PACA (Perishable Agricultural Commodities Act)

Last Updated: Jun 7, 2019

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Designed to promote fair trading practices in the marketing of fresh and frozen fruits and vegetables sold through interstate and foreign commerce. The Perishable Agricultural Commodities Act (PACA) prohibits unfair and fraudulent practices and provides ways to enforcing contracts. PACA requires anyone buying or selling commercial quantities of fruit and vegetables and some products made from these perishable items to be licensed and to behave with a code of conduct that is enforceable. Secured lenders must be fully away of PACA when evaluating a new or existing loan (see link to article below). Payables due to vendors that fall under PACA will prime the secured lender and should be reserved for on the borrowing base.

PACA Article - Bernstein Burkley