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Helping Reduce Risk and Facilitate Trade of Fruits and Vegetables

Posted by Charles W. Parrott, Deputy Administrator, AMS Specialty Crops Program in USDA Results Trade
Jun 06, 2016
Romaine harvest in California
USDA’s Agricultural Marketing Service helps protect growers, like the romaine lettuce producer pictured above, by representing American interests at meetings of the Dispute Resolution Corporation (DRC).

Now that it’s June, many of us are enjoying a variety of fresh fruit and vegetables that will be available throughout the summer.  During the rest of the year, some of these same fresh fruits and vegetables are available to American consumers thanks to trade agreements with Canada and Mexico.

In the last five years, the value and volume of fresh fruits and vegetables from Canada and Mexico to the United States has grown.  In 2015, the U.S. imported more than 2.8 billion pounds of fresh fruits and vegetables from Canada, valued at $1.4 billion.  From Mexico, the U.S. imported 17.4 billion pounds of fresh fruits and vegetables for $9.1 billion.  U.S. fruit and vegetable growers also have benefited.  In 2015, the U.S. exported nearly 7.1 billion pounds of fresh fruits and vegetables to Canada and Mexico, worth $4.2 billion.

With more market integration between the three countries, the potential for disputes can also increase. To address potential issues, the North American Free Trade Agreement created a unified system to enable effective trade dispute resolution. The Fruit and Vegetable Dispute Resolution Corporation (DRC) handles these disputes for the fruit and vegetable industry.

The DRC is a non-profit organization established in February 2000 to smooth the trade of fruits and vegetables between Canada, Mexico and the U.S. It helps its members, including buyers, sellers and brokers of fruits and vegetables, resolve complaints about contract and payment issues as well as about the condition of the fruit and vegetables.  This system is modeled on the dispute resolution system in the Perishable Agricultural Commodities Act (PACA), administered by AMS.  Today, the DRC has nearly 1,600 members.

Last week, I represented USDA’s Agricultural Marketing Service (AMS) at a meeting of the DRC. The recent meeting included topical discussion regarding Canada’s efforts to establish procedures similar to what the United States has had since 1984 that would give sellers of fruits and vegetables a priority status in the event their buyer becomes insolvent or files for bankruptcy protection.  We also discussed ways to expand the number of DRC-licensed members in Mexico.  All of this would provide added stability to the market place, and benefits farmers, produce suppliers, buyers, and consumers in all three countries.

Since its inception in 2000, the DRC has successfully resolved thousands of trade disputes worth tens of millions of dollars.  No matter the time of year, its members are working to help bring fresh fruits and vegetables to markets and stores throughout the United States, Canada and Mexico.

Category/Topic: USDA Results Trade