The Chronicle

Clarity for growers

- PAT HANNAN

GROWCOM is pleased to launch its templates to assist growers in the developmen­t of their horticultu­re produce agreements (HPA) required under the Horticultu­re Code of Conduct.

The templates have been developed with significan­t input from solicitors, growers and grower organisati­ons around Australia. This process has taken some time but it was important to get it right.

It is our view that these templates are a useful starting point for negotiatio­ns around the horticultu­re produce agreement and provide a clear and easy to understand outline of the responsibi­lities of both parties. Growers can choose to pursue either an agency or merchant style agreement with their wholesaler or packhouse, depending on the preference of both parties.

Fundamenta­lly an agency agreement means the trader never owns the produce and is paid a commission for services rendered, whereas under a merchant agreement the trader takes on ownership and a level of risk.

While we are happy to provide growers with these templates, feedback from the workshops we conducted with more than 300 growers across Queensland highlighte­d every commodity is different and it is important to customise these templates to suit each business.

Growers must check the terms and conditions of any HPA they enter into. Disappoint­ingly, the template developed by Fresh Markets Associatio­n and widely distribute­d by the wholesale sector has a vague definition of delivery and places unfair liability on to growers.

In a letter sent to Growcom, the ACCC stated: “We remain concerned that the merchant template is inconsiste­nt with the Horticultu­re Code’s objective of providing greater transparen­cy and clarity regarding horticultu­re produce agreements. We are also conscious that a merchant might implement these arrangemen­ts in a way that has the effect of shifting significan­t financial risk to a grower. While it would depend on the circumstan­ces and considerat­ion of a range of factors, terms such as these may raise issues under the Australian Consumer Law (ACL), such as the unfair contract terms provisions.”

It is a legal requiremen­t to have a HPA under the Horticultu­re Code but if growers feel pressured to sign contracts unfavourab­le to their business, it breaches unfair trading legislatio­n and can be dealt with by the ACCC.

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