WASHINGTON, July, 16, 2021 – The U.S. Department of Agriculture (USDA) has imposed sanctions on Southern Produce Distributors Inc. (SPD), Faison, N.C., for violating the Perishable Agricultural Commodities Act (PACA). These sanctions include barring the business and the principal operators of the business from engaging in PACA-licensed business or other activities without approval from USDA.
SPD failed to pay $3,488,367 to 33 sellers for produce that was purchased, received and accepted in interstate and foreign commerce from April 2017 to June 2018. This is in violation of the PACA. SPD cannot operate in the produce industry until June 25, 2023, and then only after they apply for and are issued a new PACA license by USDA.
The company’s principal, Kelley Precythe, may not be employed by or affiliated with any PACA licensee until June 25, 2022, and then only with the posting of a USDA approved surety bond. The company’s other principal, Sterling Cook, has challenged his responsibly connected status.
USDA is required to publish the finding that a business has committed willful, repeated and flagrant violations of PACA as well as impose restrictions against those principals determined to be responsibly connected to the business during the violation period. 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.
By issuing these penalties, USDA continues to enforce the prompt and full payment for produce while protecting the rights of sellers and buyers in the marketplace.
For further information, contact Corey Elliott, Chief, Investigative Enforcement Branch, at (202) 720-6873 or PACAInvestigations@usda.gov.
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 3,625 PACA claims involving more than $104 million. PACA staff also assisted more than 7,600 callers with issues valued at approximately $166 million. These are just two examples of how USDA continues to support the fruit and vegetable industry.
USDA touches the lives of all Americans each day in so many positive ways. In the Biden-Harris Administration, USDA is transforming America’s food system with a greater focus on more resilient local and regional food production, fairer markets for all producers, ensuring access to safe, healthy and nutritious food in all communities, building new markets and streams of income for farmers and producers using climate smart food and forestry practices, making historic investments in infrastructure and clean energy capabilities in rural America, and committing to equity across the Department by removing systemic barriers and building a workforce more representative of America. To learn more, visit www.usda.gov.
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