The U.S. Department of Agriculture (USDA) filed an administrative complaint under the Perishable Agricultural Commodities Act (PACA) against Spiech Farms LLC of Paw Paw, on Monday, October 1.
The company, operating from Michigan, allegedly failed to make payment to 38 produce sellers in the amount of $1,153,442 from July 2017 through November 2017, according to a press release issued by USDA’s Agricultural Marketing Service (AMS).
The company filed for Chapter 11 bankruptcy protection in the U.S. District Court for the Western District of Michigan in November, 2017. In court filings at that time, Spiech Farms LLC, located in Van Buren County said gross sales fell from approximately $15.8 million in 2016 to $11.8 million in 2017.
The company claimed that financial troubles stemmed from a near total loss of the blueberry crop at the farm’s Georgia operations, and the loss of about 60 percent of its grape crop in Michigan after a late-season freeze, according to court documents in the bankruptcy filing.
According to USDA’s Agricultural Marketing Service, Spiech Farms LLC will have an opportunity to request a hearing. Should USDA find that the company committed repeated and flagrant violations, it would be barred from the produce industry for two years. Furthermore, its principals could not be employed by or affiliated with any PACA licensee for one year and then only with the posting of a USDA approved surety bond.
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, USDA resolved approximately 3,400 PACA claims involving more than $58 million. PACA staff also assisted more than 8,500 callers with issues valued at approximately $151 million. These are just two examples of how USDA continues to support the fruit and vegetable industry.
For further information, contact Travis M. Hubbs, Chief, Investigative Enforcement Branch, at (202) 720-6873, or by email at [email protected].