Insights / February 22nd, 2018

Horticulture Produce Agreements – You say potato, I say potaahhto

On 1 April 2017, (“Start Date”) the new Horticulture Code (“Code”) came into effect. The Code requires anyone who trades in horticulture produce (which includes unprocessed fruit, vegetables, nuts, herbs and other unprocessed edible plants) on or after the Start Date to comply with the terms of the Code and have appropriate written and agreed Horticulture Produce Agreements (“HPA”) in place.

The purpose of the Code is to prohibit growers and traders from trading in horticultural produce without a HPA which sets out the terms of their agreement and the manner in which a trader or wholesaler will deal with the grower’s produce. A HPA provides protection for growers by detailing what the grower and a trader or merchant agree about how they will trade in produce.

As a further protection to growers, the Code requires that traders or merchants dealing with growers must have publicly published the terms upon which they are prepared to trade with growers.

There are a number of obligations to which parties to a HPA must comply which are set out in the Code.

If you grow, you need to know…

The Code requires that your HPA must include amongst other things:

  • How a grower is required to deliver the produce;

  • When payment must be made by traders to growers;

  • Obliges traders to explain how the price will be calculated;

  • How growers can be treated by traders;

  • Obliges parties to the HPA to deal in good faith;

  • Specifications regarding the quality and quantity of produce.

There is a 12-month transition period for parties with existing written agreements. Broadly, after this transition period ends on 1 April 2018, all agreements need to comply with the current Code. This includes agreements entered into before 15 December 2006, which are no longer exempt from the Code.

If an agreement entered into between into before 15 December 2006, or between 15 December 2006 and 31 March 2017 is varied by the parties, the agreement must comply with the Code from the date it is varied.

If you would like assistance regarding your current agreements or with putting a HPA in place, please contact Peter Slegers.

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