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CA: No more preferred PACA treatment to put hardships on some Canadian shippers

Canadian shippers sending fresh produce into the United States will no longer enjoy preferred treatment under the Perishable Agricultural Commodities Act, which will put additional burdens on shippers filing claims under the act. While it's too soon to measure the exact effect the new situation will have on Canadian shippers, it could limit the ability of some of them to file claims.

“It's early days, so the effect of this is not quantifiable yet,” said Anne Fowlie, executive vice president of the Canadian Horticultural Council. “But we're disappointed. It certainly was an avenue we've appreciated over time.” One of the effects of the status change is that Canadian shippers who seek redress under PACA will have to post a bond that's twice the value of amount of their claim. That will add an additional burden to shippers who may already be in a precarious position.

“If someone is filing a complaint it's because they're not being paid, so there's already a cash flow hardship,” said Fowlie. “Now, they have to double up in order to pursue the money they're owed. It will definitely be a hardship for some, and some may not be able to pursue their claims, and there may be buyers out there than can be in a position to take advantage of that.” Efforts to restore the previous situation may take a while.

“A quick resolution would be a three-month horizon, and I don't see that happening,” said Fowlie. “A resolution is not likely before 12 months, in large part due to a very prescriptive process in terms of how regulatory processes unfold and how legislative acts are made.”

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