PACA License Requirements:
What You Need to Know
The Perishable Agricultural Commodities Act requires most produce businesses to be licensed by the USDA. Here’s who needs a PACA license, how to get one, and what happens if you don’t.
What Is a PACA License?
A PACA license is a federal license issued by the USDA under the Perishable Agricultural Commodities Act of 1930. It’s required for most businesses that buy or sell fresh or frozen fruits and vegetables in interstate or foreign commerce.
Think of it like a driver’s license for the produce industry. It proves to your customers and suppliers that you’re a legitimate business committed to honoring contract terms, paying promptly, and maintaining trust assets.
Beyond compliance, the PACA license unlocks access to the PACA Trust — a powerful protection that puts produce sellers in priority status for payment ahead of all other creditors if a buyer defaults.
PACA at a Glance
Who Needs a PACA License?
Whether you need a license depends on your role in the supply chain and your volume. Here’s how the USDA categorizes it.
Wholesalers, Distributors & Jobbers
Any person buying or selling more than 2,000 pounds of fresh or frozen fruits and vegetables in a single day must be licensed. This covers wholesalers, processors, truckers, grocery wholesalers, and foodservice distributors.
Brokers & Commission Merchants
Anyone who negotiates the sale of produce on behalf of another party must be licensed from the very first transaction. This includes commission merchants, brokers, and growers’ agents. An exception exists for brokers handling only frozen produce until sales exceed $230,000/year.
Retailers & Restaurants
Retail businesses are required to obtain a PACA license once the invoice cost of their fresh and frozen produce purchases exceeds $230,000 in a calendar year. This includes grocery chains, independent grocers, and restaurants that meet the threshold.
Growers & Farmers
Growers selling only their own produce are not required to have a PACA license. However, many choose to obtain one anyway because licensed growers can more easily preserve PACA Trust benefits by adding a simple statement to their invoices.
Importers & Exporters
U.S.-based importers dealing in produce are subject to PACA licensing requirements. Non-residents buying or selling from outside the United States are generally not required to hold a license, though many obtain one to access Trust protections.
In-State Processors & Canners
Most food processors and canners that source produce within the state where they’re located are not required to hold a PACA license, unless the product is frozen or packed in ice.
How to Apply for a PACA License
The USDA makes the application process straightforward. Here’s what to expect.
Determine Your License Type
Identify whether you’ll be licensed as a dealer, broker, or commission merchant. Your classification depends on how you operate in the supply chain — whether you take title to produce, negotiate sales on behalf of others, or sell on consignment.
Complete the Application
Download the PACA application form from the USDA Agricultural Marketing Service website, or apply online. You’ll need to provide your business name, ownership structure, principal officers, business locations, and the nature of your produce operations.
Submit with Payment
Mail or submit your completed application along with the $995 annual license fee. Additional branch locations cost $600 each. Retailers and grocery wholesalers pay a $100 processing fee, and their license is effective for three years.
Receive Your License
Once approved, the USDA issues your PACA license. You can display it using the inscription “Licensed under the PACA” on your business materials. Your license must be renewed annually by your anniversary date to remain active.
Maintain Compliance
Renew on time each year, report changes in ownership or officers, and ensure your business practices comply with PACA’s fair trading rules — including prompt payment, accurate representations, and maintaining trust assets.
What Does a PACA License Cost?
PACA is a user-fee financed program. Here’s the current fee structure.
Base Annual Fee
Covers your primary business location. Applies to commission merchants, dealers, and brokers. Renewed annually on your anniversary date.
Branch Location Fee
Each additional business facility or branch location beyond your primary office requires a separate $600 annual fee.
Maximum Annual Fee
No matter how many branches you operate, total PACA licensing fees are capped at $8,000 per year. A $50 reinstatement fee applies if your license lapses.
What Happens Without a License?
Operating a produce business without a valid PACA license carries serious consequences.
Monetary Penalties
Anyone knowingly operating without a license faces fines of up to $1,200 per violation plus $350 for each day the violation continues. These penalties add up fast.
Court Injunctions
The USDA can obtain a federal court injunction to prohibit you from trading produce without a license. This can effectively shut down your operation until you come into compliance.
Loss of Trust Protections
Without a license, you lose easy access to PACA Trust benefits — the payment priority mechanism that protects produce sellers when a buyer defaults or goes bankrupt. Licensed sellers simply add trust language to invoices; unlicensed parties must file within 30 days.
How Blue Book Helps You Verify PACA Status
Knowing the PACA requirements is only half the equation. The other half is verifying that the companies you’re trading with actually hold a valid license.
Blue Book members can instantly check any company’s PACA license status alongside credit scores, payment history, and six proprietary trade ratings — all in one search. Use our PACA broker lookup to verify any trading partner in seconds.
See It in Action →PACA License Verification
See active/inactive license status for any company in the Blue Book directory alongside their full credit profile.
License Lapse Alerts
Get notified the moment a trading partner’s PACA license lapses, expires, or is suspended — before you extend terms.
Credit + PACA Together
PACA status is one data point. Blue Book layers it with payment trends, dispute history, and fraud signals for a complete risk picture.
Frequently Asked Questions
Growers selling only their own produce are not required to be licensed under PACA. However, many growers voluntarily obtain a license because it provides an easier method for preserving PACA Trust benefits — they can simply add a trust statement to their invoices rather than filing a separate written notice within 30 days of a missed payment.
PACA licenses for commission merchants, dealers, and brokers must be renewed annually by your anniversary date. The USDA sends renewal notices in advance. If you miss the deadline, your license can be reinstated within 30 days by paying the annual fee plus a $50 reinstatement fee. Retailers and grocery wholesalers receive a three-year license renewed at no additional cost.
The PACA Trust is a statutory protection that puts produce sellers in priority status for payment. When a buyer receives produce but hasn’t paid, the produce, any products derived from it, and all receivables are held in trust for the seller’s benefit. This means produce sellers get paid before banks, landlords, and other creditors — even in bankruptcy. It’s one of the strongest payment protections in any industry.
Yes. You can submit an informal complaint to the PACA Division within 9 months of the payment due date. Filing requires a $100 fee and written documentation of the transaction. If informal mediation fails, formal proceedings can be initiated. Alternatively, Blue Book members can file through Trading Assistance for faster resolution with fees as low as 0%. Learn more about resolving produce trading disputes.
You can call the USDA’s PACA hotline at 1-800-495-7222 for basic license status. For a faster, more comprehensive approach, Blue Book members can use the PACA broker lookup to verify license status alongside credit scores, payment history, and trade ratings in a single search — giving you the full risk picture before you trade.
PACA is a federal law administered by the USDA that governs licensing, fair trade practices, and the statutory trust for produce transactions. Blue Book is a private intelligence platform that helps you make informed trading decisions by aggregating PACA data with credit scores, payment trends, fraud signals, and proprietary trade ratings — all in one place. Blue Book also provides claims and collections support when produce trading disputes arise. They’re complementary: PACA sets the rules, Blue Book helps you trade smarter within them.
A PACA License Is the Starting Line. Blue Book Is Your Advantage.
Verify any company’s PACA status, credit score, payment history, and trade ratings instantly. Join the platform trusted by 20,000+ produce companies for over 125 years.
