Call for action on Perishable Agriculture Commodities Act
Published Tuesday, August 22, 2017 1:34PM EDT
Last Updated Tuesday, August 22, 2017 5:44PM EDT
The Windsor-Essex Regional Chamber of Commerce is calling for action on the Perishable Agriculture Commodities Act.
Chamber officials, along with Essex MP Tracey Ramsey, Red Sun Farms, and the Canadian Produce Marketing Association hosted a news conference on Tuesday.
“Agri-food is the number one or number two industry in Essex County, depending on how you measure it, and we need to ensure that they have the right set of rules to compete,” said WERCC president and CEO Matt Marchand.
The WERCC’s resolution to restore a long-standing trading privilege in place for 75 years for fruit and vegetable growers under PACA was supported by the Canadian Chamber Network at the Canadian Chamber of Commerce AGM in 2015.
Officials say in October 2014, the preferential access to the PACA dispute resolution mechanism for Canadians was removed by the U.S. government.
Currently, Canadian companies have to pay twice the amount they are owed to get access to unpaid funds, according to the chamber.
As an example, if a local grower was owed $50,000 for tomatoes, they would have to post a $100,000 bond in order to make a claim to get their unpaid money resulting from a slow-pay or no-pay situation.
Many small businesses cannot afford to post that kind of money.
Under preferential access to PACA, they would not have to pay the double bond. Previously, it was only $100 to start the process under PACA.
“Local produce growers have been asking both the former Conservative and the current Liberal governments for a payment protection program for too many years,” said Ramsey. “Inaction on this file has negatively impacted our local industry in Essex and we need the government to fulfill its election promises.”
Jim DiMenna, CEO of Red Sun Farms says privileged access to the PACA trust provided Canadian produce exporters into the U.S. cost effective and competitive protection from risk of loss from bad deals.
“If Canada were able to institute a PACA-like trust for the U.S. importers as well as the domestic producers that sell in Canada, this would be a big step in protecting the produce industry from loss of revenue due to insolvency while also restoring Canadian preferential access to PACA,
As we continue to realize tighter margins and rising costs, the exposure has never been higher and to have this payment protection would help a great deal in keeping our industry viable for the future,” said Jim DiMenna, CEO, Red Sun Farms.
“The produce industry relies heavily on a fully integrated trading structure within North America,” says DiMenna.
Ron Lemaire, president of the Canadian Produce Marketing Association says the solution is simple.
“Canada must provide a reciprocal model which protects Canadian farmers and sellers in the event of a bankruptcy,” says Lemaire. “This no-cost solution to the Canadian Government and taxpayers would not only secure essential protections domestically for our industry but will restore access to a vital trading tool in the United States.”