What is PACA?
PACA is the federal law which applies to interstate and international trade in fresh and frozen produce. If you sell or consign fresh or frozen fruits or vegetables, fresh herbs or roots into the United States or between states in the US, then the PACA law almost certainly applies to your dealings with your receiver, consignee, broker or buyer. PACA is the acronym for a federal law known as the Perishable Agricultural Commodities Act. Unlike trade in other products which is subject to state law, produce trade in the United States is subject to federal law. However, all produce traders should keep in mind that it is quite easy to waive PACA protections in a produce sale contract. All produce contracts should be carefully reviewed before they are signed.
The PACA law supplies missing terms to produce agreements. When two businesses deal in fresh or frozen produce, they may not agree as to all the terms for the delivery of the produce. They may only have an invoice and no other document that describes the terms of their deal. PACA fills in the gaps and provides automatic terms which apply to produce transactions when the two parties have not agreed to these additional terms.
The PACA law is found in the United States Code, Chapter 7, Section 499, in the PACA regulations, found un 7 CFR Section 46 and in cases decided in the PACA branch of the USDA and in cases decided mostly in United States District Courts. Learn more about the PACA Statute and PACA Regulations.