August 2, 2016

Straight from Tommy O: Let the PACA Work for You

By: Tom Oliveri

In my opinion, shippers do not take advantage of the Perishable Agricultural Commodities Act (PACA) enough.

As Director of Trade Practices and Commodity Services for Western Growers, I am handling calls, day after day, from growers and shippers that are involved in some type of disagreement with the buyer of their products.  It might be an arrival problem where quality is in dispute, a slow pay situation or one involving a bankruptcy.  In any of these events, and many others, the Perishable Agricultural Commodities Act has defined regulations and a mountain of precedent to address almost any situation.

I realize that shippers are hesitant to use this Federal dispute resolution agency due to fear of losing a customer. However, there comes a time when enough is enough.  The PACA is there to help you solve the dispute, utilize them.  In today’s world, I understand you are going to have some customers that you would never think of utilizing the PACA on, I get it. However, on the other hand, there are others who can’t afford not to.

Almost all fresh produce transactions are covered under the PACA between licensees’s with the exception when the produce never enters the United States. For example, when a PACA licensee sells Chilean table grapes directly from Chile to a Pacific Rim Country, and the grapes never enter the United States, the PACA would have no jurisdiction.

Remember that almost all produce is shipped in the contemplation of interstate commerce. For example, if you ship from Salinas to Los Angeles, your buyer can ship the product out of state, therefore almost all transactions are covered by the PACA.  In fact, there is a 1996 PACA case involving jurisdiction; the PACA ruled that a seller merely has to show that the commodity in question is one that is regularly moved in interstate commerce, and that the buyer does ship a portion of produce as part of its business in interstate commerce, the agency can claim jurisdiction.

The PACA also operates a GOOD Delivery Hot Line (800-495-7222) where the agency’s experts on good delivery are a phone call away to assist you in determining if your product after arriving at destination meets contract specifications. The Hot Line hours are 5:00 A.M. PT to 4:30 P.M. PT.

Please allow me to reiterate, the issue is typically not with the PACA regulations themselves, but with the reluctance to use PACA by a high percentage of the fresh produce industry.  The PACA is here for your benefit, use it! 

For those readers that are members of Western Growers, the Trade Practices and Commodity Services Department can facilitate processing these types of activities on your behalf, helping handle many contract issues you might have with your customers. Please feel free to call 949-885-2268 or email to discuss and assist you with these issues.