Horticulture Code of Conduct Amended - Stronger Protections and Penalties

Horticulture Code of Conduct Amended - Stronger Protections and Penalties

The Horticulture Code is a mandatory code of conduct.  There have been recent changes to the Horticulture Code that strengthens the protection it provides. As a grower, you need to know how the changes affect you and what your rights and obligations are under the Code.

 

The Horticulture Code aims to create transparency around the grower-trader relationship and establish fair dispute resolution mechanisms in the horticulture industry. The Code covers trade in unprocessed horticulture produce, such as fruit, vegetables, edible fungi and nuts, and applies to growers, agents and merchants.

The Code has been around since 2006. The updated Code sets out how people trading in horticulture produce should treat each other. This includes an obligation for all parties to act in good faith. The Code also establishes how agents and merchants should treat growers and growers’ produce. It does this by requiring all parties to have a written contract with each other, called a Horticulture Produce Agreement (HPA). It is now illegal to trade in horticulture produce without a HPA and all parties, including growers, agents and merchants, can be subject to penalties if they don’t have a HPA.  You should seek legal advice if you are unsure whether your HPA is compliant with the Code.

The most recent changes to the Code came into effect on 1 April 2017. Before 1 April 2017, if you had contracts that you had entered into before 16 December 2006 you did not have to comply with the Code. Because of these long-standing agreements, up to 80 per cent of trade in horticulture produce had no Code protection. The updated Code changes this. Pre-16 December 2006 contracts must now comply with the Code, along with all HPAs entered into since 16 December 2006. If you had a contract in place before 1 April 2017, you have until 1 April 2018 to make sure your HPAs are compliant with the updated Code. However, if you amend an existing HPA or enter into a new HPA, you must ensure that the HPA complies with the Code immediately.

In summary, the changes that the new Code bring are;

  • All parties are entitled to the Code’s dispute resolution processes, must comply with the new record-keeping requirements, and have an obligation to act in good faith.Good faith means acting reasonably and not exercising your powers arbitrarily or for some irrelevant purpose. Your conduct may lack good faith if you act dishonestly, for an ulterior motive or in a way that undermines or denies the other party the benefits of a contract.

  • Important protections for growers; traders are required to pay growers by a specified date, regularly report to the grower on sales, and exercise reasonable care and skill in handling growers’ produce.

  • Record keeping provisions; growers and traders must also retain certain records for at least six years.

  • Dispute resolution processes; the new Code sets out a process for resolving disputes, although parties are free to choose their own process if they wish.

  • Loss recovery options; if a grower or trader suffers loss because of a breach of the Code, they have a right to take legal action to recover their loss. The Code also sets out that the Australian Competition and Consumer Commission (ACCC) may seek penalties through the courts where certain sections of the Code are breached.

The ACCC has prepared the following resources to assist growers and traders;

Bundaberg Fruit and Vegetable Growers will be running workshops for the industry in the new financial year to assist growers and traders in the region to understand the new Code and develop appropriate HPA’s. Workshop dates and details will be advertised in Fresh Pickings and Your BFVG at Work. To register your interest email VegNET Industry Development Officer, Michelle Haase.