WASHINGTON, Oct. 2, 2014 -- Several major produce industry groups are expressing disappointment over the Canadian government’s failure to establish a system that would protect U.S. suppliers of fresh produce to Canada if a buyer fails to pay for a shipment.
Under USDA’s Perishable Agricultural Commodities Act (PACA) program, Canadian companies shipping produce to the U.S. have enjoyed preferential status for decades that gives them the same financial protections as U.S. suppliers. However, the Canadian government has failed to live up to a 2011 pledge under the Canada-U.S. Regulatory Cooperation Council (RCC) to implement a similar program to protect U.S. companies that export to Canada. As a result, the industry groups said, USDA recently warned that Canada’s special status is likely to be revoked.
The U.S. produce groups -- Western Growers, Florida Fruit & Vegetable Association (FFVA), the Produce Marketing Association (PMA), United Fresh Produce Association, Florida Tomato Exchange, the Northwest Horticultural Council and the Texas International Produce Association (TIPA) – say they have worked closely with the USDA for years on the issue, but their leaders are frustrated at a lack of progress toward reciprocity.
“The inability of the Canadian government to resolve such a longstanding issue – one it committed to resolving – is a missed opportunity and extremely discouraging to U.S. exporters,” said Mike Stuart, FFVA president. “We need leadership from Canada to find a path forward to a solution. Producers in both countries depend on it.”
Matt McInerney, executive vice president of Western Growers, emphasized the importance of a payment priority program for U.S. shippers. “Protections afforded under PACA may seem less than sexy and may appear insignificant – until you don’t get paid. Then they become one of the most valuable protections afforded to a family farmer.”
PACA, established in 1984, has afforded protection to U.S. producers in circumstances such as refusal to pay, insolvency and bankruptcy. The self-help tool has provided farmers and suppliers the ability to get paid for product delivered.
The RCC was established in 2011 to boost trade in North America by better aligning the two country’s regulatory systems. Since then, the RCC has identified 29 regulatory barriers to trade, including the need for Canada to initiate a payment protection program similar to PACA. Canada’s failure to act has created a rift between the U.S. and one its best global trading partners.
The RCC is scheduled to meet Oct. 8 in Washington, D.C., to announce the continuation of the trade resolution process for many industry sectors. It has said it won’t consider a produce payment protection program at the meeting.
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