WASHINGTON, DC - Recently, the U.S. Department of Agriculture (USDA) imposed sanctions on three produce businesses for failing to meet their contractual obligations to the sellers of produce they purchased and failing to pay reparation awards issued under the Perishable Agricultural Commodities Act (PACA). The three businesses, one operating from New Jersey and two from New York, owe a total of $94,687.

Direct from the USDA Agricultural Marketing Service:

These sanctions include suspending the businesses’ PACA licenses and barring the principal operators of the businesses from engaging in PACA-licensed business or other activities without approval from the USDA. By issuing these penalties, the USDA continues to enforce the prompt and full payment for produce while protecting the rights of sellers and buyers in the marketplace.

The following businesses and individuals are currently restricted from operating in the produce industry:

• Nova Fresh Produce Inc., operating out of Freehold, New Jersey, for failing to pay a $14,680 award in favor of a Texas seller. As of the issuance date of the reparation order, Nekhamiyev Marat was listed as the officer, director and major stockholder of the business.

• PFI Express Inc., operating out of Valley Stream, New York, for failing to pay a $57,638 award in favor of a Florida seller. As of the issuance date of the reparation order, Romilda Silva was listed as the officer, director and major stockholder of the business.

• Herbguy Inc., doing business as Rockhedge Herb Farms, operating out of Pleasant Valley, New York, for failing to pay a $22,369 award in favor of a Florida seller. As of the issuance date of the reparation order, John Alva was listed as the officer, director and major stockholder of the business.

PACA provides an administrative forum to handle disputes involving produce transactions; this may result in the USDA’s issuance of a reparation order that requires damages to be paid by those not meeting their contractual obligations in buying and selling fresh and frozen fruits and vegetables. The USDA is required to suspend the license or impose sanctions on an unlicensed business that fails to pay PACA reparations awarded against it as well as impose restrictions against those principals determined to be responsibly connected to the business when the order is issued. Those individuals, including sole proprietors, partners, members, managers, officers, directors or major stockholders, may not be employed by or affiliated with any PACA licensee without USDA approval.

The PACA Division, which is in the Fair Trade Practices Program in the Agricultural Marketing Service, regulates fair trading practices of produce businesses that are operating subject to PACA, including buyers, sellers, commission merchants, dealers, and brokers within the fruit and vegetable industry.

In the past three years, the USDA resolved approximately 3,500 PACA claims involving more than $58 million. PACA staff also assisted more than 7,800 callers with issues valued at approximately $148 million. These are just two examples of how the USDA continues to support the fruit and vegetable industry.

For further information, contacts, and to read the press release in its entirety, please click the link here.

USDA's Agricultural Marketing Service