The United States Department of Agriculture (USDA) announced today that it has indefinitely revoked, as of October 1, 2014, the preferential treatment status Canadian shippers have enjoyed under the Perishable Agricultural Commodities Act (PACA). The system, which allows Canadian exporters the same access to legal protections afforded to U.S. exporters, is a critical payment recovery tool for both U.S. and Canadian produce shippers who deal with highly perishable commodities. Without the preferred status, Canada is essentially treated the same as every other exporter who ships to the United States, an exceptionally big blow to the U.S.’s largest produce trading partner.
The move makes good on a threat previously issued by the USDA in which it announced that PACA protections might be revoked if Canada didn’t set up a comparable system for U.S. shippers, who are mostly small multi-generational family farmers. For decades, the U.S. government and the U.S. produce industry have pushed the Canadian government to implement, administer and enforce a priority status that would protect U.S. shippers selling to buyers in Canada, but to no avail, according to a letter issued by the USDA to the Canadian government. The letter also indicated that the preferential treatment status would be revisited should Canada take the necessary steps to introduce a comparable system.
Western Growers, Florida Fruit & Vegetable Association (FFVA), the Produce Marketing Association (PMA), United Fresh Produce Association, Florida Tomato Exchange, the Northwest Horticultural Council and the Texas International Produce Association (TIPA) and other industry trade groups have worked closely with the USDA for years on the issue, and have been frustrated at a lack of progress toward reciprocity. Western Growers and FFVA, with the support of the aforementioned groups, issued a joint press release in advance of the announcement expressing disappointment and frustration over the Canadian’s government’s failure to live up to a 2011 pledge under the Canada-U.S. Regulatory Cooperation Council (RCC) to implement a similar program.
Matt McInerney, executive vice president of Western Growers, emphasized the importance of a payment priority program for U.S. shippers. “Protections afforded under PACA may seem less than sexy and may appear insignificant – until you don’t get paid. Then they become one of the most valuable protections afforded to a family farmer.”
Today’s announcement has been reported by several different trade publications, including Agri-Pulse, AndKnowuKnow, Law360 as well Politico, a national political publication. Inside U.S. Trade, a top industry publication has also been in contact with our communications office and is planning a story.
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