The detailed description of PACA law, and its field of operation.

The PACA law is a federal law, whose full form is Perishable Agricultural Commodities Act, and it deals with frozen as well as fresh produce and their international and interstate trade. The law applies to everyone who is concerned with dealings with receiver, buyer, merchant or consignee related to the business of buying and selling of fresh or frozen produces like fruits and fresh vegetables, herbs and fresh roots in the United States, or place between the US. If you are in this business then you will have to adhere to the set rules of the law which is a direct subject of the federal law, unlike other product trade which falls under the state law usually. A careful review is necessary under this particular law, before all produce contracts are signed.

When it comes to the delivery part, it can be possible that the dealers or the parties involved in the business might not see eye to eye on certain matters, like the terms and conditions dealing with the fresh or frozen produce. To such kind of disagreements or rather, agreements, it is the PACA law which provides the missing links. The deal might be vague and there can be a situation where there is not invoice or documents that can support the terms and conditions. The automatic terms applicable in such cases are supplied by this law which is universally acceptable and applicable to such transactions involving produce, and therefore acts as a dispute solver when the situation of disagreement gets out of control between the two dealers.

 Under the United States Code, the law is found in chapter 7, section 499, and adheres to the set rules of United States District law. There are certain parameters which one has to fulfill to gain the PACA license and not everyone is eligible for having it. This license is issued by the USDA and is provided to the US traders dealing with fresh or frozen produce. It is mandatory to possess a PACA license if someone wants to be in legal business of produce trade, be it an individual or an entity, within the Unites States. Therefore, all the producers, retailers, wholesalers, and farmers with separate sales companies come under the purview of this law and the license. It is also mandatory for any US based merchant to have a PACA license, who receives more than one ton of produce at wholesale in a single day that was grown either in another state or in a foreign country. Any retailers who receive more than $230,000 in produce which was developed outside of their particular area or home state, during a year should also have a PACA license to carry on their business. The license is also a necessary must for cruise liners.

Those farmers who sell only their own produce and does not sell produce for others is not required to have a PACA license. But still it is advisable to have a PACA license as it provides the protection of the PACA trust, and anyone having the license can claim for protection. The situation is different for those framers who by and large grow produce in one unit, and sell it in another. A PACA license is a must for them under the set rules of the PACA law. Just about all kinds of produces are covered by the PACAA and the protections and rules of the law cover all dealings related to frozen and fresh and products. But there are some agricultural products like root crops, mushrooms, herbs, edible flowers which do not come under the purview of farming products but are still covered by the PACA law.