Some U.S. produce industry leaders are losing patience with the slow progress in Canada’s search for a Perishable Agricultural Commodities Act-equivalent system of risk protection for produce sellers.
“The U.S. side continues to be frustrated,” said Matt McInerney, executive vice president of Irvine, Calif.-based Western Growers.
Domestic and foreign sellers of produce in the U.S. have been able to use the U.S. Department of Agriculture’s PACA trust protection since the mid-1980s. PACA allows produce sellers to be the first in line in the event of a bankruptcy of a U.S. produce company. The U.S. and Canadian trade have long desired a comparable system of risk mitigation in Canada.
Although the issue was a priority in the Canada-U.S. Regulatory Cooperation Council’s (RCC) action plan of December 2011, there still has not been definite progress on the key provision of the stated “common goal of protecting Canadian and U.S. Fruit and vegetable suppliers from buyers that fault on their payment obligation.” President Barack Obama and Canadian Prime Minister Stephen Harper announced the creation of the RCC earlier in 2011 and said they wanted to reach its goals by March 2013.
The “big ticket item” of ensuring that the suppliers get paid is still outstanding in the RCC process, said Anne Fowlie, executive vice-president at Canadian Horticultural Council, Ottawa.
McInerney said a lot of work has been done with U.S. and Canadian stakeholders on the issue to try to instill the urgency of reaching a practical, effective and economic solution for the produce industry.
“Here is what I believe is our golden opportunity, and certainly over the last year it seems to be floundering from the U.S. point of view,” he said. If progress isn’t made on the issue, McInerney said some produce operators in the U.S. want to withdraw some of the PACA privileges that Canadian suppliers enjoy when dealing with U.S. buyers.
Spokesmen for both the U.S. Department of Agriculture and Agriculture Canada could not be reached for comment.
Canadian officials have discussed creating a unified system of dispute resolution, supported by government but with the industry providing the necessary tools for fair trading practices in the fruit and vegetable industry. That entity may be the Dispute Resolution Corporation, which now shares licensing responsibilities with the Canadian Food Inspection Agency.
When it comes to financial risk mitigation, however, Canadian officials have suggested that buyer or seller insurance may be part of the solution, an approach that U.S. industry leaders don’t believe will work.