CHANGING TIMES FOR PACA

David Merrefield

Sixty-five years seems like a long time, and it is.

Look at how much has changed: In 1930 the nation was just entering the Great Depression and all the political and social dislocations the second World War would engender were still years off. From the vantage point of 1930, it would have been difficult to imagine changes that the modern era would bring, even in areas as common as transportation and communication: It would have been impossible to conjure up images of a network of continuously scheduled jet-aircraft flights, the ease of ground transportation made possible by interstate highways, convenient national telephone service, computers and fax machines. Politics looked different in 1930 too, of course. Herbert Hoover sat in the White House, Andrew Mellon presided over Treasury and Arthur Hyde ran the Agriculture Department.

Arthur Hyde? That's not a name that springs to mind as readily as some others from the era but maybe it's a more important name than it seems since the shadow of the Agriculture Department of 1930 falls across the present day in the shape of the Perishable Agricultural Commodities Act. It was in 1930 that PACA went into law as one of the first concessions made to the budding belief that government should do something to ameliorate effects of the Depression. PACA remains in effect to this day as a program of the Department of Agriculture.

PACA was instituted to set rules to govern produce buying and selling, a form of commerce that had been at the mercy of unenforceable verbal agreements. PACA stipulates that buyers must accept shipments of produce that meet specifications and that payment must be made in 10 days. The cost of administering and enforcing PACA is underwritten by licensing fees on various industry segments. Perhaps half the money comes from conventional wholesalers and retailers, the balance from others earlier in the distribution chain. Growers pay nothing.

The central PACA provisions -- and there are many lesser ones -- made sense for this big nation at a time when transportation was slow and communication means were nearly as slow. For a few years now, many on the retail and wholesale side of the industry have argued that modern transportation and communication methods -- to say nothing of general provisions of law and jurisprudence -- have rendered PACA worthless, and that it should be repealed. That position is held by the Food Marketing Institute, the National Grocers Association and the National-American Wholesale Grocers' Association. And, a bill that would repeal PACA was introduced in Congress late last month. Groups such as the United Fresh Fruit and Vegetable Association and the Produce Marketing Association concede that PACA should change -- particularly in terms of the retailer and wholesaler payments to the program -- but argue that it should remain largely in effect. United is now rounding up a legislator to introduce a bill that would do just that. (For more on the big PACA brouhaha and United's efforts, see the news article on Page 15 written by reporter Amy I. Stickel about last week's United convention in Anaheim, Calif.)

How should this issue play out? Doubtless, PACA is destined for big change, but more than that, it's difficult to see why it shouldn't be repealed outright.

The logic behind repeal looks good. Let's face it: Other perishable commodities such as dairy, poultry, beef, pork and eggs somehow go to market. Some enjoy special protection and encouragement under law, but none have their own PACA. Those now favoring the fashion of less government aren't always correct, but they aren't always wrong, either.