Bashas Inc., a retailer headquartered in Chandler, Ariz., which operates retail locations throughout Arizona, has posted a $1.5 million cash surety bond with the U.S. Department of Agriculture. The company posted the bond to obtain a license to operate in the produce industry.
Under the regulations of the Perishable Agricultural Commodities Act (PACA), the company was required to post a bond following its involvement in bankruptcy. USDA will hold the bond for three years, providing assurance to the industry that the company will be able to pay for produce purchased and to conduct business according to PACA rules.
PACA requires that all interstate traders in fresh and frozen fruits and vegetables be USDA licensed. The PACA establishes a code of good business conduct for the produce industry. USDA is authorized to suspend or revoke a trader’s license for violating the act.
In fiscal year 2010, USDA resolved approximately 2,000 claims filed under the PACA involving $30 million. This is just one more way in which the USDA continues to support the fruit and vegetable industry.