Traders must give growers regular statements about how they have managed the grower’s produce.
Traders must include certain information in their statements to growers.
Statements are for a certain period.
Traders have responsibilities under the Horticulture Code of Conduct to report to growers.
What is reported depends on whether the trader is an agent or merchant.
Horticulture produce agreements must state the reporting period. This is the period that the trader – as an agent or merchant – is required to report to the grower. The reporting period can be, for example, monthly or quarterly.
Following the end of a reporting period, the trader must provide a statement to growers within a specified period (the statement period).
Penalties may apply if a trader doesn’t give a statement to each grower they deal with.
The statement to growers includes information to help the grower understand the reasons for the price of their produce and to see factors in the supply chain that impact price.
Statements from the agent to grower
The statement from the agent tells the grower the:
- date/s when the produce was delivered to the agent
- date/s the agent sold the produce to the buyer
- type and amount of produce sold
- sale price – the price the produce received when it was sold
- amount deducted by the agent from the sale price.
It also lists any unsold produce during the reporting period. This includes:
- the amount that wasn’t sold and the reasons
- how much produce was destroyed by the agent
- the cost of destroying the produce
- how much of the grower’s produce the agent has left at the end of the period.
Statements from the merchant to grower
The statement from the merchant tells the grower the:
- quality and amount of produce bought by the merchant
- date/s the produce was delivered to the merchant
- date/s that the merchant purchased the produce from the grower
- price paid to the grower for the produce.
If the price for the produce was determined by a method or formula, the statement must also detail:
- the gross sale price of the produce, which is the price received by the merchant from a purchaser, such as a supermarket or other third party
- any produce not sold
- any produce destroyed or set to be destroyed
- the reason the produce needed to be destroyed.
Traders must keep a copy of their statements for at least 6 years after they give them to the grower. For more information, see Record keeping under the horticulture code.
Joan grows oranges and pears and has a horticulture produce agreement with Fruit Buyers Pty Ltd to sell her produce. Under the agreement Fruit Buyers Pty Ltd acts as a merchant and they use a method or formula to determine the price that Joan receives.
On 6 March, Joan delivered 100 boxes of oranges to Fruit Buyers Pty Ltd, and 100 boxes of pears on 10 March. One box of pears was destroyed and all other produce was sold by the end of March.
To comply with the horticulture code, Fruit Buyers Pty Ltd needs to be transparent about each financial transaction involving Joan’s produce. This includes the gross prices they received from the third party.
Gross sales price is the price received when the merchant sells the produce to a third party. In this example, the total gross price is $8,700. It must be included on the grower statement if a formula has been used to determine the price paid to the grower. In this example, the formula used was a 10% margin deducted from the gross sales price.
This is shown in the following illustrative example of a simplified grower statement: