WASHINGTON, DC - American Food Distributors Inc., a Colorado-based company, has posted a $260,000 surety bond with the USDA to obtain a PACA license and 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 prior involvement in bankruptcy, according to a press release.

The USDA will hold the bond for three years to provide assurance to the industry that the company will be able to pay for produce purchased and to conduct business according to PACA rules.

In the past three years, USDA resolved approximately 4,600 claims filed under PACA involving more than $87 million. Any PACA licensee looking to employ someone who has previously failed to pay a reparation award, or has been subject to a USDA disciplinary action, must post a USDA-approved surety bond.

Agricultural Marketing Service