Clarity for growers on Horticulture Produce Agreements

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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