The Australian Competition and Consumer Commission is alerting growers to the need to update the way they do business to ensure they receive the protection offered by the Horticulture Code.

Growers who have existing written contracts with a merchant that were signed before 15 December 2006 are not covered by the code.

If, however, those contracts have been varied in any way since that date, they must be replaced with a valid Horticulture Produce Agreement, the ACCC says.

"Horticulture Produce Agreements are designed to give both growers and merchants greater certainty in their dealings with each other," ACCC chairman Graeme Samuel said.

"Agreements covered by the code must specify important conditions such as when growers are to be paid and when produce can be rejected – all of which provide growers with greater protections.

"Contracts that fall outside the code may not spell out the same level of detail which means they may not offer the same level of protection in the event of a dispute."

Before harvesting this season, growers should have in place a written contract with their merchant.

To comply with the Horticulture Code the grower and merchant must decide when they will agree on price.

Agreeing on price can be either before delivery (on farm) or upon delivery (at the merchants premises) allowing reasonable time for inspection of the produce.

In either case the price agreed must be in writing.

The ACC says code compliant agreements will also include details of how any rejection of the produce will be handled.

It will detail when a grower will be advised of a rejection of produce and provide for confirmation of the reasons for rejection by an independent party.

Should a dispute arise, the Horticulture Code provides an effective low cost dispute resolution procedure.

Horticulture Produce Agreements also include the payment terms, delivery requirements, reporting information and insurance details to improve the clarity of the commercial arrangement between the grower and merchant.

Mr Samuel said the code was currently under review, but that it would continue to apply while that review was underway.

"Rumours that the code no longer applies are incorrect. The ACCC will continue to enforce the current code and will not hesitate to take action where blatant breaches occur," Mr Samuel said.