USDA proposes nearly doubling PACA license fees to shore up program
by Joan Murphy | March 16, 2010
WASHINGTON -- Fifteen years after the last Perishable Agricultural
Commodities Act increase went into effect, the U.S. Department of
Agriculture is proposing to nearly double the annual license fees, starting
The PACA protects growers, shippers, distributors and retailers by
prohibiting unfair and fraudulent trade practices. In 1995, PACA annual
fees increased to $550 from $400 for all licensees except retailers and
grocery wholesalers. But office cutbacks and yearly appropriation
supplements have not saved the program from proposing increases, USDA
said in a March 11 Federal Register notice.
Without a fee increase in fiscal 2011, the program would exhaust its reserves
by the second quarter of FY 2011 and would soon need to reduce its level of
service to the industry, according to USDA's notice.
"We propose to increase the current base annual license fee for commission
merchants, brokers and dealers" to $995 from $550, according to the
Federal Register notice. "We also propose to increase the current $200
additional fee for branch locations in excess of nine to $600 for each branch
location starting from the first branch. We further propose to increase the
current aggregate fee maximum” to $8,000 from $4,000, said USDA.
USDA is also planning to remove the phase out of license fees by retailers and
grocery wholesalers and eliminate the multi-year license renewal option for
commission merchants, brokers and dealers.
While the PACA program has not seen a fee increase in 15 years, it may
create a financial challenge for some businesses during this economic
downturn, Lee Mannering, Produce Marketing Association's government
relations and public affairs manager, said in a statement.
The industry has rubber-stamped the fee increase, however, as the USDA's
Fruit & Vegetable Industry Advisory Committee unanimously recommended to
the secretary of agriculture its approval of the proposed license fee increase
The proposed rate hike would funnel $12.4 million to the PACA branch and
allow it to maintain its current level of service until FY 2015, when the
program is expected to dip low in reserves once again, according to USDA.
Comments on the proposal are due May 10.