The Meaning and Necessity of Produce Law and its Usefulness for Businesses

The international and interstate trade which is concerned with the business of fresh and frozen products is generally governed by PACA law. PACA law in its full form is known as Perishable Agricultural Commodities Act. This law is applicable for anybody who is related to the buying and selling or the business of fresh or frozen produces in the United States, or place between the US. This law is applicable for every person who is involved with dealings with merchant or consignee, receiver, buyer, or anyone what is related to this line of business. When we speak of fresh and frozen produce things like herbs and fresh roots, fruits and fresh vegetables are all counted in the category. This is a federal law, unlike other state law which usually deals with product trade. The set rules of the law are strict and anyone in this business has to adhere to the rules. A careful review is compulsory prior to all produce contracts getting signed under this particular law. 

It is the Produce law which provides the missing links when the dealers or the parties concerned in the business might not see eye to eye on several matters. For example, the terms and conditions dealing with the fresh or frozen produce can be already laid down but disagreements can arise when it comes to the delivery part. When there is such a situation this law supplies the automatic terms applicable in such cases which is universally acceptable and applicable to such transactions involving produce. The parties involved are immediately alerted as to the rules applicable even where the deal might be vague, and where there is not invoice or documents that can support the terms and conditions. Thus, when the situation of incongruity gets out of control between the two dealers the law acts as an argument solver to control the situation. Under the United States Code, section 499, the law is found in chapter 7, and adheres to the set rules of United States District law. There are certain parameters which one has to fulfill, to gain the license under the produce law. Not everyone is eligible for having it, or can fulfill the required parameters.

It is the USDA which issues this license and the same is provided to the US traders dealing with fresh or frozen produce. It is mandatory to possess the license if someone wants to be in legal business of produce trade which is related to the produce law. Be it an individual or an entity, It is applicable to all, within the Unites States. This law and the license, therefore, include all the producers, retailers, farmers and wholesalers, and even those farmers with separate sales companies. For any US based merchant as well, it is compulsory to have a PACA license who receives more than one ton of produce at wholesale in a particular day that was developed 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 a PACA license is absolutely mandatory to carry on their business. PACA is applicable to even cruise liners and they should also have the license in order to do business. Farmers who sell only their own produce and do not sell produce for others need not have this license though as the same time it is advisable to have this license as it provides the protection of the PACA trust. Therefore, it is sensible to have a PACA license and any person having the license can assert for protection.