PACA

The Perishable Agricultural Commodities Act (PACA) is a fair trade statute governing fresh and frozen fruits and vegetables. Any entity handling wholesale quantities of these products, including food processors and distributors of finished goods containing perishables, is required to be licensed by the U.S. Department of Agriculture, Agricultural Marketing Service, PACA Division. In addition, the Act establishes a statutory trust in favor of unpaid creditors in transactions involving perishables. This statutory trust takes PACA trust assets out of a bankrupt party’s estate. The Act’s trade rules, disciplinary proceedings, and the statutory trust can be of substantial concern to investors in PACA-regulated companies. OFW regularly advises on the regulatory and business risks associated with ownership and operation of PACA entities. Our attorneys also represent individuals and entities in PACA disciplinary proceedings to avoid sanctions that can include debarment from the perishables trade. We also advise stakeholders on developments in PACA regulation and policy, and were deeply involved in the negotiations leading to the last major amendments to the Act.