/28/77

3. AUTHORITY

Agricultural Federal Property Management Regulations 104-43.315, 104-44 and 104-4

4. DEFINITIONS

a. Agricultural commodity is a product resulting from the cultivation of the soil or

husbandry on farms. As used in this Directive

(1) Perishable commodities are processed flour, cornmeal, packaged grains, 

edible oils, etc

(2) Nonperishable commodities are grain, rice, dried beans, corn, soybeans, 

flaxseed, etc.

(3) Other products are those furnished to or obtained by FGIS for grading, 

classification, inspecting, testing, developing standards, research, or 

experimentation

b. Excess is any commodity under the control of FGIS which is not required for its

needs

c. Public body is any State, United States territory, any political subdivision thereof,

the District of Columbia, any agency or instrumentality of the foregoing, or any 

agency of the Federal Government

5. POLICY

a. No employee will appropriate or permit another employee to appropriate for

personal use any agricultural commodity belonging to the Government or under the 

custody or supervision of the Government. This applies whether or not such item

has been ordered to be destroyed or abandoned. If any agricultural commodity is

appropriated by an employee for personal use, the supervisor must take immediate 

action to recover the commodity or its value
FGIS Directive 5130.2 June 5, 1985

Page 3

b. If any question regarding the disposition of an agricultural commodity arises from

the public or other sources, the Accountable Property Officer (APO) must make 

and retain memorandum notes of the circumstances. If such circumstances

warrant, they must be reported

c. In disposing of perishable agricultural commodities by sale, care shall be taken to 

guard against preference being given to any employee(s) over other prospective 

purchasers

6. OWNERSHIP

a. Excess agricultural commodities resulting from cooperative activities shall be

considered FGIS property unless the cooperative agreement specifically provides 

otherwise, in which case the terms of the cooperative agreement must govern

b. Excess agricultural commodities which remain after FGIS has completed the

grading, classification, inspection, testing, development of standards, research, or 

experimentation on the commodity furnished to FGIS for such purpose, shall be 

considered FGIS property unless:

(1) There is a specific agreement for return of the commodity to the party from 

whom it was obtained; or

(2) Ownership of the commodity is otherwise established by written agreement

7. DELEGATION OF AUTHORITY

Authority to dispose of excess agricultural commodities either by sale or other methods, 

as outlined in this Directive, is delegated to the incumbents (or those acting for them) in 

the positions listed below. This delegation of authority cannot be redelegate

a. Director, Field Management Division, Washington, D

b. Field Office Managers and Officers in Charge in the field offices.

c. Laboratory Manager, Beltsville, Marylan
FGIS Directive 5130.2 June 5, 1985

Page 4

8. DISPOSAL OF PERISHABLE COMMODITIES

A determination has been made that it is not practicable or economical to attempt 

to transfer excess perishable agricultural commodities, of the type covered by this 

Directive, to other agencies of the Department or to other Federal agencies. Items in

questionable condition shall not be disposed of in a manner that could result in human 

consumption. Excess perish- able commodities may be disposed of as indicated below

and a record maintained

a. Donation to Major Disaster Relief. The commodity may be donated to supplemen

food supplies in declared major disas ter areas (Executive Order No.12148, dated

January 20, 1979). Field offices having such excess commodities in locations 

determined by the President to be major disaster areas should contact the local 

civil defense office for instructions.

b. Sales. Commodities which are in salable condition, and in sufficient quantities that

fair value may be reasonably expected and warrant the administrative cost 

involved, may be sold at the best price obtainable. Food sales to the public shall be

confined to items in good consumable condition and properly labeled. All sales are 

to be on a “where is and as is” basis, with no warranty expressed or implied

(1) Solicitation of offers. The seller is responsible for obtaining reasonable 

competition consistent with the items and conditions involved in the sale

Generally, offers should be obtained from two or more sources within the 

usual trade area in which the items are located to ensure a fair sale price

However, where the qual)tity is so small that solicitation of private persons is 

not justified, solicitation may be confined to office employees if such will result 

in a fair sale price. It is preferable, of course, that an outside offer be obtained 

if practicable. Excessive solicitation in relation to anticipated sales proceeds

or possible spoilage of perishable items should be avoided. Offers may be 

solicited orally, either by personal contact or by telephone

(2) Sales to Employees. Excess perishable agricultural commodities may be sold

to employees when:

(a) The sale is at the best price obtainable, and

(b) The quantity involved does not exceed the needs of the employees’ 

immediate households

(3) Release of Commodity. Commodities sold by negotiated sale shall not be

released to purchasers until full and proper payment of the purchase price is 

made
FGIS Directive 5130.2 June 5, 1985

Page 5

(4) Records of Sales. Upon completion of a sale, the APO shall complete Form

AD-107, Report of Transfer or Other Disposition or Construction of Property.

Attachment 1 explains how to prepare the form. Forward a copy of the AD107 to

USDA, APHIS, FSO

Accounting and Property Services

Butler Square, West

100 North Sixth Street

Minneapolis, MN 55403

(5) Proceeds of Sale. Payment for any excess agricultural commodities sold

shall be in the form of cash, money order, or certified or cashier’s check. 

If cash is received, it shall be converted to a money order. Payments shall

be forwarded within 24 hours, if practicable, b.1t in every case within 1

week after receipt. Payment shall be made payable to U.S. Department 

of Agriculture and transmitted with Form AD-107 (original); and Form AD847, Fees and Charges Listing Sheet (refer to FGIS Billings and Collections 

Handbook, Chapter 2, Section 2, Paragraph A.) Send payment to:

National Finance Center

P.O. Box 609

New Orleans, LA 70160

c. Donatio

(1) Commodities that cannot be donated to major disaster relief areas or sold 

may be donated to public bodies, including public welfare institutions. The

APO shall obtain a receipt for such donation

(2) If it is impracticable to donate to public bodies, commodities (which cannot 

be disposed of otherwise as set forth in this Directive) may be donated to 

private welfare institutions in lieu of destruction. Memorandum notes shall

be made of donations. Persons who receive commodities shall pay all costs

incident to the donation

d. Destruction. Perishable commodities, which at the time of becoming excess ar

unfit for use, or which spoil before sale or donation can be made, shall be 

destroyed
FGIS Directive 5130.2 June 5, 1985

Page 6

9. DISPOSAL OF NONPERISHABLE COMMODITIES

Excess nonperishable commodities may be disposed of as indicated below and a record 

maintained:

a. Donation to Major Disaster Relief. The commodity may be donated to State an

local governments to provide assistance in alleviating suffering resulting from 

major disasters

b. Donation for Educational or Public Health Purposes. The commodity may b

donated for educational or public health purposes when a need for such has been 

made known by the Department of Health and Human Services.

c. Sales. The commodity may be sold under the procedures outlined for perishabl

See Section VIII.B. for solicitation of offers, records, and submission of proceeds. 

Exception: No purchase shall be made by a Department employee

d. Donatio

(1) The commodity may be donated to public bodies or public welfare institutions 

in the same manner as perishables (see Section 8 C. above

(2) If the commodity cannot be sold or donated as indicated above, it may be 

donated to private welfare institutions in lieu of destruction. Memorandum

notes shall be made of donations

e. Destruction. Nonperishable commodities shall be destroyed if they are unfit for use

at the time of becoming excess

10. DISPOSAL OF COMMODITIES NOT OWNED

a. Return to Party From Whom Obtaine

(1) If the commodity was furnished to FGIS under an agreement which provides 

for its return to the furnishing party when BY FGIS needs of FGIS have been 

served, the APO shall:

(a) Arrange with the furnishing party immediately upon availability of the 

commodity for its removal

(b) Upon return of the commodity, obtain and file a receipt showing the type 

and quantity involved, and cite the agreement

(2) Destroy the commodity if it spoils before removal, inform the furnishing party, 

and record the circumstances in the files.
FGIS Directive 5130.2 June 5, 1985

Page 7

b. Disposal by FGI

(1) If the agreement provides for the commodity to be disposed of by FGIS in a 

manner other than by return to the party from whom obtained, disposal shall 

be made in accordance with the terms of the agreement, provided that:

(a) No perishable commodity is to be sold to any employee except at 

the best price obtainable, and in a quantity not to exceed the needs of 

the immediate household

(b) No nonperishable commodity is to be sold to a Department employee

(2) Commodities unfit for human use or otherwise unusable shall be destroyed.

11. QUESTIONS 

Direct any questions concerning this directive to the Policies, Procedures, and Market 

Analysis Branch at (202) 720-0228

Attachment
FGIS Directive 5130.2 June 5, 1985

Page 8

Attachment 1