Horticulture organisation Growcom welcomed the announcement of the new Horticulture Code of Conduct which will come into force on the 1st of April 2017.
Chief Advocate Rachel Mackenzie said the new Code was developed after a major independent review and months of negotiation with the Australian Government and the wholesale sector.
“Overall we are happy with the new Code as it deals with some major issues which prevented widespread uptake of the previous Code, and the inclusion of Civil Penalties means it has some actual teeth,” Ms Mackenzie said.
“The biggest change is all transactions in the wholesale markets will be covered by the new Code regardless of the existing trading relationship.”
She said all contracts must be compliant with the new Code by April 2018 and all transactions must be made under a Horticulture Produce Agreement (HPA).
“The purpose of the Code is to improve transparency, not obstruct normal healthy business relationships, and for that reason additional flexibility has been added to the Code to reflect what happens on the market floor,” she said.
“There is still a requirement to differentiate between merchant and agent transactions but growers and wholesalers now have the option to negotiate a method or formula for calculating a price under merchant transactions prior to the produce being sent to market.
“There are also additional information requirements for merchants who use a method or formula for calculating a price.
“Whilst we do have some concerns with this hybrid model of trading, the additional information requirements along with the requirement to act in good faith and the financial penalties built into the Code provide additional protections for growers.”
Ms Mackenzie said discussions were under way about educating growers on the new Code.
“We are currently working with the ACCC to help them develop education materials to educate growers on their rights and obligations under the new Code and to develop an HPA template,” she said.
“We believe this new Code represents an opportunity for growers and the wholesale sector to work closely together to ensure our members all benefit from the protections built into this Code but also understand the flexibility it brings to the table.
“The bottom line is that by April 2018 everyone needs to be operating under a Code compliant HPA which clearly sets out terms of trade such as payment terms and quality specifications.
“We hope the new Code will enable long-term positive trading relationships in the marketplace to prosper and give growers the tools to develop new trading relationships on fair terms.
“We would once again like to thank Senator Ruston and her team for their ongoing input and interest in brokering a reasonable outcome for both growers and wholesalers.”