What You Need to Know About The Perishable Agricultural Commodities Act (“PACA”)
November 4, 2016
The Perishable Agricultural Commodities Act (“PACA”), 7 U.S.C. §§ 499a-499t, was enacted in 1930 to regulate the marketing of perishable agricultural commodities in interstate and foreign commerce. The PACA is administered and regulated by the Agricultural Marketing Service, an agency within the USDA.
PACA, established a federally mandated licensing system for the produce industry and sought to promote fair trade in the marketing and selling of perishable agricultural commodities. A party found to have committed unfair trade practices may face a civil penalty, license suspension, or, in the most serious cases, license revocation.
A “perishable agricultural commodity” is any fresh fruit or vegetable, whether or not frozen or packed in ice, including cherries in brine, as defined by the USDA Secretary. 7 U.S.C. § 499a(b)(4). The PACA regulations include within the definition of fresh fruits and vegetables “all produce in fresh form generally considered as perishable fruits and vegetables, whether or not packed in ice or held in common or cold storage, . . . [except] those perishable fruits and vegetables which have been manufactured into articles of food of a different kind or character.” 7 C.F.R. § 46.2(u).
In order to comply with PACA, sellers must ship the quantity and quality of produce specified and buyers must accept shipments that meet contract specifications and pay promptly after acceptance. Prompt payment means payment within 10 days unless the buyer and seller, prior to the sale, agree in writing to extend the payment time. The following are some of the common PACA violations that prompt the USDA to take a disciplinary action: 1) Failure to pay for shipments of produce purchased; 2) Slow payment; 3) Failure to render accurate accountings and pay promptly the net proceeds due for produce handled for or on behalf of shippers or growers; 4) Flagrant misbranding or misrepresentation of produce shipped in interstate or foreign commerce; 5) Making false or misleading statements for a fraudulent purpose, including altering or otherwise falsifying official USDA inspection certificates; 6) Refusing to produce for examination by an agent of the USDA records in connection with a complaint alleging a violation of the PACA; and employing a restricted person after receiving notice from the USDA that such employment is prohibited.
If you have a question about the PACA or if you are involved in a dispute, an investigation, or an enforcement proceeding, contact Davidson Law Group, P.A. today!