THE Victorian Farmers Federation (VFF) Grains Group is calling on grain traders to transition to shorter payment terms – ultimately same-day settlements – as farmers recover from recent grain trader collapses.
The push for quicker payments follows the collapse of Lempriere Grain, which went into administration last month, and the demise of a number of other substantial traders in the past 12 months.
“Grain traders need to transition to two-day payment terms across all contracts in the near future and, within two years, we want to see same-day payments standard practice across the industry,” VFF Grains Group president, Ashley Fraser, said.
“To help drive this change, I encourage all growers to ask for two-day payment terms when discussing potential grain sales.
“The current system allows for 30 to 60-day terms of payment, which places an unfair portion of the credit risk on growers.
“New information sharing platforms ensure accurate grain delivery data can be processed in real time, and there are already major buyers taking advantage of this technology and offering two-day payment terms.”
Mr Fraser said the collapse of grain traders had a devastating impact on growers.
“To start rebuilding grower confidence, the industry needs shorter payment terms on all types of contracts,” he said.
“There will be farmers who have a good relationship with smaller buyers who may wish to commercially negotiate longer terms. But these need to be well informed decisions made on a case-by-case basis, not the industry standard.”