The meaning of the term P.A.C.A LAW and its application in business.

The Perishable Agricultural Commodities Act is a federal law, which basically deals with international and interstate deal in both, fresh as well as frozen produce. This law is applicable for the dealings that are made with one’s consignee, buyer or broker, receiver, if one is in the business of selling and buying of fresh and frozen fruits and vegetables, fresh roots and herbs in the foreign country, or betwee
US states. The trade of produce, unlike the trade of clothes and merchandize, is directly under the subject of federal law. The produced contracts that are placed under this law should go through a proper review before it is signed.

The P.A.C.A law is imposed by the PACA division, which is a part of the US Department of Agriculture or USDA. P.A.C.A also sets out rules and regulations which are connected in resolving disputes, contracting to buy or sell produce and collection of undisputed debts. One can easily find an informative website on the PACA, which provides all the necessary information regarding the PACA laws, rules and regulations, and all the contact details including the e-mail addresses both of DC and regional offices. Things like licensing, protection, and dispute declaration is also made clear in the website. Forms like the license forms, bond forms, guidelines on proper delivery, forms for filing reparation complaints, and a fifty page list of merchandise enclosed under PACA are all present there. The website also has a good article on the creation and development of Vegetable and Fruit Dispute Resolution Corporation, commonly known as DRC.

The companies who are involved in selling and buying must be licensed, which means companies which are involved in wholesale procedure of buying and selling of a huge produce , at a particular day should be properly licensed. When a produce is imported and exported and crosses the drawn line, then it can be clearly stated as “interstate” transit. In order to have an interstate transit, one should have a license as well. If a company is supposed to have a license under P.A.C.A law and is yet not a license holder, then a letter is send to them as an advice to get the license as soon as possible and even one is accountable to answer, why one has not got the license till date and why is it not necessary.

Few exceptions are always there like growers and retailers, who make a purchase less than $230,000 per annum, and independent agents who are frozen food brokers and their sell per year is less than $230,000 of produce, and the processors who make the purchase of the produce to circulate it only within the state. Restaurants are also considered under this purview. Only the potato processors are excluded. PACA license is not necessary for those farmers who do not put sale for others but sell only their own. But it is easier to meet the criteria for the protection that is provided by the PACA trust if they have a PACA license. Farmers who generally make a produce for someone and make a sell on behalf of the other, needs a P.A.C.A license as stated under the P.A.C.A law. PACA normally covers just about all kinds of produces. The products that come under this law are: mushrooms, herbs, root crops, edible flowers.