VFF to host Industry Working Group on Grain Trade Licensing
Monday 28 July 2014
The VFF Grains Group today launched an industry proposal to license the Grain Trade, and has offered to host a working group to help stakeholders collaborate and find an industry-driven solution to the ongoing problem of insolvencies in the Grain Trade.
President of the VFF Grains Council, Brett Hosking, presented the licensing proposal to the Australian Grain Industry Conference’s trade workshop this morning, launching VFF’s discussion paper: Increasing Professionalism and Accountability of the Grains Industry (the paper can be downloaded here
“We are calling for the introduction of a Grain Trade Licence and Grain Trade Guarantee Fund in Victoria,” said Mr. Hosking. “This licensing scheme is to be administered by the Victorian Business Licensing Authority, and is in response to a succession of insolvencies in the Grain Trade.”
“We estimate that these insolvencies have directly cost the Victorian economy between $45-50 million in lost revenue, as well as significantly more in flow-on losses, including a loss of market confidence and negative emotional and health impacts.”
“The impact on market competition is also significant, as ongoing grain trader insolvencies reduce growers’ capacity to trade with smaller or newer firms – in effect, this acts as a barrier to market entry.”
“We are advocating for a form of self-funded self-regulation to introduce standards for the industry, and there is a large role for industry and growers to be engaged in developing such a system.”
“Licensing and insurance is common practice in over 30 states in the United States and Canada, our two largest grain trading competitors, and in many cases has been in operation for several decades.”
“Licensing and regulation is part of everyday life in Australia and is common to most vocations and professions – whether it be trades, financial services, estate agents, or vehicle traders.”
“For many of these licensing schemes there is a system of ‘mutual recognition’ across the country, allowing companies licensed in one state to be recognised in others. If this were established for the Grain Trade it could streamline interstate grain trading and offer protection to industry participants around the country.”
“We are not suggesting growers should not do their due diligence, however both parties in a grain trade have an obligation to meet contractual terms – including the obligation for timely payment.” concluded Mr. Hosking.
Brett Hosking VFF Grains President 0427 593 051
Stephen Sheridan VFF Grains Manager 0408 664 841
Tom Whitty VFF Media Manager 0417 165 784