As a statutory body, the APAC has to operate within the parameters of the Act and cannot simply make changes at will. This legislation, which is unique in the world of agriculture, ensures that the APAC is there to protect the financial interests of farmers who sell their agricultural products through a market agent, export agent or livestock agent. In the case of market agents, APAC has several measures in place to ensure that financial discrepancies can be identified early on.
A market agent must report weekly to a farmer on the stock sold and still on hand. They must pay farmers for produce sold within five business days of completion of the sale, not the consignment. All monies from the sale of a farmer’s produce must be paid into a trust account. Only payments to the farmer and authorised deductions can be made. Market agencies have to submit monthly trust account reconciliations to the APAC every month. These are checked for any deviations from permitted practices. The council also conducts ad hoc stock audits on a market agency floor.
All market agencies contribute annually to the maintenance of a fidelity fund administered by the APAC. This provides funds in case a farmer claims for an unlawful act by an agent or in case an agency has insufficient funds in the trust account to pay a farmer. It is a form of ‘insurance policy’ that is unknown elsewhere in the world.
Selling on credit
Strict guidelines are in place if an agent wishes to sell a farmer’s produce on credit to a specific buyer:
- The agent must get the written permission of the farmer;
- The farmer carries the risk if payment is not made;
- Payment must still be within five days;
- The farmer cannot already be covered by the fidelity fund;
- The sales report must distinguish between a cash sale and a credit sale.
- SA fresh produce farmers have the best financial protection in the world. Let’s not mess it up!