The industry has been under pressure to respond since it emerged earlier this year that South Island agency Rural Livestock is facing court action from five farmer clients of a previous employee who is also under investigation by the SFO following a complaint from the firm.
Federated Farmers in May called for rules governing the practice of stock agents with an independent body to adjudicate on disputes with farmers.
Since then it has been working with the New Zealand Stock and Station Agents Association on a code of practice and a system for hearing complaints against livestock agents.
The association has now adopted a code of practice and will form a four-person discipline and professional conduct board to hear complaints.
The disciplinary board will be chaired by Canterbury agent and association board member Ed Marfell and will have two more association representatives and a fourth, independent member.
Adjudication will be by three-quarters majority and decisions and penalties imposed on agents found in breach of the code of conduct will be made public at the board’s discretion.
It will not have the power to kick an agent out of the industry or impose fines.
“In the case of a breach the Discipline and Professional Conduct Board shall agree a penalty consistent with both the gravity of the breach and previous penalties for similar breaches from the options provided in the NZSSA rules.”
Association chairman Steve Morrison said the measures were unanimously approved by the association’s members, who make the bulk of livestock transactions across the country.
Members included major players PGG Wrightson, NZ Farmers Livestock (formerly Allied Farmers), Carrfields and Rural Livestock.
Asked whether the penalties amount to a slap with a wet bus ticket if there is no provision to kick agents out of the industry altogether Morrison disagreed.
“If we see something that we are unhappy with we will make it clear to our member and be looking for them to address it.
“If we see no response then there is the opportunity to look at how that member has operated and whether they are fit to be a member of the association.”
Federated Farmers meat and fibre section chairman Miles Anderson in May said the real estate industry was one model that could be considered for livestock agents.
Under the Real Estate Agent Act passed by Parliament in 2008 agents can be fined up to $100,000 and have their registration to practice torn up.
However, Anderson estimated such a formal approach would cost several million dollars with the costs likely to be recouped from farmers through higher commissions and other charges.
He is happy with the code of practice and disciplinary process agreed on by the association even though it will not cover agents who are not members.
“A number of agents that I have talked to have thought that having something like this would be appropriate.
“I do not think there is going to be a lot of resistance because the reputational risk of not being part of this is going to be quite high.”
If the new regime proves ineffective there is the option of lobbying the Government to legislate for licensing of livestock agents and stronger penalties.
“The idea is that we have not discounted regulation but we see that as a last resort because it takes a long time and it can be costly and the costs are going to fall back on the farmer anyway.”
