(March 20) When it comes to trust protection and electronic data interchange, it seems the fresh produce industry is all for and none against.

With the comment period expiring March 16, the U.S. Department of Agriculture two days earlier had received more than 50 comments on the agency’s Jan. 30 advance notice of proposed rule making relating to Perishable Agricultural Commodities Act trust rights in electronic transactions.

The USDA had earlier published the advance notice of rule making in response to supplier concerns that trust language necessary to preserve PACA trust protection was being stripped out of electronic transactions processed by buyers.

Of the 64 comments listed on the USDA’s rule making Web site as of March 16, all appeared to be from suppliers or produce associations. No comments through March 14 were from retailers or retail associations.

Bill Greer, spokesman for the Washington, D.C.-based Food Marketing Institute, said the national retail organization was unaware of the rule making and wouldn’t be submitting comments to the USDA.

REASONABLE TECH ADVANCES

The United Fresh Fruit & Vegetable Association, Washington, D.C., had yet to submit comments about the notice of proposed rule making as of March 14.

Robert Guenther, vice president of public policy for the United, said the association strongly urges the USDA to reiterate that licensees should be able to “use reasonable technological advances while still receiving appropriate trust protection under the PACA.”

“Further technological advances should not deprive the industry of the benefits of a fully functioning trust, and neither should those who would seek to frustrate that trust,” Guenther said.

However, comments had been submitted by Irvine, Calif.-based Western Growers, the Newark, Del.-based Produce Marketing Association, the Fresno-based California Grape & Tree Fruit League and the Mission-based Texas Produce Association.

Western Growers suggested PACA regulations should be amended to allow invoices or other billing statements to preserve trust benefits.

Western Growers also suggested the licensee’s invoice or billing statement could be paper or electronic and contain the trust language that would be valid whether or not the debtor “downloads, receives or accepts such a statement.”

POTENTIAL FOR SAVINGS

In a statement submitted to USDA by Kathy Means, PMA vice president of government relations, the association asked the USDA to create an option for a blanket trust benefit preservation notice between produce sellers and buyers.

The association asked USDA to determine if trading partner agreements can be considered binding under the Perishable Agricultural Commodities Act and applicable to all electronic data interchange transactions sent between trading partners that sign the agreement.

Because most EDI transaction charges are based on the number of characters transmitted, including trust statements could more than double the cost per transaction, Means said.

On the other hand, if the trust language were handled by a TPA, she said transaction costs could be reduced substantially.

ProduceSupply.org LLC, a group of 16 suppliers of fruits and vegetables, also supported flexibility in providing trust language.

Alan Newton, chief operating officer of ProduceSupply.org, made this recommendation: “Add a provision that would allow a perishable product supplier to request that a purchaser of their product who receives invoices from the supplier electronically execute a trading partner agreement between the two parties to specifically preserve the suppliers PACA trust rights.”

Newton said that there should not have to be any periodic renewal clause in the trading partner agreement.