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Protecting Your Interests

Will your interests be protected when selling your grain this season?

Rhys Bower – Solicitor, Commercial Property Law

9 September 2016

With this year’s harvest approaching, it’s timely to remember the steps that growers must take to protect their interests under the Personal Property Securities Act 2009 (Cth) (PPSA), and to be aware of the potentially devastating consequences of failing to take these steps

The PPSA and grain sales

The PPSA applies to personal property, being property other than land.  Importantly this includes goods, livestock, plant / equipment and crops. 

Under the PPSA, the normal retention of title clauses found in grain sale contracts (including the widely used GTA 3 documentation) are not effective unless the grain grower registers these arrangements on the Personal Property Securities Register (PPSR). 

If retention of title arrangements aren’t registered, the grain grower’s interests and ability to recover grain payments are put at a significant risk.

In a recent case, a grain broker became insolvent. Grain growers who’d registered their sales arrangements on the Register have recovered the entire debt owing on the crop.  On the other hand, growers who didn’t register their arrangements are only expected to recover about 10 cents in the dollar on what they are owed. 

The bottom line: if you’re selling grain, you need to register your arrangements before delivery, or risk losing your payments.

Wider impact on agribusiness

Beyond grain, these other activities are affected by the PPSA:

  • plant and equipment leases 
  • share farming agreements
  • crop financing arrangements

The application of the PPSA to these types of activities is complex. Farmers should regularly review their operations to ensure that PPSA related risks are adequately addressed.

At Commins Hendriks we have an experienced team of commercial lawyers who are available to help guide you through the requirements of the PPSA. 

If you have any questions, please contact us to book an appointment on 1800 643 779.