The US Department of Agriculture (USDA) has imposed sanctions this week on five produce businesses for failing to meet their contractual obligations to the sellers of produce they purchased and failing to pay reparation awards issued under the Perishable Agricultural Commodities Act (PACA). These sanctions include suspending the businesses’ PACA licenses and barring the principal operators of the businesses from engaging in PACA-licensed business or other activities without approval from USDA.
The following businesses and individuals are currently restricted from operating in the produce industry:
- Montecito Fresh Produce, operating out of Los Angeles, CA, for failing to pay a $22,320 award in favor of a California seller.
- Florida Cool Cargo, operating out of Miami, FL, for failing to pay a $43,066 award in favor of a Florida seller.
- Jusgo Duluth, operating out of Duluth, GA, for failing to pay a $135,785 award in favor of a California seller.
- Hunter Bros., operating out of Philadelphia, PA, for failing to pay a $21,061 award in favor of a California seller.
- Y Farms, operating out of Newport, RI, for failing to pay a $7,288 award in favor of a Florida seller.
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 actions are part of the USDA’s efforts to enforce PACA and ensure fair trading practices within the US produce industry. By issuing these penalties, USDA continues to enforce the prompt and full payment for produce while protecting the rights of sellers and buyers in the marketplace.
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 3,500 PACA claims involving more than $58 million. PACA staff also assisted more than 7,800 callers with issues valued at approximately $148 million.