U.S. and Canadian produce industry organizations are united in their support of an equivalent of PACA Trust protections in Canada, and they intend to make their collective voice heard.
On Feb. 22, the North American Trade Committee called for the Canadian government to establish financial risk mitigation provisions similar to those enjoyed by U.S. shippers within the U.S. and to Canadian exporters to the U.S. under the Perishable Agricultural Commodities Act.
The committee consists of industry leaders including the Produce Marketing Association, United Fresh Produce Association, Western Growers, the Canadian Produce Marketing Association and the Dispute Resolution Corp.
Efforts to establish PACA-like protections in Canada have been going on for years, said Matt McInerney, executive vice president of Western Growers and the trade committee’s co-chairman.
But never before, he said, have the U.S. and Canadian produce industries been so united in their call for action.
“I am very optimistic” about the chances for Canadian government action on the issue, McInerney said. “This is the culmination of years of effort working with Canadian government officials.”
Danny Dempster, CPMA’s president, also is optimistic, and hopes that the government will act within the next two years.
“The Canadian industry has indicated a strong desire for provisions akin to those provided under the PACA trust as far back as the mid-80s,” Dempster said. “It is all part of enhancing fair and ethical trading practices in the Canadian marketplace.”
Stephen Whitney, the DRC’s president and chief executive officer, said a solution is long overdue.
“Our friends in the U.S. are losing patience, and I can’t blame them,” he said.
In his 35 years in the industry, McInerney estimates U.S. exporters have lost $100 million to unscrupulous trading partners in Canada, the No. 1 U.S. export market for fresh produce.
Canadian shippers who ship within Canada are just as helpless. According to one study, Whitney said, Canadian fresh produce companies are 10 times more likely to file for bankruptcy than companies in agricultural sectors protected by risk-mitigation provisions.
One difficulty in getting PACA-like legislation passed in Canada has been the balance of power between the federal and provincial governments in Canada, which does not have an equivalent in American federalism, Whitney said.
But another cause for guarded optimism is the recent creation of a joint Canadian government/produce industry committee to investigate the issue, he said. The committee’s report is expected in June.
A previous government-only committee concluded that there was no need for PACA-style protections in Canada. The produce industry rejected that committee’s findings, Whitney said.
It’s a shipper’s responsibility to find buyers that are financially trustworthy, said Roger Pepperl, marketing director for Wenatchee, Wash.-based Stemilt Growers.
That said, PACA-like regulations in Canada would definitely be a boon for Stemilt and other exporters to the country, Pepperl said.
“Good business decisions are always the best practice, but protections will only help in giving a backstop to good business decisions,” he said.