Review of the Horticulture Code

The Horticulture Code of Conduct, the code that governs interactions between growers of produce and those who sell their products, is under review. The review was announced by the Hon Barnaby Joyce and Small Business Minister Bruce Billson.

The Horticulture Code was established in 2007 and regulates trade of horticultural produce between growers and traders, providing clarity and transparency for transactions. Currently, growers and wholesale traders need to comply with the Horticulture Code when buying and selling horticulture produce as it is mandatory under the Australian Competition and Consumer Act 2010 and enforced by the Australian Competition and Consumer Commission (ACCC). It does not apply to fruit sold for export, direct to retail or for processing. The current Code provides a mechanism for dispute resolution through the Horticulture Mediation Adviser who will try to help the parties resolve their dispute.

The review will provide an opportunity for stakeholders to raise issues concerning the code through a public consultation process. It will examine:

  • The extent to which the code currently applies to arrangements between growers and traders
  • The effectiveness of the code in meeting its purpose, including improving the clarity and transparency in current arrangements between growers and traders
  • The knowledge of the code by growers and traders
  • The extent to which hybrid trading arrangements occur in the industry
  • The enforcement of the code and the function of the horticultural mediation adviser
  • Options for the future of the code, including any further measures that would improve the operation of the code
  • Any other related issues raised in the Competition Policy Review and the draft Food and Grocery Code of Conduct.

The review has been welcomed by some in the industry who consider the current code to be ineffective, lacking transparency and difficult to enforce. They say producers do not receive timely, accurate and transparent information about the sale price of their fruit and believe and that many transactions still occur under a hybrid arrangement where neither a true agency nor merchant transaction occurs. They believe the current system is encouraging producers to deal directly with major retailers as there is greater transparency. They have called for a new code that provides producers with more power to negotiate agreements with traders and clarity as to the costs associated with selling their product.

Supporters of the code believe that when followed properly it is effective for regulating transactions between growers and wholesalers. They say that any issues are not with the code itself, but with trading arrangements that lack communication and trust between individual parties.

Stakeholders will be invited to provide feedback and comment on the issues paper. A draft issues paper is expected to be available for comment shortly and the review delivered in 2015. For more information about the code or the review process, please visit www.agriculture.gov.au/horticulturecodereview or email hortcode@agrulture.go.a .