(Feb. 26, 3:35 p.m.) WASHINGTON, D.C. — The U.S. Department of Agriculture’s Fruit and Vegetable Industry Advisory Committee passed resolutions to increase license fees for the Perishable Agricultural Commodities Act and to amend language to prevent courts from waiving PACA trust rights for postdefault agreements.
Scott Danner, head of the committee’s PACA working group, introduced the resolutions Feb. 24 after months of research and two recent conference calls with members.
Danner said the fee increase would increase the basic license fee to $995 and branch fees to $600, with a cap of $8,000. The board unanimously approved the increase, the first one since 1995. Current fees are $550 a year and $200 for each additional branch and an overall cap of $4,000.
By statute, however, the process to raise fees must wait until PACA’s reserves drop to one-quarter of its yearly operating expenses, which should implement the rate increase by 2011.
Danner also told the 20-member group of industry representatives and USDA officials that many sellers are getting “burned” when they inadvertently waive their rights to the PACA trust by entering into payment agreements with buyers who are more than 30 days in default.
“This is a major issue right now in our industry,” said Danner, the chief operating officer of Liberty Fruit Co., Kansas City, Kan.
Danner himself filed a complaint with PACA against a buyer who ignored a payment plan, but a court said in making a postdefault agreement that extends payment beyond 30 days he waived his right to the PACA trust.
“The courts are interpreting that that’s the way the law was written, and that’s not the way we feel,” Danner saidafter his presentation.
“It’s absolutely necessary,” said Chuck Ciruli, advisory board member and chairman of Ciruli Bros. LLC, Rio Rico, Ariz., about the amendment and fee hike. “PACA is for the benefit of all.”
Andy Hatch, designated federal official for the AMS, characterized the court interpretation as a relatively new problem for the industry caused in part by the economic downturn and some buyers’ inability to pay.
The USDA’s deputy administrator for fruit and vegetable programs, Bob Keeney, said now that the resolution has passed, it will begin a long regulatory process. After review and a 60-day public comment period and analysis, he projected the language could be added by 2011.
During the meeting, Fruit and Vegetable Industry Advisory Committee members also agreed to support:
- Industry efforts to establish a national marketing agreement for leafy greens;
- A fresh-cut pilot program for schools, asking Agriculture Secretary Tom Vilsack to take an active role in implementing the program;
- A national salad bar program in schools and provide incentives to do add the salad bars; and
- Funding for Department of Defense fresh produce purchases of up to $100 million.