Act to protect grower interest

The range of items produced on agricultural land is extensive - grain, grapes, hay, nuts, fruits and vegatbles, to name a few. As everyone in the industry knows, producing from the land is just the first step. After this, the crop has to be sold. Having put a lot of time and effort into producing a crop, it is the hands of someone else, usually on the promise of being paid at some later date. But how can somebody be certain they will get paid? Traditionally partiesto a contract generally relied upon terms in the contract commonly referred to as 'retention of title' clauses.

These clauses would stipulate the supplier of goods, such as grapes or hay, would retain the legal title until the buyer paid the purchase price. The difficulty with retention of title clauses is no-one other than the parties to the contract are usually aware of its existence. This has created difficulties for someone who later provides goods to a buyer, as that later supplier does not know whether title has been retained in any goods by an earlier supplier. 

In 2012, the Personal Properties Securities Act 2009 came into effec to assist with this scenario. Since that time it has become used widely in a range of industries, including the agricultural industry. The Personal Properties Security Register was set up to help this. In order to maintain an interest in goods supplied to someone, such as grapes, it is necessary to register the interest on the PPSR. 

In recent times, we have started to see an increasing number of people who view registration on the PPSR as being all that they need to do to protect their interests. This is not true. The Act and the PPSR provide for a complex legal framework that make it impossible to deal with all the issues in one article.

In subsequent Stock Journal articles we will be discussing the operation of the act and common questions that seem to be popping up with increasing frequency. 

This article was written by Anthony Kelly and was published in The Stock Journal on Thursday 12 July 2018. 

Practice Area: Corporate, Commercial & Business , Farm Law

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