Personal Property Securities Act Good For Rural Sector

6 October 1999
PR105/99

PERSONAL PROPERTY SECURITIES ACT GOOD FOR RURAL SECTOR

The passing tonight of the Personal Property Securities Act is good news for all farmers and growers, and will alter the face of the processing industry and commercial practices across New Zealand.

"This Act enables farmers, growers and other suppliers to avoid the type of large financial loss associated with the collapse of Weddel and Fortex meat companies. As such, it remedies a large anomaly in New Zealand's securities law," said Federated Farmers President Alistair Polson.

"Businesses should not underestimate the importance of this Act."

The Act enables suppliers to register a purchase money security interest (PMSI) over supplied material, such as livestock or grain, until paid for.

Mr Polson said the act was a big win for Federated Farmers. "The federation has lobbied very hard to get the Bill in front of parliament and finally passed in law. Federated Farmers has pushed for the past six years to get this law change."

He congratulated the Government for passing the Act in Parliament's final days before the General Election. "This Act will help farmers and suppliers protect themselves in the event of the collapse of a processor. It is a good solution to a difficult problem."

"Minister of Commerce Max Bradford listened to our concerns and persevered on a complex and difficult issue."

Mr Polson said that farmers and growers who registered a PMSI would have a claim over the assets of failed processors, ahead of financial institution's claims.

"Previously, banks could claim farmers' property to cover their own losses when a processing company went under. That immoral situation can now be ended through farmers using PMSI clauses in supply contracts.

"Farmers, and other suppliers of raw material, should take the opportunity provided under this new Act to protect themselves."

ENDS

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