6 September 2012
The surge in the value of the Australian dollar and the increased popularity in shopping online has recently led to some unintended and potentially costly consequences for some farming sector participants. Trent Thorne, a food and agribusiness specialist from law firm McCullough Robertson, discusses some tips and traps.
By way of example, the ABC recently reported that a major supplier and producer of organic farm products was sourcing certain core materials from Chinese suppliers, which unbeknown to the organic supplier, contained elevated levels of benzene and other related chemicals. If these products had made their way into the production system, this may have greatly impacted on the ability of the particular growers to claim that their produce was certified as organic, and this could potentially have exposed the organic supplier to litigation from disgruntled growers.
Also, a group of Condobolin farmers purchased high quality fertilizer from China, however upon receipt of the ‘fertilizer’ it was determined via independent testing to be nothing more than 600 tonnes of contaminated dirt.
One of the potential problems with purchasing products direct from foreign suppliers is that not only are you exposing yourself to potentially fraudulent conduct on the part of unscrupulous overseas based merchants, but you are also potentially depriving yourself of the ability to return the goods and seek repayment of your subsequent losses.
By way of example, if a similar fertiliser product was purchased from a stock and station agent in Australia, and the product did not function as represented, the farmer would be able to make contact with the agent and/or a sales representative from the fertiliser company to arrange for some form of a warranty payment.
Clearly, there are many cost advantages to acquiring products direct from the foreign supplier or over the internet, particularly given the increasing costs of a number of regular farm inputs, and producers would be well advised to seek out the best price that is available to them.
In this regard, the following matters need to be taken into consideration when purchasing items over the internet or from overseas based suppliers:
- always, always trust your instinct. If the price that is being offered seems too good to be true, it more than likely will be
- wherever possible use a secure payment method such as credit card or PayPal. Depending on your credit card, there may be some protection afforded if there is a non-supply of the relevant product. Never use a money transfer or a direct deposit to send payments to people as these are readily open to abuse
- in terms of agricultural products, if a sample of the product can be sent to you before ordering a major consignment, this process should be followed. Until trust can be established between the buyer and the seller, the goods could also be held in escrow pending their testing by an independent third party and payment and delivery made contingent upon the product meeting pre-purchase specifications, and
- if you have any concerns, seek advice from the Office of Fair Trading or a trusted adviser.