Sep 25, 2018

USDA restricts produce buyers for violating PACA

The USDA has imposed sanctions on three produce businesses for failing to pay reparation awards issued under the Perishable Agricultural Commodities Act (PACA).

The following businesses and individuals are currently restricted from operating in the produce industry:

• Global Produce Trade, operating out of Signal Hill, Calif., for failing to pay a $43,350 award in favor of a North Carolina seller. As of the issuance date of the reparation order, Paulina Romero Marin, Letitia Romero Marin and Sergio Ledesma Ramirez were listed as the officers, directors and/or major stockholders of the business.
• Classic Produce, operating out of Bronx, N.Y., for failing to pay a $114,400 award in favor of a Texas seller. As of the issuance date of the reparation order, Vianney Capellan was listed as the officer, director and major stockholder of the business.
• Border Produce Services, operating out of McAllen, Texas, for failing to pay a $7,892.00 award in favor of a Texas seller. As of the issuance date of the reparation order, Arturo J. Garcia was listed as a member of the business.

PACA provides an administrative forum to handle disputes involving produce transactions; this may result in a reparation order being issued that requires damages to be paid by those not meeting their contractual obligations in buying and selling fresh and frozen fruits and vegetables. USDA is required to suspend the license or impose sanctions on an unlicensed business that fails to pay PACA reparations awarded against it as well as impose restrictions against those principals determined to be responsibly connected to the business when the order is issued. Those individuals, including sole proprietors, partners, members, managers, officers, directors or major stockholders may not be employed by or affiliated with any PACA licensee without USDA approval.

The PACA Division, which is in the Fair Trade Practices Program in the Agricultural Marketing Service, regulates fair trading practices of produce businesses that are operating subject to PACA, including buyers, sellers, commission merchants, dealers and brokers within the fruit and vegetable industry.

In the past three years, USDA resolved approximately 3,400 PACA claims involving more than $58 million. PACA staff also assisted more than 8,500 callers with issues valued at approximately $151 million. These are just two examples of how USDA continues to support the fruit and vegetable industry.