Five civil claims against Rural Livestock and a Serious Fraud Office investigation into a former employee of the Christchurch firm have prompted Federated Farmers to call for livestock agents to be licensed in a similar manner to their counterparts in the real estate industry.
And there is early support from Agriculture Minister Damien O’Connor who wants to see more details.
Federated Farmers meat and fibre chairman Miles Anderson said the lobby raised the idea four or five years ago with Ministry for Primary Industries officials as well as the stock and station industry itself following a livestock fraud case involving agents in the central North Island.
Those discussions came to a dead end but claims against Rural Livestock revealed earlier this month by Farmers Weekly and the accounts of several farmers who have since contacted Anderson with similar stories convinced him there are still problems in the industry that needed fixing.
“Quite often it is sums that are not large enough to break people … fifteen or twenty thousand dollars or more that they do not feel are big enough sums to warrant forensic accounting and all the costs that are involved in trying to recover the money and so they just had to take it on the chin.”
While Anderson believes “99%” of agents are both honest and competent more is needed to weed out those who are not.
“We are talking about huge sums of money that are dealt with by the stock and station industry every year and there is no regulation.”
Parliament in 2008 passed the Real Estate Agents Act which established a disciplinary tribunal with the power to suspend agents guilty of unsatisfactory conduct and in the worst cases strike them off completely.
It can also award compensation of up to $100,000 to those whose complaints against agents are upheld.
Anderson said while the real estate industry is one possible model any regulation will need to be tailored specifically for livestock agents.
“Once this first case is finished we want to canvass our members for examples of what has happened to them.
“We can take those examples and fold them into a code of conduct so they cover a whole lot of different scenarios.”
Likely to come in for early attention is the purchase of livestock by agents on their own account.
“A lot of ill feeling is caused when an agent buys from a farmer when it’s not clear he is acting on his own behalf … then on-sells at a substantial profit.”
Anderson said full disclosure rather than a ban could be a more effective way of dealing with any conflicts of interest.
“Then when the farmer makes a decision it is based on all the information they are given about that particular transaction and the person they are transacting with.”
While he is convinced the vast majority of agents act with integrity O’Connor said the cases making their way through the courts suggest regulation is still needed.
“It is the rogue that we often have to regulate or legislate for and it seems like it might be necessary in this case.”
O’Connor said the spread of the cattle disease Mycoplasma bovis has also alerted officials to a failure by some agents to properly record livestock movements.
That only underlined to him the entire system of livestock trading needs to be looked at.
National Party primary industries spokesman Nathan Guy said the Government must guard against knee-jerk responses.
“A code may end up being something that is needed in the future but I would be very mindful of the costs and any bureaucracy that is created as a result.”
Stock and Station Agents’ Association chairman Steve Morrison said he is not in a position to comment but plans to discuss the matter with Federated Farmers later this month.
