“Growers have made it clear to Growcom that they want to know what price their product sells for at point of sale. They want transparency in their dealings with the wholesalers; they want real time price information and this should be readily achievable with modern technology,” said Chief Executive Officer, Pat Hannan.

“Horticulture produce selling is a bit like stocks and shares. The price can shift dramatically in a day and the price paid in the wholesale markets can then dictate the price in the supermarkets.  However, the market information provided by the Market Information Services is not based on real sales data and is too slow.”

“It is disappointing that despite a mandatory Horticulture Code of Conduct being in place for nearly ten years, we continue to hear from our growers many examples of poor practice,” he said. “This point needs to be balanced by the fact that many of our growers confirm that there are valued relationships between growers and wholesalers that are working very well. Some of these relationships extend over several generations.

“It has been a clear failing of the current mandatory Horticulture Code that it only targets one part of the supply chain (the wholesalers) when sadly there are issues across the board. We recommend that the mandatory Code of Conduct be revamped to include all first transactions by the grower, regardless of with whom. That includes processors, retailers and exporters as well as the central markets.

“An effectively enforced Code across the whole supply chain would deliver a profitable growing sector characterised by true market signals and fairer relationships between wholesalers, retailers and suppliers.” 

Under the current federal legislation, growers and traders must enter into a signed and written horticulture produce agreement (HPA) that complies with the Horticulture Code before they can trade with each other.

Traders can be either:

• Merchants – who purchase produce for the purpose of resale, or
• Agents – who sell produce on behalf of growers for a commission or fee.

However, Hannan said that there were still many examples of traders changing between acting as an agent and being paid commission or acting as a merchant and being paid up-front, from transaction to transaction, which means all the risk is borne by the grower.

He said the Code itself which is prescribed under the Competition and Consumer Act 2010,  was largely fine and put in place the safeguards needed to ensure growers weren’t disadvantaged – “but education about the Code has been poor”.

“Fifteen per cent of growers surveyed had not even heard of the Code,” he said. “Moreover, the enforcement of the Code – a task which is the responsibility of the Australian Competition and Consumer Commission - has been lacking.”

Hannan said that an effectively enforced Code across the whole supply chain supported by real time price information would deliver a profitable growing sector characterised by effective pricing systems that clearly conveyed true market signals and rewarded all competent businesses. “Any wholesaler who is acting ethically and transparently has nothing to fear from the Code. The wholesale markets are a very important part of our supply chain. Growers need diverse routes to market. We would just encourage the wholesale markets to improve the performance of some traders.”

“We remind the Federal Government that fairer competition for farm produce and farm sustainability and profitability are key goals in the current agricultural white paper. Here is one clear way to achieve an improved business environment,” he said.

The independent review of the mandatory Horticulture Code of Conduct was announced in June by the Federal Agriculture and Energy Minister, Barnaby Joyce, and the then Minister for Small Business, Bruce Bilson. The review findings are expected to be delivered this year.