CLINTON SIGNS PACA CHANGE INTO LAW

JOYCE BARRETT

WASHINGTON (FNS) -- A long-sought reform of the Perishable Agriculture Commodities Act, or PACA, became law when President Clinton signed it last month.

PACA was created 65 years ago to govern the conduct of the produce business and ensure prompt payment to suppliers, but had fallen under sharp criticism in recent times as obsolete and unfair to retailers, who said they were paying into a system from which they derived little or no benefit.

The signing of the new compromise law signified the denouement of a controversial industry tug-of-war that grew increasingly bitter, with shippers and receivers in direct conflict over whether PACA should survive, and, if so, in what form.

"This is one of the few pieces of legislation signed into law that will significantly reduce government regulations in the marketplace," commented Kevin Burke, vice president of government relations for the National-American Wholesale Grocers' Association, in a statement.

"This new law benefits the entire food industry -- from the small family farmer raising watermelons and cucumbers to the largest wholesale grocer or food-service distributor shipping produce across the country," Burke said.

The reformed PACA brings several changes, including a redesign of the fee structure, which over a period of three years releases retailers and wholesale grocers from the obligation of buying a PACA license while still preserving their coverage in the program.

Retailers and wholesale grocers will pay $400 for a PACA license renewal, with a $4,000 branch fee cap, on the first anniversary of license renewal after Nov. 15, 1995. License fees for the subsequent two years will be 75 percent and 50 percent, respectively, of the amount paid on the first anniversary date.