Who Needs a PACA License to Buy or Sell Produce?

A business that buys or sells fresh or frozen fruits and vegetables in wholesale quantities as a commission merchant, dealer or broker must hold a license under the Perishable Agricultural Commodities Act (PACA), which USDA administers through the Agricultural Marketing Service (7 U.S.C. 499a and 7 CFR 46.3).

Who counts as a dealer. A dealer is a person buying or selling produce in wholesale or jobbing quantities, which means a combined total of one ton (2,000 pounds) or more of produce in any day shipped, received or contracted (7 CFR 46.2(m) and 46.2(x)). Retailers are dealers when the invoice cost of their produce purchases exceeds $230,000 in a calendar year (7 CFR 46.2(m)(2)).

Fees. Commission merchants, brokers and dealers other than retailers and grocery wholesalers pay an annual license fee of $995 plus $600 for each branch or additional business facility, with total annual fees capped at $8,000. Retailers and grocery wholesalers pay a $100 administrative processing fee with an initial application (7 CFR 46.6).

Operating without a license. A firm that operates without a license may settle its liability if USDA finds the violation was due to inadvertence and not willful. The firm submits the application, pays the fees it would have paid while operating, and pays up to $250 more as determined by the Director (7 CFR 46.10).

The license itself. Each license bears a serial number, the names under which the firm is authorized to do business and the type of ownership (7 CFR 46.11).

Why it matters for employers. PACA licensing ties into who a produce business may hire. The FAQ on PACA employment restrictions covers the limits on employing people tied to sanctioned firms.

Other AMS produce programs. PACA is one of several AMS programs that reach produce firms. Recent examples include the news posts on AMS information collection for federal fruit marketing orders and AMS country of origin labeling information collection.