An independent review of Australia’s Horticulture Code of Conduct has found the code to be outdated, largely unenforced and ineffective, with an irrelevant dispute resolution mechanism.
The review took into account 44 submissions from industry stakeholders and found that the majority of horticulture trading did not take place under the horticulture code, which exempts pre-code contracts, processors, exporters and retailers.
Changes in trading since the code commenced in 2007 have also come to light during the review, with more growers supplying directly to retailers and new technology improving transparency on pricing and improving communication on quality. The review also found the code’s definitions of merchants and agents did not fit with the way traders operate.
Most damning was the findings on the code’s dispute resolute mechanism, which the review found was “irrelevant, inappropriate and largely not adopted by parties in the horticulture sector”.
“In general, growers believe that the low uptake of the code’s dispute resolution mechanism is due to a fear of retribution, whereas central markets contend that the reason for low uptake is that there are few disputes.
“Further, it is widely believed that the dispute resolution mechanism prescribed by the code does not address the majority of disputes that arise in the course of what appears to be acceptable market practice in the horticulture sector.
“Most disputes are related to issues of the quality and timing of the delivery of produce, payments to growers, and the transparency of prices.”
The review, conducted by Mark Napper and Alan Wein, has made 13 recommendations for the Australian government to consider, including increasing the education around the code to improve business practices and increase transparency within the horticulture industry.
Other recommendations include removing the distinction between agents and merchants, introducing an obligation for parties to act in good faith, removing the exemption for contracts entered into before 2007 and replacing the dispute resolution mechanism with an improved system.
The code was established in 2007 and is due to sunset on 1 April 2017.