USDA Restricts PACA Violators in California and Texas from Operating in the Produce Industry
- by Robert Schaulis
WASHINGTON, DC - As part of its efforts to ensure fair trading practices within the U.S. produce industry, the Department of Agriculture (USDA) has imposed sanctions on three 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. 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.
According to a press release, the following businesses and individuals are currently restricted from operating in the produce industry:
- Fresh Is Best Inc., operating out of Long Beach, Calif., for failing to pay a $17,638 award in favor of a California seller. As of the issuance date of the reparation order, Ever Melchor, Antonio Melchor and Reina Melchor were listed as the officers, directors and/or major stockholders of the business.
- Martinez Fresh Produce LLC, operating out of Dallas, Texas, for failing to pay a $17,767 award in favor of a Texas seller. As of the issuance date of the reparation order, Arturo Martinez Isguerra was listed as a member of the business.
- SAR Quality Avocados Corp., operating out of McAllen, Texas, for failing to pay a $102,783 award in favor of a New Jersey seller. As of the issuance date of the reparation order, Javier Sanchez Aguilar and Maria De Jesus Romero Sanchez were listed as the officers, directors and/or major stockholders of the business. Another principal of the business at the time of the order was Luis F. Mejia. He has challenged his responsibly connected status.
PACA provides an administrative forum to handle disputes involving produce transactions; this may result in USDA’s issuance of a reparation order that requires damages to be paid by those not meeting their contractual obligations in buying and selling fresh and frozen fruits and vegetables. 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 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 3,350 PACA claims involving more than $63 million. PACA staff also assisted more than 8,000 callers with issues valued at approximately $156 million. These are just two examples of how USDA continues to support the fruit and vegetable industry.