Agriculture committee  When there's a bankruptcy of a produce firm.... I hate to put this out there like this, but the produce is usually their travelling money. No one leaves produce to sit when they close the doors. They sell it out at fire sale prices. They do something with it. There's never produce there.

Agriculture committee  Somewhere there is an account receivable, I would argue, unless the person just didn't bother to collect the account receivable.

Agriculture committee  There have been many studies over the years on these kinds of things. The uniqueness of the produce isn't just that it's so perishable; it's that a strawberry was picked on Monday morning and you can put it on your breakfast food on Friday. It may have shipped directly from the farmer's field to the chain store, but it's gone through four or five different hands to get there.

Agriculture committee  That's part of the reason. The answer to your question is that it has been studied. In the industry's view—and I believe, quite frankly, following the RCC analysis—it's just not viable in this industry.

Agriculture committee  If I might adjust that just a bit, the produce assets themselves—if it's similar to what's in the U.S.—never actually become part of the bankruptcy estate. The receiver or the trustee would look at it and say, “This belongs to the farmer, so I'll set it over here.” If the receiver has claims worth $200,000 and accounts receivable worth $100,000, those farmers get 50 cents on the dollar.

Agriculture committee  It really doesn't. Currently, buyers all must have either a CFIA licence or a DRC membership. By this time next year, hopefully, it'll be a DRC membership. We have prompt payment as 10 days. Thirty days is about as long as it gets. People would have filed a dispute long ago. In fact, under the DRC rules, to help push the due diligence, if a seller doesn't bring his claim forward within nine months, he loses his rights to that money.

Agriculture committee  The bankruptcy work, such as what Professor Cuming has done, needs to be addressed.

Agriculture committee  We asked Professor Cuming to take a look at the PACA as it exists in the United States without any bias. We then asked him to take his experience as a lawyer, a law professor, a constitutional expert, a bankruptcy expert—

Agriculture committee  He is suggesting that if you are the company that went bankrupt, you took my product, you have my product, you have the cash from selling my product, or you have an account receivable pending from the sale of my product. I want one of them.

Agriculture committee  Thank you. Mr. Chairman and members of the committee, thank you for this opportunity to speak to you regarding the Perishable Agricultural Commodities Act, or the PACA, as it is more commonly known. My name is Fred Webber. I am the president and CEO of the Fruit and Vegetable Dispute Resolution Corporation.

Finance committee  Just for a bit of a clarification, as you say, there really are two pillars here. The first pillar is dealing with slow-pay or no-pay contract issues between solvent businesses.

Finance committee  What we're talking about here will get us a long way towards resolving that problem with our neighbours around the world, quite frankly, but particularly with the United States. In terms of the second part of this, when there is an insolvency, it is a trade irritant. I will say that.

Finance committee  No, sir. It's strictly related to fresh fruits and vegetables.

Finance committee  When the DRC model was put forth originally under NAFTA, a portion of our charter...I hate to say “required”, but it did require that we be open to look at other commodity groups. We were approached by a couple of firms in Mexico regarding sugar and coffee. Those were never followed up on.

Finance committee  In the vast majority of our cases it's a quick phone call. We handle hundreds, if not thousands, every year just by talking to people about what is the right thing to do. Probably the strength of what we do, though, is in the default rules that kick in for members. There are times when there is that delay at the border, it's been out of refrigeration for a period of time, and it may no longer be suitable for a supermarket to bring that in and put it in a dry tray.