Canada’s preferred status for the United States Perishable Agricultural Commodities Act (PACA) has been revoked, which could amount to millions of dollars lost by Canadian growers and shippers.
PACA gave Canadian farmers and produce distributors the right to file claims against U.S. buyers who left bills unpaid for imported goods, including root vegetables, greenhouse produce, apples and cherries. Buyers would have to follow the rules or face losing their license.
While previously, farmers only needed to pay a $100 fee for filing a claim, now they must post double the value of the debt in order to proceed through mediation and claiming what is owed to them.
Without the threat of having their license revoked, Ron Lemaire, president of the Canadian Produce Marketing Association, predicts U.S. buyers will allow losses to total tens of millions of dollars.
According to Lemaire, the decision was made because Canada had been discussing giving U.S. buyers the same protection in its trade agreement for decades without coming to a resolution, and the U.S. eventually lost patience. The Alliance hopes to employ a similar plan in Canada soon to persuade the U.S. to reverse its decision.
