The produce industry has never taken for granted its rights under the Perishable Agricultural Commodities Act.
And it shouldn’t start now.
The U.S. Department of Agriculture has reopened the comment period for a proposed rule on trust protection and post-default payment agreements under PACA. Produce companies have the potential to be in the impossible situation of having to choose between preserving trust rights and working out payment terms between the parties.
The spirit of the PACA rule has been based in responsible business practices from buyers and sellers.
Companies should be allowed to set payment terms longer than 30 days and keep their trust rights.
USDA should be given credit for listening to the industry, particularly the Fruit and Vegetable Industry Advisory Committee, which brought up this issue a couple of years ago. USDA has shown in the past it values industry input and works to make things fair.
For instance, in the summer of 2007, USDA amended PACA rules to clarify that produce sellers invoicing electronically don’t give up their trust rights.
PACA is the kind of law that is a model for business trust protection, but it needs to be constantly addressed and occasionally revised when the produce business changes.
That also means paying for it, as annual license fees will nearly double in less than a month.
At least the industry can see the value in where its money goes.
If only all government fees and programs could be so clear.
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