Ensuring Food Safety in a Pandemic

These are not easy times for the food and packaging Industry. The entire farm-to-fork production and delivery chain has been put under tremendous stress with major virus induced disruptions. For food manufacturers, the implementation of social distance rules have brought in a collateral damage to business prospects as this has severely handicapped the entire workforce. Regular inspections by FDA and USDA have been put on hold. This unprecedented situation has presented a unique opportunity for businesses – this is the time to go for fully automated production and remote monitoring mechanism with minimal human intervention. An establishment of a proper mechanism in consultation with food lawyers will ensure a strict adherence with the PACA law and other food safety laws.

While there is yet no evidence that COVID – 19 can be transmitted through food packaging; there are always chances of the virus staying alive on a surface for a few hours after coming into contact with an infected individual. In the meanwhile, food supply operations have been classified as essential services. This basically means continued operations in the face of severe challenges with adequate protective mechanism. 

The Way Forward 

It is imperative for food safety teams to continue operations in manufacturing units while looking at possible ways at minimizing virus exposure and health impact on staff. Food safety guidelines have been recently published and it stresses mainly handwashing, employee hygiene, following SOPs and GMPs, avoiding contamination and following well established food safety management practices and programs. The bottom-line is to ensure proper hygiene in accordance with the food safety laws across the entire chain which is expected to keep the virus at bay. Installation of adequate working mechanism in consultation with food safety lawyers will go a long way in this fight against the pandemic.

What is PACA Act?

Bodner Law PLLC has been providing legal aid to producers and distributors of fresh fruits and vegetables throughout United States. This domain of business is covered by the Perishible Agricultural Commodities Act, otherwise known as PACA Law which applies to all dealings with a receiver, consignee, broker or buyer. Given the high level of contribution of the agricultural sector to the overall US economy, this food law overlooks the protection of rights and interests of all involved in compliance with

state and federal food laws.

Since this industry deals with perishable commodities and often vague invoices without all terms and conditions mentioned, the Produce law fills in for all the un-mentioned points and provides automatic terms to produce transactions. These terms apply even when the two involved parties have not explicitly agreed to these terms. 

The produce law has been framed by keeping in mind the interest of the monetary institutions who lend loan to the agricultural producers. For any traders in USA who are involved in buying, selling or dealing with fresh or frozen agricultural products must be aware of the ethics of PACA law to avoid litigations.

The scope of work under PACA law involves everything on legal advice and guidance involving day-to-day transactions along with solving legal disputes arising out of unique unforeseen scenarios in the food industry. Food Safety Lawyers provide legal assistance pertaining to adulteration and misbranding of food products and work for protecting the food rights of common US citizens. They also assist the corporate agricultural establishments in obtaining administrative and governmental approval for projects involving perishable agricultural commodities. Representing a vital part of federal legal system, these competent lawyers execute their responsibilities by catering valuable advice to the clients on the rules and regulations of PACA law and its impact on various aspects of commercial transaction.

Experienced attorneys from the legal firm represents manufacturers, distributors and retailers in the food, beverage and related industries in a wide variety of matters including Vendor Agreements, Food Safety Compliance, PACA litigation, Vendor disputes and Federal Food Security Act Litigation.

The PACA Trust And How It Works

The Perishable Agricultural Commodities Act or PACA was passed in the year 1930 by Congress to establish fair trade and business practices in the vegetable and fruit industry. All agricultural produce exporters must be familiar with these government regulations. PACA is managed by the U.S. Department of Agriculture or USDA.

Important facts about PACA are mentioned below:

How to get a PACA License

Companies that buy or sell more than one ton of produce on a daily basis must get licensed by PACA. Companies which buy or sell produce which crosses the U.S. state lines also need to be licensed which can be obtained through the U.S. Department of Agriculture or USDA. PACA license fee is $995 for a year and $600 for the other branch locations across the United States. Companies which operate without a PACA license could pay a penalty upto $1200. Having a PACA license protects your PACA trust rights even if the buyer goes out of the business.

Protection under PACA

The PACA trust was developed as a means for sellers and suppliers to obtain payment on undisputed amounts which are owed for product sales.  Provisions under PACA require produce sellers to maintain a statutory trust on vegetables and fruits received but not yet paid for. In case the buyer's company or business becomes bankrupt, the trust will ensure that the produce vendors are compensated before other creditors if they file claims for confidence.

PACA licensed sellers must have the following wordings on their billing documents as well as invoices.

The perishable agricultural commodities listed on this invoice are sold subject to the statutory trust authorized by section 5(c) of the Perishable Agricultural Commodities Act, 1930 (7 U.S.C. 499e(c)). The seller of these commodities retains a trust claim over these commodities, all inventories of food or other products derived from these commodities, and any receivables or proceeds from the sale of these commodities until full payment is received.

Produce sellers who don't have these wordings in their bills are required to send a written notice to all buyers within 30 days of payment due date ensuring the buyer that the vendor wishes to preserve the trust benefits of PACA.

Reparation and Dispute Resolution Cases

In case a PACA licensed company fails to pay for produce, USDA can suspend the license of that company. PACA licensed companies can file for reparation cases through PACA. This case can take six months and the reparation case requires $100 filing fee. A formal proceeding begins involving the seller and the buyer if the case is not resolved informally.

PACA Laws Followed by Trading Merchants, Can Perform the Task of Business in the Correct Way

PACA is actually a designed federal law, and the full form of the same is Perishable Agricultural Commodities Act, and such kind of laws generally deals with frozen as well as fresh kind of produce and the trade of the same in both interstate and in international countries. The law is actually designed for the ones who are concerned with buyer, merchant, receiver, and also buying and selling of frozen as well as fresh products that generally includes vegetables and fruits, fresh roots and herbs in the state of USA or within the state of USA. If a person is willing to pursue such kind of business, then one should adhere to the terms and conditions that are laid by the PACA law. A proper and careful review of the terms and conditions is properly needed, before one agrees and the document is clearly signed.

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When there is involvement of delivery section, then it is generally the involvement of both the parties, like the buyer and the seller should be very aware of the fact and the laws that are related to the laws that are stated in the section. The law takes care of the related issues to that of rules and regulations that are related to the dealing section. At certain times a deal can prove to be indeed vague and at such times it is the duty of the rules and rules to take care of the happenings and dealings so that none of the facts go missing. 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 quite few parameters that should be properly followed in order to conquer the PACA license, as every individual who is willing to start a business for oneself, can get a designed structure if PACA law. The license for the PACA is actually issued by USDA and is generally provided by the traders of the US. If a person wills to have a proper establishment in such field, then one should properly abide by the PACA law about the rules and regulations that are stated in the law section.

A farmer, who is only responsible to take care of the selling part of one’s produce, should also maintain a proper understanding with that of the rules and laws that are mentioned in the PACA law.  A merchant in US, who receives more than one ton of produce every year, needs to have a PACA license, for making business in the industry.  A retailer who receives a produce of more than 230,000with the sell of the produce, it is the responsibility of the retailer to get the law designed for oneself in a perfect manner.  All such rules and regulations are taken care of the PACA trust and every small rules and laws is taken care by the trust in the correct manner. Therefore, it is quite necessary for both big and small business who deals with fresh and frozen produce, should maintain a proper relation with the laws and rules that are associated with the PACA section.

The various benefits provided by the produce law.

The PACA law which governs everything concerned with fresh or frozen produces is also known as produce law. The trade is international as well as interstate and generally happens between a buyer and a seller, receiver, broker or consignee. This is a federal law and is implemented with the help of state laws and is applicable for the produce trade. The business of fresh or frozen produce which may include fruits, vegetable, fresh roots and herbs comes under this law. This trade can happen within the United States or within the United States. Before the produce contracts are signed under the governing PACA law, they undergo a careful and strict review.

In this blog we will be discussing the nature of produce law, and the necessity of having one. Under the PACA law, it is deemed necessary to have produce law to deal in the produce trade between and within the United States. This is issued by the USDA for US traders who are in this business. Be it an individual entity or a business one, it is necessary to have a PACA license that is issued for especially traders dealing in the produce trade. This law covers all those who are involved, like the farmers, wholesalers, retailers etc. this license is also necessary for those farmers who are with separate sale companies. For all those merchants of US who in a single day at wholesale receives more than one ton of produce that was developed either in a foreign country or the US itself must also have this license of PACA. Any retailer who receives more than $230,000in produce either grown in the home state or outside of their respective area should also must have a PACA license.

PACA law (Perishable Agricultural Commodities Act) is a centralized law, which can also be termed as produce law, is there to provide solutions to disputes which might develop when a deal in fresh or frozen produce between two people goes wrong. They might argue over the terms and conditions regarding the deal and this are where the PACA law comes in. The role of the law is to provide solutions in cases of such disputes by providing the misplaced terms and conditions regarding the deliverance. There are set terms under the produce law, which is helpful in solving these kinds of disputes which can happen between two dealers or businessmen over the deal’s terms and conditions in the absence of set terms and conditions regarding the deal, or over missing invoices and supporting documents which are necessary to complete the deal.

Even the operating cruise liners should also have the PACA license in order to continue in the business and operate according to the legal terms and conditions. For those farmers, however, who sell only their product and do not sell produce for others this law is not applicable. But an array of protective services is offered by the produce law, so it is best to possess one to avail the benefits. PACA license for growing produce in one entity, and sale it in another, it is mandatory for farmers to have a PACA license. The protections and rules are applicable to all transactions related to frozen and fresh produces under this law and hence it is better to have a PACA license which can come handy at any point of time.