Canada needs its own PACA

02/25/2011 10:27:46 AM
The Packer Editorial Board

Read a produce industry obituary, and you’ll see the most revered traits of those we’ve lost are a person’s “honesty,” “integrity” and “fairness.”

It’s true — the produce industry prides itself in honest business dealings.

No government handouts. Competitors work side by side, even supplying each other with product and talent, when necessary. Deals are still done sometimes with the trust of one’s word.

One principle in the industry that preserves this fairness is the U.S. Department of Agriculture’s Perishable Agricultural Commodities Act.

Dealing in perishable product takes mutual trust between buyers and sellers, and PACA keeps traders from being victimized when a partner suffers financial trouble.

Unfortunately, PACA is unique to the U.S. produce trade.

But the North American Trade Committee is pressuring the Canadian government to establish a financial risk mitigation system similar to PACA.

One committee member estimates U.S. exporters have lost $100 million in the past three decades to dishonest trading partners in Canada, the No. 1 U.S. export market for fresh produce.

Canadian firms themselves are victimized by bad trades with no PACA-like system. That is, unless they ship product to the U.S., where they are protected under PACA.

A Canadian government committee that previously looked at the issue determined there was no need for such a system there.

The North American Trade Committee, which includes the Ottawa-based Dispute Resolution Corp., says otherwise.

We agree.

Did The Packer get it right? Leave a comment and tell us your opinion.



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