Stock & Station Agents' Handbook

STOCK & STATION

AGENTS’ HANDBOOK

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STOCK & STATION AGENTS’ HANDBOOK Ken Emms Stock and Station Agent Alan Squires Insurance Consultant

Butterworth-Heinemann Australia

I995

Australia Butterworth-Heinemann, 18 Salmon Street, Port Melbourne, 3207 Singapore Butterworth-Heinemann Asia United Kingdom Butterworth-Heinemann Ltd, Oxford USA Butterworth-Heineman, Newton National Library of Australia Cataloguing-in-Publication entry Emms, Ken. Stock & station agents’ handbook. Includes index. ISBN 0 7506 8927 7 (pbk.).

1. Stock and station agents-Australia. 2. LivestockAustralia-Marketing. 3. Real estate business-Australia. I. Squires, Alan. 11. Title. 333.330994 0 Butterworth-Heinemann Australia 1995

Published by Reed International Books Australia. Under the Copyright Act 1968 (Cth), no part of this publication may be reproduced by any process, electronic or otherwise, without the specific written permission of the copyright owner. Enquiries should be addressed to the publisher. Typeset by DOCUPRO, Sydney Printed in Australia by Southwood Press Pty Limited

CONTENTS vii ix xi

Foreword Acknowledgements Glossary of terms PART I-STOCK

& STATION AGENCY

Introduction 1 Market Value 2 Wool Activities 3 Sale of Rural Land 4 Livestock Auctions 5 Contracts and Agreements 6 Merchandising 7 Rural Finance, Stock and Property Mortgages, Liens and Agency Credit Control 8 Controls over Land Development and Landuse 9 Professional and Statutory Bodies PART II-INSURANCE

1 3 7 12 25 44 71 82 97 114

AGENCY

Introduction 10 History of Insurance 11 Insurance and Superannuation Commission 12 Insurance (Agents and Brokers) Act 1984 13 Insurance Contracts Act 1984 14 Insurance and The Trade Practices Act 15 Insurance Company Operations 16 Reinsurance 17 Operating an Insurance Agency 18 Rural Insurance Needs 19 Specific Policy Benefits and Claims Index

119 121 123 125 128 132 134 136 138 142 145 155

V

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FOREWORD

The preparation of this handbook is long overdue and the amount of research undertaken during its writing is appreciated. The role of a stock and station agent practising on the far north coast is considerably different to one, say in the central west of the state but to their credit, the authors have addressed areas which in my opinion, form a common content to many stock and station practices operating within the State of New South Wales. It is acknowledged that many books have been written on the subject of real estate in general, including the selling of businesses and the managing of strata schemes but the value of this unique handbook as both a text for students and as a general reference for practising agents is beyond question. It is with sound confidence, therefore, that I recommend this book, in the belief that through its use, students, stock and station agents and the industry will find professional value.

R H JONES EXECUTIVE DIRECTOR STOCK AND STATION AGENTS ASSOCIATION OF NEW SOUTH WALES

vii

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ACKNOWLEDGEMENTS

We wish to express our appreciation to the following for their support and assistance in the preparation of this book. Acknowledgements is made of their valuable contribution in permitting certain excellent items of their material being used. Australian Council of Livestock Agents; Australian Institute of Valuers and Land Economists (Inc); Australian Meat and Livestock Corporation; Australian Pork Corporation; Australian Red Poll Society; Australian Society of Real Estate Agents & Valuers Ltd; AGSAFEi; Australian Wool Corporation; Bureau of Rural Resources; Cattlemen’s Union; Commonwealth Scientific & Industrial Research Organisation; Computer Assisted Livestock Marketing Services; Dairy Farmers Association; Wesfarmers Dalgety; Elders Limited; Merck Sharp & Dohme (Australia) Pty Ltd; National Livestock Marketing Service; New England Tablelands Noxious Plants County Council; NSW Department of Agriculture & Fisheries; NSW Department of Consumer Affairs; NSW Department of Planning; NSW Farmers Association; NSW Meat Industry Authority; NSW Police Academy; P & K Carrier; Porters for Property; Real Estate Employers’ Federation of NSW, Real Estate Institute of NSW, Real Estate Services Council; TAFE (OTEN-Real Estate & Valuation) Soil Conservation Service of NSW; Stock & Station Agents Association of NSW

ix

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GLOSSARY OF TERMS

Whilst it is beyond the scope of this book to provide an exhaustive list of terms used in the agricultural, pastoral and insurance industries, the following glossary to terms is provided as a general reference to stock and station and insurance agents.

absorption adsorption aerial sowing aged horse aged sheep agistment agitation agricultural chemical agroforestry algae all one mark alluvial anticoagulant apron arable atropine (atropine sulphate) AUSCANE AUSPIG average

The movement of a chemical into plants, animals (including humans) and micro organisms. The process where chemicals are held or bound to a surface by physical or chemical attraction. Clay and organic soils tend to adsorb pesticides. The process of applying pasture seed to the surface of an existing pasture. A horse over seven years of age. (Note: the age of a horse is calculated from 1 August commencing from the year of birth). Sheep past their most economic period, generally five years of age or older. Stock placed on another person’s property in return for the payment of an agreed fee. Process of stirring or mixing (chemicals) in a sprayer. A pesticide, growth regulator or adjuvant. A combination of agriculture and forestry on the same general area. Relatively simple plants that contain chlorophyll and are photosynthetic; controlled by an algicide. Sheep that have been marked with the same earmark and are of the same age and condition. Describes material deposited by flowing water. A chemical which prevents normal blood clotting. The active constituent in some rodenticides. The large fold of a merino ram carried in front of the stock. Areas of land that can be cultivated and sown to crop or pastures. An antidote used to treat organophosphate and carbamate poisoning. A CSIRO computer software system designed to predict sugar cane yields according to climate, soil, variety and cultural variables. A CSIRO computer software system designed to increase efficiency and profitability. A claims penalty for underinsuring certain property. xi

xii STOCK & STATION AGENTS’ HANDBOOK

avicide awn backfatter baconer bale ballyhaldy band application banged barrow basal application beast area bell wether binders or binding fibres biological control blood-horse boar board bobby calf body bold botanical pesticide boxed branding

breach break

A chemical used to kill or repel birds. The stiff bristle at the top of the grain sheath of barley, oats, barley, wheat and many grasses. A pig which is too fat to be used for bacon or whilst at bacon weight, is considered very fat. A pig in prime condition with moderate fat covering weighing heavier than a porker. 1. A parcel of wool packaged in a wool pack. 2. Hay which has been securely tied or rolled to be used for stock fodder. Whitefaced cattle such as herefords or hereford cross. Application of a farm chemical or other material in or beside a crop row rather than over an entire field. Description of the last 5 cm (two inches) of a tail of cattle which has been cut square with a knife to give a straight edge as a means of identification. A castrated male pig. Application (of chemicals) to plant stems or trunks at or just above the ground line. A unit of measurement used when determining the stock carrying capacity of rural property. A wether sheep used to lead sheep into yards. Commonly used on larger properties. Fibres which hold the wool staple together enabling the fleece to be handled Control of pests using predators, parasites and diseasecausing organisms. May be naturally occurring or introduced. A horse of thoroughbred breed. A male pig which has not been castrated. The floor of the shearing shed where the sheep are shorn. A calf taken from its mother and hand reared. Wool when staples are full and bulky. Wool which is well grown and of character. A product produced from naturally occurring chemicals in plants. Examples are nicotine, pyrethrum and rotenone. When different mobs (or flocks) of sheep are mixed. 1. Stencilling on bales of wool to identify the owner, type and number of bales. 2. The applying of registered brands to sheep with branding fluid and to cattle with hot branding irons for the purpose of identification. The failure by the insured to follow a condition of the insurance contract. A distinct weakness in one part of the wool staple caused

GLOSSARY OF TERMS xiii

brindle

broad broadcast application broad-spectrum (farm chemical) broken broken mouth broker brood mare brumby bulky bullock bulls burry butt calflcalves canary stain capped carbo types carcinogen carding carrying capacity

carryover lamb

during growth by sickness, sudden change of pasture or the want of food and water. A colour of some cattle having a reddish body with darker reddish stripes. Caused through crossing a pure breed with a milking cow strain, eg, Herefordjersey cross. Wool which is on the strong side of its micron or type. The uniform application of a pesticide or other material application over an entire paddock or area. A product that is effective against a wide range of pests or diseases. A trade term applied to the best wool of the skirtings having the characteristics of fleece wool. A sheep whose incisor teeth have fallen out or are badly worn and irregular. Usually caused through old age or bad grazing. A person who arranges insurance on behalf of a client. A female horse used for breeding. A wild native-bred horse. Well nourished wool of substance, length and density. A full grown castrated ox over the age of four years with three or more permanent teeth. Castrated and non-castrated male cattle of any age showing bullish characteristics. Wool containing a certain amount of seed or burr. A parcel of greasy wool in a recognised wool pack weighing less than 100 kg. Male or female cattle less than six months of age. A bright yellow stain in the fleece which is not removed in the normal scouring process. Wool bales from which the cap has been removed to facilitate the inspection on a show room floor. Very burry wool, usually short from which vegetable fruit cannot be economically removed. A substance or agent able to induce malignant tumours (cancer). A teasing process which breaks down the clumps of wool fibres into an even film. Maximum number of individual animals that can survive the greatest period of stress in a normal rainfall year on a given land area. It does not refer to sustained production. See also ‘dry sheep equivalent (DSE) and ‘beast area’. A lamb which has been weaned, shorn and fattened for sale in autumn.

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STOCK & STATION AGENTS’ HANDBOOK

cast castrate cast for age character

chemigation chopper classer classing

cleanskin cock horns co-insurance colluvial colt comeback compatible compensation complementary enterprise conservation farming

A sheep lying on its side or back unable to regain its footing. Removal of the testes of an animal. Old sheep that are classified as rejects under a particular set of conditions due to their being past their prime for wool or lamb production. 1. A quality in wool indicating an even pronounced crimp and a clear out staple formation. 2. Strongly marked and distinctive quality of sheep breed and type. The application of fertilisers or pesticides to soil or plants by inclusion in irrigation water. Pigs in heavy but not overfat condition which are not suitable for curing. A person who prepares the wool clip for market, grading the wool into even lines according to type, micron and yield. 1. Wool classing is the preparation of the clip for market by grading it into micron and yield potential. 2. Sheep classing is the process of culling and selection applied to flock sheep. 3. A term applied to rams graded according to their sale value. 4. The division of a flock of ewes into various groups prior to joining. An unbranded beast. The horns of a beast sticking straight up. A claims penalty for underinsuring certain property. A term which is used more commonly than average. Describes material transported largely by gravity from hill slopes. A young male horse less than four years old. A breed of merino throwback sheep. Chemicals are compatible if they can be mixed without reducing the effectiveness of any individual chemical. The legal liability imposed on someone to pay for another’s loss or damage. Where two or more forms of livestock production are run on a property (usually sheep and cattle enterprises); and where total utilisation and output of the property is greater than when either enterprise was run singularly. An economic system of farming which involves using land in accordance with its capability and suitability and managing land in accordance with the principles of conservation. Such a system would include contour farming, conservation tillage, crop and pasture rotation, judicious stocking management, pasture improvement, strip cropping and soil/water conservation works and practices

GLOSSARY OF TERMS xv

contact herbicide contact insecticide contract cost-price squeeze cover cover crop or companion crop cows crackers crash grazing crimp crop rotation

crutching crutchings culling culls cultivar custom feeding dags dam dead wool

where appropriate. The aim is to farm in such a way as to conserve soil, water and energy resources, while ensuring continued farm productivity and economic viability. A chemical that kills primarily by contact with plant tissue with little or no translocation. A compound that causes death or injury to insects upon contact. It does not need to be ingested to be toxic to the insect. A legally binding agreement between parties setting out terms and conditions of the insurance. Situation when total costs increase at a greater rate than returns. An arrangement to protect property or risk by an insurance policy. When a crop is sown together with a pasture to boost feed or grain yields in the first year and increase pasture survival over summer. When sown too heavily, it can become a ‘smother’ crop. Female cattle about thirty months of age or older with three or more permanent teeth. 1. Aged cows in poor condition. 2. Broken mouthed sheep which are usually ewes or wethers in poor condition. A practice whereby large numbers of stock are placed in a paddock for a short period to remove surplus growth quickly. The natural wave formation in wool. The closer the crimp, the finer the wool. The practice of alternating, normally on an annual basis, field crops, such as corn or wheat, with legumes in order to maintain or improve the structure and productivity of the soil. The act of shearing the wool away from the breech and hind legs. The wool taken from the sheep by crutching. The process of discarding lower grade or inferior sheep from the flock. Animals rejected from the flock or herd. A variety of plant produced by cultivation. Generally a contractual arrangement where beef cattle owners place their stock in a commercial feedlot in exchange for the payment of a service fee. Staples or locks of wool in the breech area heavily coated with dung. The natural mother of an animal. Inferior grade of wool collected in the paddock from sheep that have been dead for a considerable time.

xvi STOCK & STATION AGENTS’ HANDBOOK

deciduous defoliant dehorned dense/density dermal toxicity devil’s grip

dew lap dieback dip dipping disclosure dispensable soil draw card

drench

drift-lambing dry cow dry ewe dry farming

Plants which lose their leaves during a certain part of the year, usually winter. A chemical which initiates the premature drop of leaves. A beast that has the horns removed to prevent injury to other stock. Removal is effected by an implement when the beast is fully grown. Used to denote compactness in a fleece: the close proximity of fibre growth on a given surface of skin. The ability of a chemical to cause injury to a human or animal when absorbed through the skin. A serious defect in conformation appearing as a depression immediately behind the withers and associated with a short yolk stained wool. The condition sometimes extends down behind and around the girth of the sheep. 1. The upper fold under the neck of a merino sheep. 2. The loose skin under the neck towards the brisket in cattle. Death of all or part of the crown of a tree. It is generally caused either by insects or fungus. Complete or partial immersion of a plant, animal or object in a farm chemical preparation. The function of dipping a sheep in a solution shortly after shearing to prevent the spread of louse and ked (sheep tick). Information which a party to an insurance contract needs to advise in order to get cover. A soil which readily disperses into its constituent particles (clay, silt, sand) in water. A term to describe a line of livestock which represents a significant attraction to buyers and is used in advertising a livestock sale to gain the attendance of buyers. Such buyers may then also be attracted to other lines being offered. A stock medicine which is forcefully administered orally to an animal by means of a drenching gun. A term sometimes used to describe the pouring over and saturation of an animal with a stock chemical. The daily or twice-daily removal of an unlambed portion from a mob or flock of lambing ewes by use of a series of small adjacent paddocks. A cow that is not rearing a calf and is without milk. A ewe that is not rearing a lamb and is without milk. Usually considered to be all phases of land used under semi-arid conditions. Apart from bringing water by irrigation, other methods are used to conserve moisture such as allowing moisture to accumulate one season for use during the next.

GLOSSARY OF TERMS mii

dryland salinity dry mare dry matter dry sheep equivalent

duplex soils excess expert fallow

farm chemical farrowing far side fat scores feedlot feed quality filly flock ewe flock ram fly strike foam retardant fodder fodder crops

Areas of land affected by salt, generally associated with the removal of trees from the landscape. A mare that is not in foal. The remaining plant material following the oven drying removal of moisture from a sample. A unit of a system used to compare the feed requirements of different classes of sheep. The standard dry sheep equivalent (DSE) is the amount of feed required to maintain a 45 kg fleece-free adult dry sheep for twelve months (see also carrying capacity and beast area). A geological term used where top soil changes sharply in texture compared with the immediate sub-soils, Example; loam overlaying clay. The amount which an insured has to contribute to a claim. A person who attends to the grinding of combs and cutters, repairing hand pieces and shearing machinery, whilst shearing operations are in progress. 1. A sow which is not pregnant. 2. A species of deer. 3. A period of about twelve months during which ground is left uncropped and free of weeds to allow for an increase in moisture levels. A pesticide, growth regulator or promoter, or veterinary product. A sow giving birth. The right-hand side of a horse. Liveweight graded estimates of animal carcasses to establish the general condition of the animal. The assessment is made in conjunction with muscle scores. Generally a commercial enterprise where beef cattle are bought and held for concentrated high energy grain and fodder fattening. Nutritional value of plant material. A young female horse less than four years old. A ewe that is not a stud animal but is retained for wool growing and lamb raising. A pure bred ram of not such a high standard as a stud ram retained for mating with flock ewes. The condition produced by the development of blowfly maggots living on the sheep. An adjuvant used to reduce the foaming of a spray mixture due to agitation. Dried feed such as straw and hay suitable for storage. (see forage). Plants seasonally sown exclusively to be used for livestock feed during that season (see forage crops).

xviii STOCK & STATION AGENTS’ HANDBOOK

fog treatment forage forage crops frosty face galloway gavel gelding germination gestation get gilt glazing good agricultural land

grain rent grazing capacity

GRAZPLAN

gross margins

groundwater growth regulator gummy

The application of a chemical as a fine mist or fog. Dried feed for horses and cattle (see fodder). Seasonal crops specifically grown for livestock feed (see fodder crops). A defect mainly occumng in merino sheep which consists of chalky harsh white hairs covering the face. A horse of a small breed which stands about fourteen to fifteen hands high. Also a breed of beef cattle. A wooden mallet used by an auctioneer or chairman of a meeting to call the meeting to order. A castrated male horse. The sprouting of a seed or the production of a germ tube (mycelium) from a fungus spore. The period from conception to birth in a female parent. The offspring or progeny of a ram, usually applied to those produced in one season. Sows which have not farrowed. A term also used for unmated sows. A situation where the place in which a seed is injected becomes hardened and glazed over preventing the absorption of water. Land which, because of its soil, climate, topography and location is highly suitable for a form of regular agricultural production but which may have limitations to production requiring significant inputs andor restrictions to achieve and maintain long-term productivity, soil fertility and soil stability. The payment of rent in the form of grain or other crops for the right to farm certain land. It is more commonly known as sharecropping. Maximum stocking rate possible which grazing land can support in the long term without deterioration. A CSIRO computer software package designed to assist farmers in making long term decisions about grazing or mixed cropping. Included in the package are programmes such as GRASSGRO, GRAZFEED and LAMBALIVE. The difference between the gross income earned by an enterprise and the variable or direct costs (eg, drenching costs for sheep) incurred in achieving that income. Gross margin analysis is a useful aid in comparing the relative profitability of the various enterprises which may comprise a farm situation and identify any necessary short term adjustments or changes. Water located beneath the soil surface from which bore water is obtained or surface springs are formed. A chemical which alters the growth processes of a plant or animal. An aged sheep that has lost its incisor teeth.

GLOSSARY OF TERMS xix

haemotoxin hand hard pan

harrowing

header heavy cowlsteer hectare heifer herbicide HGP hobby farming hocky hogget homestead husbandry hybrid vigour hydrolysis improved pasture indemnity in lamb insolvency intensive farming intermediary

A substance or agent able to cause blood disorders. A unit of measure used in the measurement of the height of horses. (one hand equals 10 cm or 4 inches). A hardened, compact and/or cemented soil horizon in or below the soil profile. The hardness is caused by cementation of soil particles with organic matter or with materials such as silica, sesquioxides, or calcium carbonate. The process of breaking heavy clods of soil, removing weeds and levelling ploughed land using scarifying machinery. Plant material cut or mown in the paddock, allowed to dry and then baled and stored as available fodder. Harvesting machine that cuts off ripe ends or heads of grain. A beast with good conformation, big boned and in good condition. The metric measurement for an area of land measuring 10 000 square metres (approximately 2.47 acres). Female beast over one year old which has not calved. After calving, it becomes a cow. A farm chemical used to kill or inhibit plant growth. Hormone growth promotant. The occupation of farm land for the provision of peace and perquisites rather than profits. A sheep that has its hocks inclined inwards. A young sheep of either sex about nine to ten months old until its two front teeth arrive. The main or principal residence including out-buildings of the owner or occupier situated on a large pastoral (or agricultural) property. Farming. The superiority in performance of progeny over the average performance of two parents of different breeds. Breakdown of a chemical in the presence of water. Fertilised pasture often consisting of improved plant species. The making good of a loss by one party to another under an insurance contract. Description of a ewe that is pregnant. A position reached when liabilities exceed assets and a person has insufficient funds to continue trading. The use of comparatively large amounts of labour and working capital per hectare of land, generally implying maximum productivity. A person who arranges insurances on behalf of an insured with an insurance company.

xx STOCK & STATION AGENTS’ HANDBOOK

introduced pastures

ISC jetting lactation lamb lamb marking lamb marking percentage land degradation layoff

liability light cowhteer line breeding litigation liveweight auction locks

long tail lumphumpy jaw lungdonge

maiden maiden ewe

Includes all sown pasture species which have been introduced by humans. Insurance and Superannuation Commission. A means of combating fly strike through the forcing of a water based solution into the fleece and skin around the fly strike area. The period of time from the birth when the female parent commences to produce milk to the time when such natural milk production ceases. A sheep up to the age of about twelve months The act of ear marking, tail docking and castrating lambs. The number of lambs alive when the marking operation is carried out, usually expressed as a percentage of the number of ewes joined. The decline in quality of natural land resources, caused through improper use of the land by humans. The term used when an insurer shares the risk with another insurer. The movement of a substance through soil with water. A sheep that appears to have legs longer than sheep of that breed. A period during which a paddock is left without crops or pasture to allow for soil improvement and the return of nitrogen levels. A financial obligation imposed upon an individual A small framed beast in light condition. Breeding from the same blood line or within the dam family but not from close relations. The process of law in determining right or wrong, or in determining compensation. The selling of livestock by public auction on a ‘per kilogram basis. Second cuts and small portions of wool from the lower leg, crutch etc which are to be found on the shearing board and under the wool table after the sheep have been shorn. A lamb or sheep that has not had its tail marked (docked). Large swelling of the jaw of a beast affected by actinomycosis or grass seed abscess. 1. A long rope with which a horse breaker holds a horse whilst he/she makes it canter in a circle. 2. A circular exercise ground used for training horses. 3. The act of exercising a horse on the end of a rope around a circle. A mare that has never been in foal. A ewe that has not given birth to a lamb prior to the current lambing season.

GLOSSARY OF TERMS xxi

marbling

mare market value metabolite

micro-organism misrepresentation mortality mouthing mulesing

native pasture natural service near-side negative cash flow negligence nematodes neurotoxin nonpersistent pesticide nonselective pesticide nutrient fixation oestrus

Relates to the fat that is deposited between muscle fibres particularly in those of the loin. It becomes readily apparent in cattle that have the genetic ability to produce it when they are fed high energy rations in feedlots. A female horse older than four years. The cost to replace an item less due allowance for wear and tear or depreciation due to age. A compound derived from changes in the active constituent through chemical, biological or physical reactions. The metabolite may be simpler or more complex and may or may not be more poisonous than the original chemical. An organism that is so small it cannot be seen without a microscope. The failure to disclose relevant information to an insurer. A term for death of livestock. To determine the age of an animal, depending on the number of permanent teeth, particularly horses and sheep. The removal of a crescent shaped piece of skin either side of the crutch of the sheep. On healing, this leads to a stretching of the skin and eliminates folds and reduces the risk of fly strike. Pasture that is native to an area and naturally grown without any human intervention. It is usually of poor quality and lacks nutrition. The ability of a bull to mount a cow for breeding purposes. The left-hand side of a horse from which it should be mounted. When total costs exceed returns. An act or error of judgement which may lead to financial loss or damages by another party. Worm-like animals that live as saprophytes or parasites. Many cause diseases of plants or animals; controlled by a nematicide. A substance or agent able to cause disorders of the nervous system. A chemical which does not remain active in the environment more than during one growing season. A chemical which is toxic to a wide range of plants or animals without regard to species. For example, a nonselective herbicide can kill or damage all plants it contacts. Occurs in some soils when excess acidity and alkalinity renders essential nutrients unavailable to plants for satisfactory growth. The period of time when a female animal is attractive to

d i STOCK & STATION AGENTS’ HANDBOOK

off-side open auction organophosphates

overgrown overhead irrigation over-stocking parcel parrot mouth pasture pathogen pelt perennial permanent pasture persistent chemical

pesticide PH phalaris staggers pheromone piece picker pieces pink eye

and willing to mate with the male animal of the same species. The female is commonly referred to as being ‘on heat’. The right-hand side of a horse. The selling of livestock by public auction on a ‘per head’ basis. A large group of pesticides and animal dewormers which contain the element phosphorus. Most are nonpersistent insecticides, miticides and nematices. Many are highly toxic. Examples: maldison, parathion, diazinon, trichlorfon. A description applied to wool which is more than twelve months growth. Sprinkler irrigation installed with tall rises permitting water to be delivered above the crop. Frequently installed in orchards, groves and vineyards. A long-term concept relating to stocking rate which can lead to a change in the botanical composition of pastures. A piece of land, regardless of size, in one ownership. A beast with a narrow bottom jaw overlapped by the top jaw. The main food source for grazing livestock. A disease causing organism. A sheep skin with little wool on it. A plant that lives for more than two years. Ongoing pasture which is available all the year around. A farm chemical (or its metabolites) that remains active in the environment for more than one growing season. Some compounds can accumulate in animal and plant tissues or remain in soil for years. Examples: DDT, chlordane, dieldrin, persistent herbicides. A chemical or other agent used to kill or otherwise control pests, or to protect from a pest. A measure of the acidity or alkalinity of a soil or liquid. Soil pH levels generally fall between 5.5 and 8.0 with most plants growing best in this range. A condition demonstrated by livestock that have succumbed to the poison contained in phalaris. A substance emitted by an animal to influence the behaviour of other animals of the same species. Some are synthetically produced for use in insect traps. A person who evens up and classes skirtings etc in a shed, picks over the broken wool and grades it accordingly. Skirting from a fleece of wool which is inferior to ‘broken’ but not containing necks, bellies, stains or locks. An eye disease which affects cattle. Noticeable tears running from the eye leave a distinct mark on the face.

GLOSSARY OF TERMS xxiii

piscicide POddY polled/poley Pony porker precipitate pre-plant pesticide presser proposal

PTIC pulse crops raddle rainshadow effect ram contact ram harness RANGEPACK

reduced tillage rehabilitation of land reinstatement reinsurance residual pesticide remuneration replacement value re-vegetation

A chemical used to control pest fish. A lamb or calf taken from its mother and hand reared Sheep and cattle without horns. A small horse up to fourteen hands. A pig in prime condition but weighing less than a baconer. A solid substance that forms in a liquid and settles to the bottom of a container. A material that no longer remains in suspension. A pesticide applied prior to planting a crop. A person who presses wool into bales by means of a wool press to facilitate handling at market. A form which details information necessary to issue an insurance policy. Pregnancy tested in calf. Those crops containing edible seeds of leguminous plants such as beans, peas and lentils. A piece of chalk of various colours used to mark sheep, usually on the head. Occurs in small pockets which receive substantially less rainfall than adjacent areas. This is usually due to hills being in lee shelter or rain-bearing winds. The ability of a syndicate of rams to mix with the whole mob of ewes to which they are to be mated. Device containing a crayon which is mounted on the ram’s brisket so that when a ewe is served, a mark is left on her rump. A CSIRO computer software programme designed to assist in arid zone pastoral management. It presently covers the management of cattle, sheep, buffalo and goats through recommendations and predictions. Grazing of crop stubble and weed growth after harvest followed by seedbed preparation with fewer tillage operations than for a conventional operation. Treatment of degraded or disturbed land to achieve a level of capability and stability at least equal to that which existed prior to degradation or disturbance. To rebuild or repair property to as new condition. The sharing of risks by insurers. A pesticide that continues to remain effective on a treated surface or area for an extended period following application. A fee or income earned for services or advice given. An amount determined sufficient to replace or repair damaged property with new materials. The re-establishment of plant cover on an area of ground that is depleted or devoid of vegetation.

xxiv STOCK & STATION AGENTS’ HANDBOOK

rhizobia rig ringed ringing roach back rodenticide rolling roomy ewes rotation rouseabout runt scarifying scrubbers scrub bull second cross set stocking shanking shive

SHRUBKILL silage

SIRAGECROP

Nitrogen fixing bacteria which causes nodules to grow on the roots of leguminous plants. A male sheep with one testicle, the result of improper castration. Description of the last 5 cm (2 inches) of a tail of cattle which has had the outer hair cut square but the centre tail hair left to hang down through the cut area. The removal of a circle of wool around the sheath or foreskin of a ram or wether, usually undertaken during crutching. A rise in the back line of a sheep, usually towards the loin. A chemical used to control rodents. The process of dragging a heavy implement behind a tractor for the purpose of smoothing and compacting the soil. Large framed ewes in good condition. The growing of different cereal crops in regular order to avoid exhausting the soil. A shed hand employed to pick up the fleece after it has been shorn and to keep the board clean. An undeveloped pig or one which has been born small. The process of breaking up and loosening the top soil without turning it. Cattle which may have been handled for branding, marking etc and of wild disposition. At times refers to badly bred cattle in poor condition. A bull that has been missed in the muster and has not been marked. A bull that was originally bred for beef and not herd stud duty. The offspring resulting from the mating of a true half breed and a distinct breed of sheep. Refers to an area that is continually grazed throughout the year - usually by the same type of stock. Such paddocks are not spelled. The coverings of the lower part of a sheep’s legs. Fine grass seed and vegetable matter found in wool. A CSIRO computer decision support system that advises on the use of fire to control shrubs in semi-arid areas of Eastern Australia. The program has three modules; BURNTIME, BURNWAYS AND BURNEEON. Plant material cut from the paddock and stored in an area devoid of air to allow it to ferment. A CSIRO computer software model which advises on irrigated wheat in the areas of irrigation, scheduling, fertiliser management, disease and weed control and rotation of crop varieties.

GLOSSARY OF TERMS xxv

skirtings slip slurry soil injection

SOILOSS

sound mouth

sown pasture spayed spray deposit spreader springer spring lamb stag

stallion staple steer sticker stocking rate stores store condition straggler

Those portions of wool removed from the fleece whilst on the wool table because of inferior quality and value. A weaned pig which is about two to three months old. A thick suspension of a chemical made from a wettable powder and water. The placement of a pesticide below the surface of the soil. Common application method for fumigants and termiticides. A NSW Soil Conservation Service computer based package which can predict the type and severity of erosion following changes in land and crop management thus allowing for qualified decision making aimed at reducing further soil loss. A sheep whose teeth are still firm and retain their position. The term usually relates to aged sheep. Pastures sown by machinery, usually into a prepared seedbed. Situation where a cow has had its ovaries removed in order that it will fatten more quickly and not breed calves. The amount of chemical that remains on a sprayed surface after the droplets have dried. An adjuvant used to enhance the spread of a chemical over a treated surface thus improving the coverage. A cow which shows obvious signs of being pregnant. A lamb which is suckling its mother and has been fattened sufficiently to make it suitable for slaughter. Often referred to as a ‘sucker’. A male sheep, pig or bull castrated after reaching maturity. A male horse which has not been castrated and is suitable for breeding. A number of wool fibres which naturally form themselves into clusters or locks. A castrated male beast under four years of age showing no bullish characteristics and with three or more permanent teeth. An adjuvant used to improve the adherence of spray droplets to a plant, animal or other treated surface. The number of livestock (usually expressed in DSE dry sheep equivalents) that are run on one hectare. 1. Cattle that are not fat but are in good condition. 2. Pigs that are not in prime condition or heavy enough for market. A description of a sheep that is not fat but in good condition. A sheep that has been missed in a muster or a sheep that is not the property of the holding upon which it is found.

xxvi STOCK & STATION AGENTS’ HANDBOOK

stubble stud sub-flocking subrogation sucker sucker lamb summer annual suspension swampy back sward swath synergism systemic

tar teaser tenant farmer teratogen termiticide tickicide tine tip tipped horns to burn

The cut stalks of cereal plants left standing after harvest. A superior type of bred ewe or ram used for special breeding. The dispersal of a mob of ewes to be mated into smaller sub-groups because of physical and pasture conditions of the paddock which they are grazing. The taking over of another party’s rights to a matter. A pig that is still suckling its mother. A lamb that is still suckling its mother but has grown sufficiently heavy for slaughtering. Plants that germinate in the spring or summer and complete their life cycle in one year. A chemical mixture consisting of fine particles or floating, usually water or oil. Example: wettable powders in water. A depression in the back of a sheep between the shoulder and loin. Pasture suitable for grazing that consists of a variety of legumes and grasses. The width of the area covered by one sweep of an aeroplane, ground sprayer, spreader or duster. The effect of two or more chemicals applied together which is greater than the sum of the individual chemicals applied separately. A chemical that is absorbed and translocated within a plant or animal. A metal or plastic dischtrip with a letter or symbol stamped thereon and placed in the ear of a sheep for individual identification. A chemical preparation used as a dressing on wounds received by sheep during shearing to prevent fly strike. A ram that has been vasectomised and is used to detect oestrus in ewes. A lessee of a farm; the rental is usually in crops or cash, or a combination of both. A substance or agent able to produce abnormalities or defects in living human or animal embryos and foetuses. These defects are not usually inheritable. An insecticide used to control termites. An insecticide used to control ticks. Individual rake-like prongs that are grouped together as an implement and dragged along the top soil to make the furrows for seed planting. The wool from the crest of the poll sheep. Where the tips of the horns of cattle have been removed. Description of the act of branding with a fire brand.

GLOSSARY OF TERMS xmii

underwriter vaccine vealer vector venturi virus weaner wet ewe wet mare wether wigging winter annual winter chilling

withholding period woodlot wool roller wrinkles yearling yolk yolk stain young cattle

The name referred to as an insurer after considering the risk factors. A modified virus used to prevent disease in humans and livestock. Male or female cattle with no permanent teeth, less than twelve months of age and still suckling. An animal (insect, nematode, mite) or plant (parasitic) that can carry and transmit a pathogen from one host to another. Short piece of tubing or funnel used in irrigation systems to measure or increase water flow. Ultramicroscopic parasites composed of proteins. Viruses can only multiply in living tissues and cause many animal and plant diseases. A lamb, pig or calf that has been weaned from its mother. A ewe that is rearing a lamb and is lactating. A mare that is rearing a foal and is lactating. A castrated male sheep, usually for the production of wool. The shearing and removal of wool around the eyes. Plants that germinate in the autumn or winter and complete their life cycle by the following spring. Occurs mainly in winter-early spring when a combination of low temperatures, rain and wind causes hypothermia (heat loss) in stock grazing in exposed areas. Young lambs, goats, deer and off-shears sheep are in greatest risk. The minimum number of days permitted by law between the last application of a farm chemical product and the harvest, slaughter or grazing date. A block of trees planted to provide for future timber requirements; could be combined with shade and shelter needs. A person who assists the wool classer at the wool table. Small folds of skin on the body of the sheep over the breach area. Young cattle and horses from about ten to fifteen months old. A secretion of the glands of the skin of the sheep. A stain caused by the pigment of the yolk, usually yellow. Male or female cattle with no more than two permanent teeth and about twelve to thirty months of age. No bullish characteristics in males. Sexes are described separately as young heifers and young steers.

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PART I-STOCK

AND STATION AGENCY

INTRODUCTION A great many books have been written over the years to assist people undertaking real estate studies with little or no emphasis on the stock and station aspects of property agency. This text is designed for general reference but principally to be of assistance to students wishing to understand more of the issues impacting upon the role and responsibilities of licenced stock and station agents. Care has been taken to ensure that the information contained within this book is not only absolutely factual but follows the syllabus provided for in the National Core Curriculum pertaining to the rural agent/stock and station agent courses conducted throughout this country but with some emphasis on matters peculiar to the State of New South Wales. Ken Emms

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CHAPTER I MARKET VALUE

Market value has been defined as the highest price estimated in terms of money which a property will bring if exposed for sale in the open market allowing a reasonable time to find a purchaser who buys with knowledge of all the uses to which it is adapted and for which it is capable of being used and assumes a willing buyer and willing seller. Many components affecting this value must be considered by the agent when requested to give an opinion or market appraisal, either orally or in writing. Generally, these requests will be forthcoming from current land holders who would make them with a view of becoming potential vendors or from prospective purchasers. COMPARABLE SALES The agent must be aware of prices paid recently for similar properties in surrounding areas or in similar districts so that when requested, the agent can relate to properties already sold and make a ready comparison. To assist the agent in this task of comparing recent sales, the rates clerk of the appropriate shire or municipal council can provide on request, notices of sales or transfer of land where such request is identified as being for valuation purposes. The Local Government Act provides for councils to be supplied with such notices of sale or transfer. In most country areas, the supply of this information is without charge, however, councils are entitled to levee a service fee. From the data supplied, select those properties which seem similar in area, topography or anticipated price range and carry out a thorough comparison between each and the property that you are examining for market value purposes. Such comparison should include such things as structural improvements, whether crops or livestock were given in, the value of any crops or livestock sold with the property and an analysis of the country's mix such as farming, irrigation, grazing, rough or valuable timbered areas and an outline of the topography. Some sales will reveal mostly straight grazing country which ascribes a grazing unit value and some will be shown as mostly arable which ascribes an arable unit value. Caution is warranted when checking the names of the transferor and transferee. In situations where family sales have taken place, for example, L.A. Smith to C.J. Smith or A.B. Jones to Weowna Properties Pty Ltd where both transferor and transferee have the same address, such a transaction would most likely not constitute a sale at market value. In these cases, disregard this information during your assessment. LOCAL KNOWLEDGE When coupled with 'comparable sales', local knowledge of the general terrain, prevalent soil types, production ability and of course, the situation of the property, will provide collective information sufficient for the agent to provide an opinion of market value of the property.

4 STOCK & STATION AGENTS’ HANDBOOK

EARNINGS

Consideration must also be given to the sources of current income derived from the property and the annual income. A comparison of earnings over four or five years should be made to identify any marked differences and an examination of the causes for any increases or decreases should be made and properly assessed by the agent. PROPERTY IMPROVEMENTS

Improvements are undoubtedly a most important factor in the assessment of market value. On many occasions, the property will be valued by summing up each component of capital value. Examples of these components are: land (unimproved); clearing-undertaken and required; pasture improvements-area and type sown; soil conservation programmes implemented; irrigation licences issued; water supply-tanks, dams, bores and wells; fencing (internal and external)-age, condition and construction; and structural improvements. Overcapitalisation is an issue that must be identified by the agent and when detected, an appropriate adjustment must be considered where the property being assessed for its market value is above or below the district or area average in its standard of improvements. An example of overcapitalisation can be found in homesteads where their cost and luxurious appearance can often be out of character with and inconsistent with the value of the property. Another common area where overcapitalisation applies is in stud properties, particularly horse studs where white painted fences are hard to price and can make an appraisal of the market price of the property difficult. MARKET CONSIDERATIONS

For the property on offer to be saleable, it must appeal to one or more of the four groups listed hereunder: 1. local; 2. overseas; 3. intrastate; 4. interstate.

When assessing its appeal, the agent should give careful consideration as to which of the four location groups would contain the most likely prospective buyers if the property was listed for sale. SUBSIDIARY INCOME

Consideration should be given to the aspect of subsidiary income which may be able to be earned or derived from the property such as mineral rights, cut timber, bush rock and the like.

MARKETVALUE 5

OPERATING EXPENDITURE AND PROFITABILITY

A sound appreciation of the total operating expenditure must be maintained by the agent along with a knowledge of the property’s profitability. FURTHER INDUSTRY POTENTIAL

The agent must also consider the issue of potential. In this regard, he or she should examine the possibilities of a new industry which may improve profitability such as the implementation of an irrigation system enabling oil seed or cotton to be grown or the establishment of a holiday retreat for city dwellers. RAINFALL AND WATER SUPPLY

A special note should be made of any existing irrigation licences held as mentioned earlier and an account should be taken of the annual rainfall and total water supply including rivers, creeks, bores, springs, tanks and dams, windmills, troughing and bore drains. CARRYING CAPACITY

When considering the market value of the property, inquiries should be completed to ascertain the actual number of stock or livestock carried, the cost per animal area in dollars and cents and the traditional stock selling history. Any doubt concerning correct stock carrying capacity can be overcome by directing inquiries to the local Rural Lands Protection Board where the property owner lodges his returns. Carrying capacity is expressed in terms of stock unit equivalents, eg dry sheep equivalents (DSE). In addition and if applicable, details concerning the volume of crops recently harvested should also be noted. A prospective purchaser will use this information as a yardstick to measure returns on funds invested. Carrying capacity consequently affects the agent’s opinion of value markedly and the extent of his knowledge in this area will reflect upon his reputation and level of professionalism. PROPERTY PRESENTATION

It is important for the agent to consider the best possible presentation of the property as seasons affect the level of attractiveness to buyers. In this regard, a note should be made on whether the property has been conservatively stocked and well maintained or overstocked and eaten out. DEVELOPMENT POTENTIAL

It may be plausible to consider the possibilities of property subdivision. The property may well be saleable in smaller lots and continue its role in primary production or alternatively, due to its proximity to a provincial town or city be subdivisible and so, useful for other purposes such as hobby farms, industrial, commercial or residential. NSW STATUTORY VALUATIONS

The entire State of New South Wales is valued by the Valuer-General with the exception of a designated ‘unincorporated area’ which is administered by the Western

6 STOCK & STATION AGENTS’ HANDBOOK

Lands Commission. This unincorporated area lies geographically west of the Darling River in the North-Western comer of the State. Previously, the Valuer-General applied an unimproved capital value (UCV) when valuing for rating purposes but today, a land value is applied. This land value basically comprises the value of the unimproved land plus clearing, soil improvement measures and some earthworks not being of a soil conservation nature. Other statutory valuations are carried out for stamp duty purposes and for compulsory resumptions and acquisitions. In 1981, legislation was introduced in the NSW Parliament compelling stock and station agents to include their opinion of the current market value of properties in mandatory Sales Inspection Report Forms. Although there is a disclaimer from responsibility clause printed on these forms, the professional reputation of the agent can be significantly damaged by the expression of written opinions which are based on anything but intelligent appraisal coupled with relevant facts. OTHER VALUATIONS

The usual basis for other valuations to be undertaken of rural properties is for mortgage purposes. In these instances, the value of the property as a going concern is generally assessed so that the ability of the property to service the borrowings as well as providing the operator with a reasonable living and return on total funds invested may be calculated. This ‘going concern’ basis embraces the value of the property (using the components of ‘market value’ earlier discussed), together with the value of all operating plant and machinery, livestock and growing crops. LICENSING LIMITATIONS

Only registered valuers are permitted to receive payment for valuing rural properties. Valuation practice is obviously a separate field of employment to that of stock and statiodrural agency although the two are to some extent interrelated. Because of the continuing and constant involvement by stock and station agents in rural property sales, notwithstanding the NSW State Government legislation earlier discussed compelling agents to give written opinions of value, extreme care and diligence must be exercised when being requested by a land holder to give an opinion of market value.

CHAPTER 2 WOOL ACTIVITIES Issues surrounding the aspects of sheep for meat are included in the chapter dealing with livestock. In this chapter, the issues generally relating to sheep for wool and the wool industry are discussed. THE RESERVE PRICE SCHEME

One of the biggest events impacting upon the wool industry in recent times would be the ending of the Reserve Price Scheme. This, together with increases in wool tax and low wool prices brought about by adverse developments in the wool market and an enormous wool stockpile and industry debt has created a very bleak and troublesome outlook for many of this country’s woolgrowers. It is important to understand the significance of the Reserve Price Scheme as its ending has brought about substantial change to many rural people. Such change has effected not only many rural lifestyles but stock and property values which in turn effects the ruralhock and station agent. The Reserve Price Scheme was established in 1970 by the Commonwealth Government, later giving the Australian Wool Commission (now Corporation) the authority to flexibly operate in the market to provide both woolgrowers and wool users with some protection against the impact of fluctuating prices. The proceeds from wool sales made by woolgrowers were levied to fund the scheme’s operation. This scheme allowed for price falls in the market to be offset by the AWC buying wool at the reserve price and then selling that wool on the market when prices rose. This allowed woolgrowers to survive short term market downturns and to effectively manage their budgets. Part of the scheme developed whereby at the beginning of each season, the AWC in conjunction with the Wool Council of Australia announced the minimum reserve price levels in advance of the selling season (or financial year). A market indicator (or average) figure was set to apply an approximate average value for the entire wool clip. From that average, floor prices were established for the huge numbers of specific wool types forming the wool clip. Valuations of individual sale lots on offer were made at floor price levels by AWC staff at approved public wool auctions and any lot which failed to reach that valuation during bidding would be purchased by the AWC at the floor price valuation. The wool purchased by the AWC was then stored and sold when the market improved thus guaranteeing the woolgrowers a minimum floor price for their wool regardless of the quantity marketed or the market price. The system worked well in the good times and was supported by excellent marketing and industry development. Unfortunately, the industry tried to maintain too high a floor price when the market slumped. This encouraged overproduction, gathering huge stockpiles of wool by the AWC and prevented the market responding quickly to the changed conditions. From the end of 1989, the marketing system then 7

8 STOCK & STATION AGENTS’ HANDBOOK

isolated the woolgrower from the market through adverse pressure and consequent political events in 1990 led to the lowering of the floor price. Continuing political and market pressure resulted in the Reserve Price Scheme being suspended and abolished in 1991. MARKETING QUOTAS

During the period of the wool crisis, the Australian Wool Corporation submitted a business plan to the Government on 1 October 1990 identifying strategies which would be implemented to alleviate the supply and demand imbalance and ensure the viability of the Reserve Price Scheme. Supply control measures included an increase in demand-building activities, an increase in wool tax and marketing quotas to reduce the amount of wool which growers could offer for export sale in 1991/92. A grower’s quota would be a percentage of his previous year’s sales and it would be tradeable. In December of that year, all woolgrowers in Australia were required to register for quota, supplying details of their previous year’s sales. Once a quota was allocated for the coming year, growers could adopt to store above-quota wool or reduce production in line with their quota. Although many thousands of inquiries were dealt with by AWC staff and some 80,000 applications for quota were received and processed, the quota scheme was abandoned before implementation when the Reserve Price Scheme was suspended. FLOCK REDUCTION SCHEME

A Flock Reduction Scheme was introduced to complement the quota scheme enabling growers to reduce their production to their quota entitlement. The objective was to humanely dispose of twenty million sheep in one year. Every opportunity was taken to find a useful outlet for these sheep including their use as food for welfare agencies to distribute to the needy of Australia. Sheep for processing were also offered to meatworks using the computer assisted livestock marketing (CALM) electronic selling system. The scheme was implemented with livestock agents acting as certifying agents and CALM Services supplying a computer-based information processing system with a national network facility. A consulting service provided contract infrastructure design and project management for the scheme. An enormous number of sheep were dispensed with in this way and also by way of disposal in on-farm pits, council pits and knackery works due to various financial incentives being offered. The Australian Meat and Livestock Corporation provided weekly information in the rural press about the sheep in current demand by the meat processing industry. With the end of the Reserve Price Scheme, the Flock Reduction Scheme was discontinued along with the other supply and demand control measures outlined in the AWC business plan. WOOL INDUSTRY BODIES

The significance of wool in our society is obvious and a basic knowledge of the industry’s promotion and regulatory bodies is necessary for a stock and statiodrural agent to acquire an overall understanding of current wool activities in this country.

WOOL ACTIVITIES 9

THE INTERNATIONAL WOOL SECRETARIAT

This body was formed in 1937 to help increase demand for wool. Finance for its operations comes from woolgrowers in Australia, New Zealand, South Africa and Uruguay. The four International Wool Secretariat member countries account for more than 80 per cent of the total volume of wool traded internationally. Their overall objective is met by working with manufacturers and retailers of a wide range of wool products. The secretariat is extremely important to Australia’s wool industry due to the fact that the majority of Australia’s wool is exported. Australia is the major contributor to the IWS budget, the amount being based on the volume of Australian wool entering the world market due to its superior quality. The International Wool Secretariat has thirty-four offices worldwide which offer help and support to wool processors and users. Branch activities range from technical service to fashion forecasting and consumer advertising. The IWS Development Centre is located at Ilkley, West Yorkshire, England. Research and development scientists and technologists study a wide range of issues including environmental impact reduction. The development centre works in close co-operation with wool research laboratories worldwide and with industry. On 1 July 1991, the Australian Wool Corporation became known as the Australian Wool Realisation Commission and two new bodies were created. The three bodies being the Australian Wool Corporation, the Australian Wool Realisation Committee and the Wool Research Development Corporation which are all funded by the Commonwealth wool tax and approved Government borrowings. THE AUSTRALIAN WOOL CORPORATION

The functions of this body are to facilitate and encourage improvements in the efficiency of wool marketing, monitor and help enforce standards of wool quality and develop new opportunities for wool. The Australian Wool Corporation also promotes wool in Australia and overseas and to this end, it provides funds to the International Wool Secretariat and accounts for these funds to woolgrowers by monitoring and analysing the performance of the International Wool Secretariat. Another very important function of the Australian Wool Corporation is the provision of ongoing courses and in-shed training to develop and improve the skills of Australia’s shearers and shedhands. THE AUSTRALIAN WOOL REALISATION COMMISSION

The purpose of this body it to take over the borrowings raised for the former Reserve Price Scheme and repay the debt as well as completing due payments under the Wool Supplementary Payments Scheme It is also required to manage and sell the enormous stockpile of wool bales acquired under the Reserve Price Scheme along with the property and other non-wool assets. Upon repayment of the debt and the disposal of the stockpile, the Australian Wool Realisation Commission will cease operation. THE WOOL RESEARCH AND DEVELOPMENT CORPORATION

This statutory body has been established to plan and implement an effective wool research and development programme. Another of its purposes is to allocate priorities to, and fund wool research projects. It has responsibility for encouraging the application and commercialisation of research results and, in addition, for establishing

10 STOCK 81 STATION AGENTS’ HANDBOOK

direct links and negotiating suitable arrangements for research and development with the International Wool Secretariat. THE AUSTRALIAN WOOL INDUSTRY COUNCIL

This body is funded by the Department of Primary Industry and its members represent almost the entire wool industry from woolgrower to exporter. Its purposes are to co-ordinate wool industry policy in the long and short term; to examine matters affecting the interests of the wool industry; to propose overall strategic directions for the industry as a whole; and to provide a forum within which the various sectoral bodies can discuss matters of overall industry significance. AUSTRALIAN SHEEP BREEDS

The Australian sheep flock is dominated by the Merino which is internationally renowned for its high quality fleece. The consistency and fineness of this wool makes it ideal for fashion garments. The Border Leicester Merino cross is the second largest group of sheep in Australia. These sheep are mainly used to produce prime lambs for the meat market. Other breeds include Corriedale and Polwarth which are used for both meat and wool production. Their wool is coarser than the merino. There are also a large number of sheep which came to Australia from England. These include Border Leicester, Lincoln and Romney Marsh, often referred to as ‘longwools’. They produce long fibres that are broader in diameter and less crimped compared with the Merino. British ‘shortwools’ also have an important role for meat production. The Poll Dorset and Dorset Horn, Southdown and Suffolk are all shortwool breeds. The specialised carpet breeds are Drysdale, Tukidale, Elliottdale and Carpetmaster, however, Australia produces little wool suitable for carpets. SHEARING

Shearing normally takes place once a year. The shearer will attempt to take the fleece off in one piece. The average shearer may shear approximately 120 sheep per day. After the fleece has been shorn, it is thrown onto the rolling table where it is ‘skirted’ (which means that the inferior wool is removed from the rest of the fleece). The wool is then classified by a trained woolclasser according to fineness, colour and clean wool yield. Fleeces of similar quality are grouped together into lines and pressed into bales to await collection and transportation to the wool brokers’ stores. SELLING THE WOOL

Wool brokers conduct regular auction sales and approximately 80 per cent of Australian wool is sold by this method. Wool selling centres are located at Adelaide, Brisbane, Canberra, Fremantle, Geelong, Goulburn, Launceston, Melbourne, Newcastle, Portland and Sydney. Some 3.5 to 4 million bales are presented at auction each year. All purchases of wool must be paid for in full before the wool is removed from the broker’s store. The method of payment is bank cheque, telegraphic transfer or cash. These auctions are a highly specialised method of sale. They are conducted by larger woolbrokers and play a significant role in the nation’s economy.

WOOL ACTIVITIES

II

THE ROLE OF THE STOCK AND STATION AGENT

Smaller stock and station agents influence wool clips to the larger firms (or pastoral companies) in return for rebate commissions. Obviously, this earning ability can be substantial and agents should learn as much as possible about the wool industry so that they can advise their clientele accordingly. It is again emphasised that the need for an agent to display professionalism and to possess a reliable reputation is paramount as these good qualities will dispose woolgrowers toward seeking advice and assistance from the agent.

CHAPTER 3

SALE OF RURAL LAND In this chapter, the issues of listing, advertising, selling and financing as they relate to the subject of rural land sales are discussed. Additionally, some actual listing and selling techniques are included for general information and guidance. Financial return from the sale of rural land represents a large proportion of the income earned by stock and station agents and accordingly, it is necessary, not only from a practical standpoint that a full appreciation be had of the issues but also with a view of satisfying certain legal requirements associated with listing, marketing and sale of rural land. Failure to observe recognised procedure may result in damage to your professional reputation, abandonment or loss of a sale or perhaps unwanted court challenges. LISTING

For those who have been exposed to other disciplines within the real estate field, the word ‘listing’ will immediately be recognised as a collection of relevant information on properties being available for sale and the transfer of this information to a written record. The term also denotes a property so listed. An accurate listing is the basis from which the stock and station agent acts in the sale of the property for the vendor. The collation of extensive and involved pieces of relevant sales information should be written on a sales listing form. This listing form may be simply writing paper ruled up with various sub-headings or a printed worksheet. In agencies where many rural properties are listed, the pre-printed listing forms are an obvious advantage but no matter what type of listing form is used, it is important to remember that the information gathered must be sufficient to enable the agent or the agent’s staff to confidently and competently answer inquiries from prospects. In this respect, it is absolutely essential that all special selling features relating to the property are fully and accurately covered. Full and proper listings of rural properties take considerable time and effort, and sometimes many pages of writing are necessary. The more comprehensive the listing information is, the more valuable it is to the agent in his mission to obtain the highest price for the vendor’s property. There is no set layout for a listing form but it should contain the following:

1. Property name 2. Full name and address of registered owner This registered owner may be a partnership, a company or an individual. If the owner is a company, it is essential that the address of its registered office is shown on the listing form. 3. Particulars of title This includes the name of the shire, parish and portion numbers and in addition, the type of title. Examples of type of title may include: Unrestricted fee simple (Torrens title or old system) 0 Restricted fee simple (requiring ministerial consent) I2

SALE OF RURAL LAND

4.

5.

6.

7.

8.

13

Western lands lease Conditional purchase lease 0 Additional conditional purchase 0 Closer settlement lease Irrigation lease Road permits (these are permits to graze only) Closed roads (a separate title will issue to the proprietor of adjoining land). Note: You must ensure that the name of the person or institution who has physical possession of the title deeds is endorsed on the listing form. Area to be sold List the area to be sold in both hectares and acres and include full particulars of areas under different titles. The number and size of paddocks within the area should also be noted. Situation of property Fully describe the geographical location of the property so that prospective purchasers from outside the district will be able to find the property easily. It is worth remembering that a prospect will not be in a good buying mood if the agent has made arrangements to meet at the property gate and the prospect has had great difficulty in finding hisher way. For practical purposes, describe distances from small or provincial towns, villages or cities so that there can be no mistake regarding the property’s location. It is also necessary to include in this category, the proximity to livestock markets, saleyards, airports, Grain Handling Authority silos, cotton gins etc, along with type of road surfaces and details concerning telephone, mail and school bus services. Improvements A full and concise description of improvements made to fencing (internal and external), stockyards, silos, haysheds, machinery sheds, yards, cottages and homesteads should be made and a special note made of the value of those improvements. It is important to be aware of overcapitalised buildings. The obvious area where this applies is to homesteads where their cost and degree of magnificence may well be inconsistent with the value of the property. Stud properties, particularly horse studs, often reflect overcapitalisation where, for example, white painted fences can confuse the issue of market value. Q p e of country An accurate description must be made of the country upon which the property being offered for sale is located. Contained within that description should be things such as terrain (undulating, hilly, creek flats, level etc) soil types (granite, loam etc) timber types (eucalypt, rough scrub etc) 0 extent and areas of cleared country, grazing areas, cultivation and irrigation areas (if applicable) pasture improvement and fertiliser history Note: ‘Type of country’ description is most important and accordingly, extreme care must be exercised to avoid confusion or any suggestion that the agent may have deliberately misrepresented the facts. Stock carrying capacity This is an area which is critical to both the purchaser and the agent. The prospective purchaser will use this item as a gauge when selecting a property. Questions raised will include issues relating to the cost in money terms of one breeding cow area, one dry cattle area, one breeding ewe area and one dry sheep

14 STOCK & STATION AGENTS’ HANDBOOK

9.

10.

11. 12.

13.

14.

area. If there is any doubt as to the accuracy of the vendor’s figures, the agent should obtain stock numbers for the relevant property from the Rural Lands Protection Board. Any inaccurate statement made by the agent, particularly if the information is advertised, may render that agent liable as it may be interpreted as misrepresentation. In this regard, it is stressed that the prospective purchaser will be seeking reliable information to base an assessment on when examining future returns on funds. Rainfall and water supply A record should be made of the average annual rainfall and the time of the year when the highest falls are recorded. A full description should be made of water supply sources such as rivers, creeks, springs, bores, wells, tanks, dams and of course, irrigation licences held. Notation should be made of windmills, troughing, pumps, bore drains and water sources for domestic and livestock consumption. Terms The availability of vendor finance is a genuine selling feature. If the vendor is prepared to carry the finance, obtain all information concerning the amount, term of the loan, interest rate and method of repayment. In some instances, there may be an existing mortgage which is transferable and details of any such mortgage should be obtained and checked with the mortgagee. Price Always list the property at the gross asking price and advise your vendor of the amount of commission payable. Vendor’s solicitor Make a notation of the name, address and telephone number of the legal firm who will be acting on behalf of your vendor and in addition, the name of the actual individual solicitor handling the matter. Rates, rents and taxes Collate shire and Rural Lands Protection Board rates and any other payments such as rental on Crown land and irrigation licence fees, which are made annually to statutory authorities. Other relevant detail Depending on the type of property, there will be other special information required in accordance with the offering and such information or remarks should be included within this section of the listing form. A further example of appropriate detail to be entered within this section is the matter of conjunctional agents. The names of those agents should be included along with any rebate on offer to those outside agencies involved in the introduction of purchasers.

COMPLETION OF THE LISTING FORM

The listing form is commenced before actually arriving at the property. Such details as the name of the property, the name of the vendor, the address and the telephone number can be recorded along with known matters such as rainfall. The district average in both inches and millimetres should be recorded on the form for obvious reasons. Measure the distance from town and note the condition of the road and the amount of gravel and bitumen encountered during the journey. Upon arrival at the property and during discussion with the owner, avoid volunteering an estimate of the property’s value until you have seen the basic features and examined the buildings, improvements and other matters relevant to the listing data. With the co-operation of the vendor, an assessment can be made of the arable area, the part of that area

SALE OF RURAL LAND I S

which has been farmed and the grazing country fenced and unfenced. You should only state your opinion after completing your inquiries into the market value. By delaying your response, you will demonstrate to the vendor that you have done your homework and even though he/she may not necessarily agree with your assessment, he/she must accept it as a value which can be proved to a prospective buyer. On your initial inspection of the property, notes will be taken of its features but on subsequent inspections, critically examine those that you had considered to be selling features to establish if any have particular problems. The problems are obviously the features that a buyer will immediately identify as a basis for negotiating a lower price. To offset such obstacles or objections, examine the problems and identify an answer. If the problem relates to a topographical feature, such as a large and ominous timbered hill located in the middle of the property, look for the positive aspects and perhaps the following answers may apply: ‘It looks a large area but when calculated from a map, it is only 100 hectares.’ ‘One of the features of the property is the run off of rainwater from the big hill as it fills the dam quickly.’ ‘It’s a great shelter for shorn sheep.’ ‘No problem with fencing timber. There must be 20 years supply on the big hill.’

If the problem is a series of threatening cracks in the brickwork and plaster at the homestead, positive and truthful responses should be made to these objections such as: ‘Most houses in this district have the odd crack or two. The soil seems to move a bit.’ ‘We asked a builder about that some time ago and he indicated that it was essentially a minor problem and fairly easily fixed.’ ‘We had a rough quote of about $loo00 to repair all of the cracks.’ Although you are employed to represent the interests of the vendor as his agent, any answers given in response to an objection raised by a prospect should not be an attempt to mislead a buyer. Accordingly, great care should be taken to provide truthful and qualified answers. Those answers can only be forthcoming after full investigation of the apparent problems and an anticipation of buyer’s questions. It is often the case that if you present an answer to a problem area, further questions may not be asked. When you have completed your listing form, it is essential to check all the information with the vendor and where necessary, make alterations or amendments. It makes sense that an agent should make adjustments to the listing information immediately and not wait and check the information later by telephone as this could damage the agent’s professional reputation in the mind of the vendor. In appropriate circumstances, consideration should be given to obtaining parish and topographic maps and perhaps aerial survey photographs from the Lands Department. Such documents are invaluable to assist the agent and the prospect. When listing larger properties, it may be prudent to prepare maps outlining specific locations including routes to be followed by staff when undertaking inspections with prospects. When the comprehensive listing has been completed, and the agent is familiar with both the property and the prevailing market, he/she should then be competent to discuss with and advise the vendor on sales and marketing strategies. To avoid any unnecessary delay, it is suggested that the agent takes a camera

16 STOCK & STATION AGENTS’ HANDBOOK

with himher at the time that listing information is obtained so that coloured photographs can be taken to assist immediate marketing. An omission to include a camera in the listing pack will require an additional journey to the property for this purpose and will be both time consuming and costly in terms of vehicle usage. SUGGESTIONS TO VENDORS

The old cliche, ‘first impressions are lasting impressions’ certainly applies to property inspections by potential purchasers. During discussions with the vendor, the matter of presenting the property for sale should be fully explored. Presentation of the property does not mean that the gates need to be painted white or new fences need to be erected, however, there are many areas which can be attended to by the vendor which will make inspections pleasing to the eye and comfortable to the prospective purchaser. In this regard, the following suggestions are given as examples of what might be included during those discussions with the vendor:

0

0

0 0

0 0

a 0

a

0

0 0

Perhaps a load or two of gravel and some attention with a grader or blade might make a difference to the driveway. Make sure that the entrance to the property is clearly marked and the property name is legible. A property plan or paddock map should be available to prospective purchasers and the route should be reasonably comfortable to traverse. In this regard, some slashing or grading may be required. Ensure that the gates, particularly along the planned inspection route are hung and latched. ‘Lift and drag’ gates and wire latches do not create good impressions. Strain any loose wires and repair any ‘bad’ sections of fence. The water system must be in good working order. Empty troughs or unreliable bores leave lasting impressions. Remove any carcasses and dispose of crippled livestock. Clean up unattractive elements including old pieces of iron, loose wire, superphosphate bags or old feed troughs which may be scattered throughout the property. Remove any empty drench or chemical containers. If the property rubbish dump is not discreet, perhaps a backhoe or front end loader could be hired for a day to bury the rubbish. Remove any car bodies, derelict machinery or rusted tanks. Slash around the farm buildings, pump sites and the entrance to the property. Ensure that the machinery sheds, workshops, storage sheds, grain storages, haysheds etc are clean and tidy and dispose of any rubbish, spoilt grain or loose hay. The shearing shed should appear ‘ready for action’. Loose wool or skins should not be left lying about. Store the machinery and implements neatly, perhaps in a line in a slashed area. Mow the lawns around the homestead regularly and ensure that is watered regularly. A pleasant ‘oasis’ would impress prospective buyers.

In addition to such advice to the vendor, suggest that during inspections of the property where the vendor takes an active part intransporting prospective purchasers around the property in a four wheel drive or other farm vehicle that it is reasonably clean and comfortable and also that there be an absence of guns and dogs. Advise

SALE OF RURAL LAND

17

that the vehicle should be driven slowly, not only to allow adequate time for the prospect to sight the finer features but to avoid a situation where prospects become panic stricken. Terrified prospective purchasers do not buy properties. As it will be necessary to involve the vendor in conversation with prospective purchasers, unlike situations where an agent is involved in selling residential real estate and the absence of the vendor is sought, warn the vendor that talking about such things as politics, religion, drought, fire, disease, noxious weeds or feral animals unless specifically requested may result in a sale being lost. It may be prudent for an agent to prepare a ‘hand out’ to be given to vendors on issues surrounding those discussed pertaining to proper presentation of a property for sale. Such may overcome any probability that a vendor may become offended and thus damage the valuable relationship between the vendor and the agent. CONJUNCTIONAGREEMENT FORM

This form is prepared in triplicate when a conjunctional agency is entered with another agent to sell the property. The licensee in charge of the listing agency and the co-joined agent should both sign the agreement where the listing agent should retain the original and triplicate copies. The co-joined agent should retain the duplicate copy for his records. It is stressed that the co-joined agent is also bound by the provisions of the Property, Stock and Business Agents Act (formerly the Auctioneers and Agents Act) in that a physical inspection of the property is essential before effecting a sale. The forms are self-explanatory and available from the Real Estate Institute, the Stock and Station Agents Association of New South Wales and some other specialists (eg, the Realprint Company). RURAL SALES INSPECTION REPORT

This form incorporates both a rural sales inspection report and a selling agency agreement. As with the conjunction agreement form, it is self-explanatory but it is designed to give a clear and precise outline of the offering and the rights and responsibilities of both vendor and agent. It is to be completed in triplicate and distributed in accordance with the instructions shown on the form. Section 42AA of the Property, Stock and Business Agents Act provides that the contract of agency must be in writing to enable a stock and station agent to be able to recover commission. In this regard, it is mandatory for the agent to have the rural sales inspection report and selling agency agreement completed before offering any rural property for sale. The agency agreement must contain the prescribed terms set out in the Act and Regulations, to be signed by both principal and agent and a copy of it to be served by the agent on the client within forty-eight hours of it being signed by the principal. The prescribed terms include the length of the agency and details about remuneration or commission. Where there has been a breach of this section, the licensee commits an offence and the principal may recover the commission within a period of six years from the date of the contract. It is essential for stock and station agents to be aware that the Act provides an important exemption to the matter of written contracts of agency but such exemption applies only to agreements that relate exclusively to the sale of livestock.

18 STOCK & STATION AGENTS’ HANDBOOK

ADVERTISING

Immediately after the decision to sell has been made, including the method of sale (auction, tender or private treaty), the agent and his or her principal should discuss and agree upon the amount to be expended on the method of advertising to be utilised. It is imperative that a method of sale be decided prior to discussing an advertising budget. The vendor has requested professional advice, and therefore careful consideration must be given by the agent to either auctioning the property or selling it by tender or private treaty. It is essential that whatever method is chosen, both the vendor and the agent are rewarded with success. In addition to ensuring that the property is realistically priced or a realistic reserve has been set, consideration should be extended to the many facets of the decision making process. In this vein, the following are provided as examples of issues to be considered: Is the principal able to afford advertising, bearing in mind that it is generally very expensive, is he or she prepared to outlay this expense? Is the property subdivisible? Does the property possess some unique or unusual feature which will generate interest and draw competition from a wide area? Does the vendor favour the sale of the property by auction? Is the property particularly well known? Affirmative answers to these questions would clearly indicate that the property should be auctioned.

Are promotional expenses to be kept to a minimum? Is the sale to be kept confidential? Does the principal prefer sale by private treaty? Will this property arouse only local competition?

In instances where answers to the affirmative are given to the last four questions, it would appear obvious that sale by private treaty would be the preferred option. ADVERTISING EXPENDITURE

It is entirely the vendor’s decision as to how much should be expended on advertising. In this regard, to maintain a professional approach, a properly prepared advertising schedule should be prepared by the agent setting out a proposed marketing programme including costs to assist the vendor in making the decision. If you are confident of selling the property, it is particularly important that you request as much advertising funding as necessary to promote the property to its best advantage. This is something that the vendor must appreciate as they are seeking your professional advice on the best method of advertising and ultimately selling their property. As advertising costs change regularly, it is obviously essential that the agent remains aware of any such changes. Should an exclusive private treaty or auction agency be entered between the vendor and the agent concerning the sale of the property, it may be feasible for the agent to agree to contribute funds towards advertising, however, this is entirely the agent’s decision. Generally, an amount representing between 0.5 per cent and 0.85 per cent of the expected gross proceeds of a property to be auctioned should be allowed for in an advertising budget, but as there may be no need for a brochure when advertising a property for sale by private treaty and as newspaper and electronic media advertising

SALE OF RURAL LAND 19

costs will be less, the amount set aside for advertising a property in this way will be lower than for a sale by auction or tender. ADVERTISING MEDIA

If a decision has been made to market the property passively, without a definite and aggressive advertising campaign, private treaty sale is the only method which should be considered. Private Treaty-In addition to the usual window card, a signboard should be prepared and professionally painted by a qualified signwriter. It may be necessary for a number of signboards (or ‘silent salesmen’) to be installed if the property’s boundaries are adjacent to more than one main road. If the property only has local market appeal, limited advertising should be sufficient but if it is considered that interest in the sale of the property could be generated over a much wider area, consideration should be given to the inclusion of advertising in major rural, non-rural country and urban newspapers. The use of coloured and non-coloured brochures should be considered. Although coloured brochures can be a very effective marketing tool, they can be very expensive and accordingly, any decision to implement such a measure within the marketing campaign should be very carefully planned. Radio, television and audio-visual displays are also expensive and unless the property to be sold is substantial, the use of these media is probably not warranted. Tender-Sale by this method is somewhat unusual but it remains an option for the vendor to test the market without having to disclose his real intentions. It is a common method used in the sale of large commercial, retail and industrial premises but it is not common to the average real estate transaction or the sale of rural properties. Again, a signboard will be required to be prepared by a qualified signwriter bearing details on where to apply for the tender documents and the date before which tenders must be lodged. It is essential in most cases for a quality coloured brochure to be printed and distributed, not only to accompany the tender documents, but to be widely distributed to those whose names appear on the agent’s mailing list. Direct marketing (letterboxing) can also be a valuable advertising tool in these instances. Large metropolitan and country newspapers, as well as rural newspapers with a wide circulation, should be considered along with local radio and television as a means of advertising the availability of the property by tender. A more recent concept in advertising is that of video-marketing. This marketing media requires a professional video production, highlighting the principal features of the property which can then be shown to prospective tenderers at the agent’s office. Again, the amount to be spent on advertising is dependent not only on the method of sale but also on the size of the rural holding. Auction-The market appeal of the property will again suggest the trend that the advertising campaign should take. Comprehensive newspaper advertising will probably be essential to promote the auction and accordingly, reach the maximum number of potential buyers. Newspaper advertisements fall into three categories: ‘preliminary’, ‘main’ and ‘reminder’ advertisements. A high quality brochure, often in colour, will be required as a sales aid in many instances. Although an agent has the responsibility to look to achieving financial savings for the vendor where appropriate, it is important that only photographers and printers of good reputation be employed to produce the brochures as a poor quality product will not have the impact that is being sought. It is quite normal for auction sales to require the printing

20 STOCK & STATION AGENTS’ HANDBOOK

of 500 to 1000 brochures and although their cost is not cheap, it is necessary that the agent’s best endeavours should be on display. It is again quite commonplace for some radio advertising to be undertaken in a similar way to private treaty sales where the property sold is quite substantial, but when dealing with the sale of large rural properties, the use of the popular media of television and audio-visual displays, although expensive, should be considered. The advertising and promotion should be planned to produce a result in a controlled marketing environment on a nominated date. Although an auction is not a guarantee of sale, provided the vendor’s price expectations are realistic, experience indicates that the great majority of properties which are promoted by auction sell prior to the nominated date, on the auction day or within a couple of months of the auction date. This is principally due to the aggressive marketing measures undertaken. Auction has some distinct advantages over sale by private treaty: 1. The asking price is not disclosed and therefore, an upper limit is not nominated.

2.

3. 4.

5.

6.

7. 8.

Although it will be necessary to suggest an anticipated price range, buyers will make their own judgements and bid accordingly-often at levels above those suggested. All potential buyers are forced to compete at the one time. Experience indicates that most district record prices are achieved at auction often by neighbours or emotive buyers who are forced to compete with other interested parties. The marketing period is usually more defined and inspections can be timed to occur when the property presents at its best. Most inspections will be conducted within a three or four week time frame prior to the auction, to minimise the disruption to the management of the property. Vendors will know on a definite date whether the property has sold or not. This allows vendors to plan ahead, even for the contingency that the property does not sell at auction. Interested buyers are forced to make a purchasing decision on a defined date. There can be no prolonged negotiations or buyer procrastination. Auctions can attract free media coverage which increases the value of the paid advertising and generates additional buyer inquiry. The marketing programme is totally controlled and orderly.

Although there are many advantages for the vendor with auction, there is also a disadvantage for some buyers and therefore, vendors. Some prospective purchasers will need to arrange finance or a valuation prior to the auction. This can be quite costly with no assurance that they will be the successful bidder on the day of the auction. Generally, if buyers are genuinely enthusiastic about a property being auctioned, they will arrange the finance and will attend the auction. If they have doubts or are looking to purchase at their price, they will wait and, if the property is unsold at auction, make any offers after the auction. The auction method of sale is widely accepted as the quickest and most efficient method available for the transfer of ownership of property. In most instances, when vendors wish to aggressively market their rural property, auction is the recommended method of sale. PRACTICAL PRE-AUCTION STEPS

If the auction is not to be held onsite, then the first step that the agent should take is to hire the hall or premises selected for the conduct of the auction sale. This should be done immediately the auction date has been settled upon. It is essential that the

SALE OF RURAL LAND 21

hall or other premises will accommodate the expected audience comfortably. Sufficient moneys should be allowed in the advertising budget to cover the cost of hall hire, special sign boards and extraneous expenses including such things as postage costs on auction brochures which can be quite expensive. One important factor to remember in the construction of a successful advertising programme is the timing of the advertisements leading up to the anticipated or set date of the auction. If the vendor has instructed the agent to sell by private treaty as soon as possible, it will be necessary for the agent to write up the advertising schedule, have the vendor approve it and then put the programme into operation. Conversely, should the vendor instruct the agent to sell by auction, the primary objective is the setting of the auction sale date. In this regard, several independent factors need to be considered and the following basic points may assist: 1. Consider the issue of when the property will present at its best to attract the widest buyer interest. 2. Consider the appearance of the livestock. Will they present better at a later date? 3. Consider whether the property currently has a cash crop growing which will assist with the proposed sale. 4. Consider any improvement, such as an irrigation system or new fencing, which is nearing fruition, which may attract more prospects. After discussion with the vendor concerning these factors, allow about eight to ten weeks lead time in which to advertise and generally market the property prior to the predetermined auction date. The advertising staff at the newspaper that you have selected to promote the property are usually helpful in the selection of an appropriate day of issue and classification section in which to advertise. The primary and reminder notices need only to contain the bare facts concerning the property, however, the main advertisements must contain all the pertinent selling features noted on the listing form by the agent. If, at about midway through the advertising programme it is evident that inquiries from prospects have not been forthcoming, it is obvious that something is wrong. Then, it is critical that a meeting be held between the agent and the vendor to urgently reassess the advertising schedule and budget. It is quite probable that an adjustment in this area is necessary to remedy the situation. Having all marketing and promotional strategies tied in is paramount in achieving the desired market penetration. Shown below is a simple format, commonly used in the construction of an advertising schedule for the sale of a rural property. Media Used

Preliminary

Cost Each

Main

Cost Each

Remainder

Cost Each

Total

Name

Date

$

Date

$

Date

$

$

cost

In strict accordance with the Property, Stock and Business Agents Act, the agent’s name and address along with all licences held must be included in all advertising undertaken. Although not mandatory, it is highly desirable that the agent’s office and after hours telephone numbers be included, to facilitate response from prospective purchasers. SELLING

During the course of a correctly executed advertising and marketing campaign, prospective buyers should be making contact with the agent requesting brochures

22 STOCK & STATION AGENTS’ HANDBOOK

andor property inspections. It is therefore essential that the agent and hisher staff possess a full and comprehensive knowledge of the property so that any enquiry can be correctly answered. To be entitled to receive commission on the sale of the property, the agent must be the effective cause of the sale by introducing a purchaser who is ready, willing and able to complete the contract for sale. It is the agent’s responsibility during hidher discussions with prospective purchasers to endeavour to establish discreetly, the level of capital possessed by the prospect, how much must be borrowed and his or her ability to repay any such financial borrowings. Professionalism is something that must be reflected in agents who wish to succeed. In this regard, property inspections should be arranged so that the vendor is not inconvenienced. Equally important is the need for the agent to appear well groomed and to have a motor vehicle which is not dirty and poorly presented. Each prospect should be afforded a full inspection even though at times, this may prove somewhat monotonous for the agent. It is worth remembering that the time that the prospective purchaser spends in the agent’s company is very valuable selling time where service and professionalism should be the agent’s watchwords. It is often the case where a great amount of time is spent with a prospect attempting to sell a property without success. It should be remembered that although success was not achieved on that occasion, the prospect may express interest in another listed property of the agents and ultimately become its new owner. Notwithstanding this possibility, if the agent demonstrates professionalism in his association with the prospect, the prospective buyer may one day seek to engage that agent’s services to sell his property and thus be a prospective listing source, or may refer others to the agent. RURAL PROPERTY CONVEYANCING

In another chapter within this book, some mention is made of the various rural land titles such as: 0

0

Torrens (Real Property Act) old system Crown lands leases; conditional purchases, and where the minister’s consent applies.

Each different system requires a different approach to conveyancing as there are many different requisitions on title for rural lands. An experienced solicitor should have a detailed appreciation of the differences. As stock and station agents and solicitors rely on each other for functional subsistence, an agent should not hesitate in seeking the advice of a competent solicitor when being confronted with a complicated or unusual property listing. Bearing in mind that obscure requisitions may later be necessary, the agent can make inquiries in this regard initially and thereby reduce the time taken by the solicitor to complete his inquiries. This also will reflect upon the professionalism of the agent and assist in maintaining the relationship between solicitor and agent. The following overview of the legal steps in the conveyancing of a rural property is considered basic but is provided to assist in understanding the general procedure.

SALE OF RURAL LAND 23

Private Treaty

The contract for sale is prepared by the vendor’s solicitor. The purchaser’s solicitor peruses this contract thoroughly and commences the necessary searches which will include drainage diagram (if applicable), survey certificate, zoning certificate, certificate under section 149 of the Environmental Planning and Assessment Act and sometimes a certificate of compliance. The purchaser will then be requested to sign one copy of the contract and produce the deposit moneys, usually 10 per cent of the purchase price. Meanwhile, the vendor signs another copy of the contract and hands it over to his solicitor. When a mutually agreeable time has been arranged, the two solicitors meet and the solicitor acting for the purchaser hands over the copy of the contract signed by the purchaser, plus the deposit moneys in exchange for the copy of the contract signed by the vendor. The contract is now said to be ‘exchanged’ and both parties are then legally bound by it. The deposit moneys are then dealt with as stipulated by the contract. An alternative to the solicitors physically meeting to exchange contracts is through the use of the mail system or the DX (document exchange). Upon each solicitor receiving the other’s contract, confirmation of such receipt is made to each other whereby each is then aware that exchange has taken place. The solicitor acting for the purchaser continues his inquiries so that clear title is established. It is also necessary for the solicitor to confirm that the land is not adversely affected by covenants or easements or if it is found to be so affected, to determine the extent. The purchaser’s solicitor will also ascertain whether or not the earning capability of the property will be substantially reduced by proposed future public works and if any payments such as rates, rents, or taxes to statutory bodies or authorities are in arrears. A date for settlement is then set. At this meeting, the purchaser’s solicitor hands over the balance of the purchase moneys (usually in the form of a bank cheque) and in return, receives the title deeds. At this point, ‘settlement’ is said to have been completed. The purchaser must pay the required stamp duty to the State Government at the earliest opportunity to avoid the severe penalties applicable to late payments. The payment of stamp duty is essential before the transfer of title can be registered. Deduction of the agent’s commission is done upon receipt of authorisation from the purchaser’s solicitor. Auction

The contract for sale is prepared by the vendor’s solicitor well before the auction sale date. This allows any prospective purchaser’s solicitor to check the contract and to commence necessary preliminary investigations. Subject to any reserve price being met after the fall of the hammer, the successful bidder is deemed to be the purchaser and is required to produce the deposit stipulated in the contract and also sign one copy of the contract. The vendor signs another copy of the contract and the contracts are then exchanged in the auction room or other place where the auction sale was held. The remaining procedure involved is similar to private treaty sales. Tender

A copy of the contract for sale, and an instruction to tenderer letter from the agent, setting out the time and date by which tenders will close are forwarded to all prospective tenderers. They are also sent a request for details of the tenderer’s solicitor, of the tender, and for a cheque as a deposit for 10 per cent of the tender price.

24 STOCK & STATION AGENTS’ HANDBOOK

The vendor is neither under an obligation to sell to the offeror lodging the highest tender or to sell the property at all, should tenders not reach the price sought. Should the vendor decide to accept a submitted conditional or unconditional tender then such acceptance is formally acknowledged and the vendor signs another copy of the contract before exchange takes place. The deposits received from all other tenderers are returned and the conveyancing procedure from this point is similar to sale by private treaty. The time involved in the conveyance of private treaty sales from inception to settlement varies but generally, four to six weeks would be regarded as ‘average’. A wide variation also occurs in the time taken to convey a property sold by auction. In this instance, an average time from exchange to settlement would be six to eight weeks. Uncontrollable and unforeseen delays may occur which can sometimes lengthen these periods. Particularly with an exclusive agency agreement, where the agent decides to contribute moneys toward advertising a rural property, the agent needs to check the financial position of the agency beforehand. If the vendor does not advance the entire advertising budget, the agent could well be out of pocket for some five to six months being the period from the commencement of advertising to settlement of the property. It is obvious that advertising costs will not be an issue where the vendor elects only to enter an open agency agreement as the risk to the agent’s commission is just too great to warrant a large contribution of agency funds towards advertising. RURAL PROPERTY PURCHASING FINANCE

It is vitally important that stock and station agents keep themselves well informed on current interest rates and the availability of loan funds. Tact, understanding, diplomacy and complete confidentiality are among the many qualities that must be demonstrated by an agent when discussing finance with prospects. To ensure that prospects are fully advised on complicated questions surrounding the subject of finance, it is imperative to suggest that an immediate approach be made to an appropriate lending agency or authority to gather specifics. Such a suggestion to the prospect relieves the agent from the risk of making an error which might create damage to his credibility and professional standing. The bulk of these lending institutions have their own lending policy which must be met by applicants unless extra collateral can be supplied. The most common sources of finance for the purchase of rural property are trading banks, insurance and finance companies, vendor finance, solicitors’ trust funds, private sources (such as family funds) and large pastoral houses under certain circumstances. The Commonwealth Development Bank is another source of finance for purchasing and developing. Vendor finance is usually most attractive to prospects and if available, it should be used as a selling feature. From time to time, the stock and station agent may be requested by a prospect to provide an approximate estimate of income for a property. It cannot be too highly stressed that the agent should not offer any answer without the vendor’s express permission and should immediately refer the issue to the vendor who can then decide whether or not to disclose such information.

CHAPTER 4 LIVESTOCK AUCTIONS There are several different types of livestock auction sales in Australia and it is without doubt that one of the principal participants in these sales is the stock and stationhral agent, TYPES OF AUCTION SALES

The following list of auction sale categories represents those which involve the larger percentage of livestock sales:

1. 2. 3. 4. 5. 6.

fat stock auction sales store stock auction sales stud stock auctions horse auctions mixed dispersal (or clearing) sales pig auctions 7. video and computer sales 8. wool auctions.

In this chapter, each of these auction sale categories will be outlined briefly to provide an understanding of general procedures involved. FAT STOCK AUCTION SALES

These auction sales are predominantly held at local sale yards which are usually owned by shire or municipal councils. Councils levy a charge known as a ‘yard due’ which is a charge on stock sold through the yards on a ‘per animal’ basis. In order for agents to be able to conduct sales at the local yards, it is necessary in most centres that the agent belongs to the local association of stock agents. The group of agents involved in these sales usually co-operate in organising the order of sale, the allocation of yard numbers per agent and the allotment of time per yard or pen. This procedure is known as the ‘draw’. Any advertising considered necessary should be undertaken well in advance of the sale, but when considering the time for such advertising, it should not be so far in advance that potential buyers will become indifferent or will overlook the sale date. It is important that some thought is given to the selection of a sale date for fat stock to ensure the best possible chance of success. In addition to fitting in with regular fat stock sales at neighbouring centres, an agent should bear in mind that such sales are conducted on regular market days of the week due mainly to the need to concentrate buyer interest at that selling centre. As these sales provide a regular supply source to those seeking fat stock, buyers are generally aware of the starting time of the auction, day of conduct and types of stock on offer. This in effect reduces 25

26 STOCK 81 STATION AGENTS’ HANDBOOK

the need for huge sums to be spent on publicity and thereby keeps advertising costs to a minimum. AGENT’S PRE-SALE PROCEDURES

1. Ensure auction authority has been obtained. 2. Ensure licences are current. 3. Check the authority o f , and if necessary, join the local stock agent’s association which conducts the yard. 4. Identify time and date for sale and book saleyards accordingly. 5 . Arrange all necessary insurances (worker’s compensation, public risk, sickness and accident) and consider professional indemnity and pluvious cover. 6. Promote the sale through appropriate media where necessary. 7. Canvass clients and advise buyers of suitable special lines being offered. 8. Arrange sufficient yard drafting labour and nightwatchman where necessary. 9. Record details of incoming stock in the Auction Stock Book. 10. Arrange road and rail transport to remove stock from yards following the sale. 11. Contact vendors and carriers to ensure that all stock will arrive inside any set curfew time. AGENT’S SALE DAY PROCEDURES

1. Ensure that terms and conditions of sale are clearly displayed as required including the material parts of sections 45 and 85C of the Property, Stock and Business Agents Act, 1941 (including clause 39(7) of the regulations which relates to payment conditions). 2. Check the regulations of the saleyards in which you are selling. 3. Draft the stock for sale into categories of breed, sex, age and condition. If a large sale, drafting would obviously have been conducted the previous day. 4. Make accurate and legible entries in the auction sales book. It may be feasible to write up two copies to lessen the possibility of mistake. 5. Ensure that ‘carding up’ has been completed (clear and precise descriptions written on cards and displayed in each pen). 6. Conduct the auction in accordance with any saleyard plan. 7. Check the auction sales books at the conclusion of the sale with purchasers and physically deliver their lots to them or their agent. 8. Ensure that a permit officer is present to issue travelling stock documentation as necessary. 9. Check to ensure that there are not any unaccounted stock remaining in the yards. 10. Promptly process buyer’s invoices and account to vendors.

Note: On 1 November, 1994, the Property Stock and Business Agents Regulations were amended to prescribe additional auction conditions for sale by auction of livestock. The amendment to the regulations provides for payment by close of business the day following the auction sale of livestock unless an agreement to the contrary is made prior to the auction. Such an amendment enables agents to give whatever credit that they want to buyers of livestock, but the credit arrangement must be in writing. The aim of the amendment is to strengthen protection for producers against defaulting buyers by encouraging prompt payment for livestock sold at auction. Agents should ensure that an appropriate adjustment is made to

LIVESTOCK AUCTIONS 27

include a reference to this amendment in their displayed conditions of sale. (As in (1.) above). SUB-AGENCY AGREEMENTS

If an outside agent has consigned stock to the selling agent for sale on behalf of a client, the selling agent must be in possession of a rebate sub-agency form signed by both agents. This agreement sets out the names of the parties, the percentage rebate commission and termination of agency clause. STORE STOCK AUCTION SALES

These sales are held either in the saleyards or on a large breeder’s property. As these sales are of an irregular nature, booking the saleyards, if such is to be the venue, is the agent’dauctioneer’s first task. As these sales can be conducted on behalf of many vendors, the issue of advertising costs must be examined. If there are in fact a number of vendors involved, an advertising schedule which would need the approval of a single vendor is obviously impractical. The agendauctioneer should draw up an advertising schedule and advertising budget appropriate to the sale, using current rates for all advertising media, and should advise each vendor of the approximate cost per head, depending upon actual receivals when each are booking in their stock. Depending on the quality and number of stock to be offered, the advertising will need to be fairly extensive, and expenditure will need to relate to the number and quality of the offering. Newspapers, simple hand bills (dodgers) and radio are the most common forms of advertising used, however, some consideration should be given to television advertising to promote the sale when circumstances warrant the expense. When promoting the sale through the press, preliminary advertisements should be used to claim the date and outline the highlights of the offering. Obviously, main advertisements will be essential to feature particular outstanding lines on offer. As with all newspaper advertisements, accurate descriptions must be shown along with the agent’s business name and address. Advertisements must be read by prospects who are in a position to fatten the stock. As a consequence, the agent should be in a position to know thoroughly which areas may have benefited from recent rains. Personal telephone contact will need to be made with previous buyers to promote a successful store stock sale and sufficient time and effort should be expended by the agent in the exercise of this task. Stock lists should be prepared and made available for posting or for distribution at earlier sales. When quoting on stock to be offered, it is important to distribute details of the stock as soon as possible, particularly to buyers who are known to be seeking the lines on offer. This information can be obtained through agent’s observations at previous sales as well as who the losing bidders were and the strongest buyers. A considerable number of leads in this regard can be obtained through reading of local newspapers and newspapers from areas known to be enjoying good seasons. If the sale is an annual event, a check with sales records applicable to previous sales should be made to ascertain where the majority of buyers came from. An examination of the usual mailing list should then be made to ensure that these past buyers are included on that list whereby they can receive advertising dodgers. The remainder of the procedures are similar to those of fat stock auction sales.

28 STOCK & STATION AGENTS’ HANDBOOK

STUD STOCK AUCTION SALES

A specialised and important field within the livestock agency industry is advertising and selling stud stock. An inexperienced agent should not attempt to conduct such sales or advise in such matters unless assisted by a fully experienced and competent employee or conjunctional agent. In the absence of such assistance, an agent can obtain expert advice from experienced people in the district or from certain Government Departments. A stock and station agent needs to consider an ‘advertising conjunctional agency’ in undertaking to sell stud stock by auction as such sales are extremely expensive and very time consuming. As an indication of the advertising costs involved in these instances, it is quite commonplace for $10,000 to $15,000 to be spent on promoting a large stud stock auction and with quality catalogues costing about $3 to $4 each, the enormity of outlay demands that the agent knows exactly how and where to advertise. Naturally, the vendor or vendors must be consulted at length prior to the advertising schedule being drawn up to permit their understanding and approval. An agent involved in stud stock auction sales should be familiar not only with the various breeds of sheep and cattle available in his district but should also know the characteristics, advantages and disadvantages of each breed. In addition, a competent agent should be familiar with the registered ear-marks used by his clients and as far as possible, be aware of age marks which are employed also. Such an agent should possess a working knowledge of the regulations relating to ear-tagging of stud stock. Details of these regulations can be obtained from Rural Lands Protection Boards, clerks of local courts, Department of Agriculture offices and police stations in remote areas. The remainder of applicable procedures are similar to those employed in store stock auction sales. HORSE AUCTION SALES

As with the previous category. horse auction sales are a very specialised field and agents not fully experienced in this field should appoint an experienced conjunctional agent to assist. Horse auction sales can be divided into two distinct categories: Special breed sales

These include thoroughbred, quarter horse, standard bred, Appaloosa, Percheron and others of distinct breeds. Horses which fit into this category should be advertised and sold in a similar manner to stud stock auction sales. General horse sales

These include ‘dogged which are horses sold to knackeries, station hacks and general purpose riding horses. The advertising employed for these sales should be undertaken in a similar way to store stock auction sales.

In both these categories, the remaining sale procedures are similar to those employed in store stock auction sales. MIXED DISPERSAL (OR CLEARING) SALES

Clearing sales usually occur when a rural property has been sold and the outgoing owner wishes to dispense with goods and/or livestock he no longer requires. They are usually conducted on the property and many types of goods, chattels and livestock

LIVESTOCK AUCTIONS 29

may be offered at the same sale. Written authority must be obtained from the vendor prior to the auction. An inspection of the offering should take place well before the auction date to allow the agent to gather a thorough knowledge of any special items such as motor vehicles or farm machinery. The agent will need to make an accurate inventory of all goods and/or stock to be offered. Any reserve prices must be written into the auction sales book adjacent to details of relevant lots. During the inspection by the agent, some appreciation will be made on the size of the area required to physically display and sell the offering. At larger clearance sales it has become quite common to register buyers prior to the commencement of the sale on the day of the auction and to issue them with a buying number in exchange for their name and address subject to proof of identification. This speeds up the conduct of the auction considerably due to the booking clerk being only required to record the number called out by the successful bidder instead of recording the full name and address. The procedure also assists in maintaining an element of security. These auctions cannot be conducted without adequate and capable staff. Minimum requirements would include an auctioneer, a booking clerk, a runner (or messenger) to take booking sheets from the booking clerk to the cashier to be accounted, a cashier and accountant who should be located in a makeshift office to afford some measure of security for the cash collected on the day of the auction and a security officer who should be located at the property gate to prevent theft. Special attention should be given to advertising for clearance sales which should commence about one month prior to the auction date. The rest of the procedures are similar to store stock auction sales. PIG AUCTION SALES

There are many centres throughout the State where pigs are sold at auction. They are conducted in a similar manner to fat stock sales for sheep, cattle and horses and are a very important revenue earner for stock and station agents. It is interesting to note that pigs are not considered at law to be livestock. They fall into the category of chattels. VIDEO AND COMPUTER AUCTION SALES

These types of sales are relatively new but have had a fair degree of impact on the industry particularly with regard to cattle sales. The most prominent computer auction sale would be the CALM method. CALM (computer aided livestock marketing) is an electronic saleyard auction for buying and selling cattle, sheep, lambs and pigs on the basis of an objective description on a computerised link-up, while the stock remain on the property or feedlot. The system is designed to operate with an authorised agent arranging for certain stock to be assessed. A professional assessor then takes into account age, weight, fat depth, muscle and other relevant details and that information is displayed to registered buyers on a computer screen, rather than in a saleyard from where bids are transmitted to a central point. The Australian Council of Livestock Agents (ACLA) have conducted intensive investigation into the various computerised selling systems currently available. The council has selected a system known as livestock electronic auction by description (LEAD) as the most promising one yet devised. Experiments were undertaken with computer and electronic selling at Homebush in Sydney where LEAD was found to be an unqualified success. This particular computerised selling system has now

30 STOCK & STATION AGENTS’ HANDBOOK

become the largest method of sale of pigs in the Commonwealth and it seems likely that the system will be extended to cover sales of sheep and cattle. Video sales provide buyers with an actual sighting of the livestock being considered for purchase instead of just a description and as with computer auction sales, their method of selling is unique. There has been quite an apparent downturn in the popularity of video auctions since their inception. One reason has been given that buyers have not always been entirely satisfied that the livestock presented for sale are in the condition depicted on film and may have been filmed earlier during a more favourable season. Another reason for the move away from video selling has been the enormous cost involved to the vendor. In this regard, it must be appreciated that the wages for the entire film and production crews must be met in addition to other miscellaneous costs. In recent times, livestock selling has moved to include direct selling through Skychannel. Although somewhat expensive, it provides a better and more popular form of livestock selling than the video sale earlier described. Skychannel livestock sales require the reservation of a room in a licensed club, hotel or racecourse etc where this television facility is available. Bidding is then made by telephone to the principal selling agent at the auction centre. These auction types are entirely different to traditional auction sales and agents can look forward to further changes in livestock selling as technology advances. WOOL AUCTION SALES

These auction sales are conducted by larger woolbrokers and play a significant role in Australia’s economy. They are a very specialised form of sale and smaller stock and station agents play a very important role in the process of influencing woolgrowers to deal with particular pastoral companies. This role of the agent represents the payment of large rebate commissions from these companies which in turn provides a significant portion of the agency income. Some aspects surrounding wool auction sales are included in the chapter of this book dealing with wool activities. STORE STOCK PRIVATE SALES

Stock and station agents are often called upon to list, show, purchase and deliver store stock at a private sale. It is absolutely paramount that whether it is cattle or sheep, a thorough and exact description of the line of stock is obtained. In the past there have been many occasions where sales have been seriously effected and the agent’s reputation damaged through incorrect descriptions being made of the stock on offer. In this regard, agents should take care when completing contracts for the sale of livestock to explain all the details to the buyer. An incorrect description may result in financial loss to the agent. When listing livestock, the following basic listing points should be covered by the agent: Sheep 0

situation number breed (be explicit) sex age (in months & year of production)

Cattle 0 0 0 0

situation number breed (be explicit) sex age (be accurate)

LIVESTOCK AUCTIONS 3 I

shearing (actual date) bloodline (grade of siring ram) micron pregnancy status marks mulsed (whether large small or too tightly) condition (light store, prime etc) quality (well bred etc known blood lines) loading number (to 40 foot deck) price

pregnancy status (€TIC) brand weight live blood growth condition (light, store etc) quality markings (colour etc) loading number (to 40 foot deck) price

When dealing with price, many options come to mind such as liveweight basis (LWB), asking, firm, cows and calvedewes and lambs (where the cow or ewe is sold at a price and the calf or lamb is included but not sold separately), 100 per cent basis (rejection or not), over hooks (dead weight), price delivered, live export and delivery to a feedlot where the payment of freight becomes an issue. It is essential that the agent explores this area so that there can be no misunderstanding during the course of the sale and that appropriate action can be taken to accommodate the needs of all concerned. Obviously, professional agents should always make it a practice to inspect stock in circumstances where they intend to quote and sell. To become involved without having inspected the stock leaves the agent quite vulnerable to embarrassment should questions concerning the stock be asked later by potential buyers. In addition to the basic listing points shown above, any additional information relating to the stock should be recorded to add to your overall description which can only reflect professionalism in your reputation as an agent. As an example of that additional information, the following is provided as a general guide: Sheep

live weight health (feet) dipped (when) drenched (what/when) rejection(number/percentage) burr seed dust wool length cut last shearing flock micron rejection (lambs generally = 10 per cent) payment delivery period grade of rams used tops of their drop classes proven breeders availability of wool information

Cattle 0 0

a 0 0 0

a 0

hormone growth promotant drenched (whatlwhen) grade of bulls used muscle (score/grade) horn status classed proven breeders delivery period burr

When involved in private sales, selling agents should undertake the following:

32 STOCK & STATION AGENTS’ HANDBOOK

1. Introduce all parties. It is important to note that most sales are conducted with conjunctional agents and accordingly they form part of the team. 2. Be aware that the purchaser has been given all details and was aware of freight costs when he took the offer of the stock (exclusive purchasing rights). This allows an appropriate response to the purchaser when he or she complains that freight will be too expensive. 3. Attempt to make the sale on the day of inspection. Selling opportunities diminish when the buyer leaves the place of inspection. 4. In circumstances when the buyer does leave the place of inspection, avoid further delays and maintain telephone contact that day with the buyer in an attempt to finalise the sale. 5 . After corning to an agreement, ensure that the livestock contract (agreement to sell and purchase) is completed and signed by all parties. An example of this contract appears in Chapter 5 Contracts and Agreements. When completing contracts, accuracy is essential in all areas including the description of the stock which should be as comprehensive as possible. Examples of such a description could be: (a) ‘120 Hereford and Angus Hereford (breed of sire used first) cows-autumn and spring 19XX drop. One brand with 121 calves at foot (four sets of twins-or 100% calves June/August drop). Cows depastured with Angus bulls since calving. Cows to be pregnancy tested prior to delivery at vendor’s expense”; or (b) ‘1100 Merino ewes June/July 19XX drop. One mark. Elegabra blood to be shorn prior to delivery approximately 28.2.XX, depastured 2.5 per cent Border Leicester rams from 1.ll.XX to 1.1.XX. When describing livestock, the terms ‘joined’, ‘station mated’ and ‘unjoined’ (indicating that a pregnancy test has provided a result) should be avoided where no such test has been conducted. Alternatively, some indication that the livestock have been ‘depastured’ (with hereford bulls/merino rams) should be used. The age of livestock should be described in terms of their month and year of drop and not by their teeth as it provides a better indication of age to the prospective buyer. DELIVERY

When the selling of livestock has been completed, it remains the responsibility of the selling agent to give delivery (to transfer ownership or handover). A sale is not completed until a delivery is made In these circumstances, the selling agent should ensure: That the vendor is aware of the time and date of delivery; That the transport carrier or drover is aware of the delivery date; That delivery is carried out in accordance with the sale contract; That the count is undertaken personally and not left to the transport carrier; That the count is performed at the location stipulated in the contract where delivery is to be effected; If the purchaser or the purchasing agent is not present at delivery, contact either as soon as practicable after delivery has taken place and advise delivery and count details. If the sale has been negotiated involving a long distance or a ‘lift’ (delayed inspection time, eg, two months), it is essential that the vendor’s agent maintains

LIVESTOCK AUCTIONS 33

regular contact with the vendor to advise on matters relevant to the livestock such as seasonal changes, condition slipping etc. PURCHASlNG AGENTS

Being a purchasing agent is a function regularly undertaken by stock and station agents involved with livestock. In these circumstances, it is important for the agent to remember that the standard terms and conditions of an auction sale require the purchasing agent to give to the auctioneer prior to the commencement of the bidding a copy of a written authority to bid for or on behalf of his principal. In the absence of such a written authority, the purchasing agent will be deemed to be the principal. Purchasing agents should be fully conversant with the terms and conditions of an auction sale because, as agents, they accept the responsibilities of their principals. Freight is an issue that must be worked out by the purchasing agent before an inspection of the livestock is carried out. This is as important as the necessity to be in possession of the correct information relating to the stock being quoted. It is essential that purchasing agents remain aware of the progress of the bidding and are quite clear on the description of the livestock being offered. It is suggested that purchasing agents adopt a common practice of miming the auctioneer as he or she is selling to ensure that an awareness remains in the mind of the purchasing agent of the price that the auctioneer is calling and the bid rises that the auctioneer is accepting. TAKING THE OFFER

This is a term used in livestock selling which means that the first offer to buy at a certain price is made to a particular buyer. If the buyer ‘takes up’ or ‘takes’ the offer, a reasonable time is then allowed for the prospective buyer (or purchasing agent) to inspect the livestock without having to compete with another buyer. When an offer is made and taken up by you as a purchasing agent, it is good business practice to immediately contact the vendor and advise the date and time that you intend to inspect the stock. This allows the vendor to also attend the inspection. It is wise to ensure that the stock are displayed to the mutual advantage of yourself and your vendor in yards, and in this regard, all bad stock should be moved out before the inspection takes place. When undertaking inspections, purchasing agents should: Ensure that the stock are as described. If sheep, check teeth, earmarks, feet, pregnancy status, and wool (for any dermatitis, seed, dust or lice) If cattle, check age, weight, lameness and pregnancy status. In the case of mixed sexes, check the distribution of each sex as percentages are important and buyers must know. If sheep, determine that they are as dropped and not more wethers than ewes. Ask if the vendor knows the percentage of ewedwethers he marked. If weaners or cattle, determine the number of steers and heifers in the mob as steers are generally worth more. Be alert. Don’t just buy for the sake of buying. You have a responsibility to your vendor. Being asked to act as purchasing agent can be a real test and your reputation as a judge of livestock is at stake. Should the time and date set for inspection be impracticable due to such things

34 STOCK 81 STATION AGENTS’ HANDBOOK

as the purchaser not having sold his old stock or not having gained possession of the proposed grazing property following its purchase etc, the agent should seek a lift (delayed time for inspection) or if the stock are too expensive at the quoted price, it may be appropriate to approach the selling agent and request that the offer be made at a lesser price. For the guidance of the reader, a tentative offer might be taken by a purchasing agent. In these cases, there is a general understanding that a period of twenty-four hours is extended to allow for the purchaser to be contacted before the offer expires. Although an agent’s first duty is to his or her principal, any offer, whether it be the first, second or third, should be responded to as quickly as possible to reduce any unnecessary delay (and expense to the vendor). Obviously this is a matter of ethics. Many agents believe that if stock are correctly described and a person takes the offer, there should be no reluctance on the part of the buyer to purchase the stock. JOINT PURCHASING AND SELLING AGENTS

There are occasions where stock and station agents are required to act as both the purchasing agent and the selling agent. This is a circumstance where the agent’s ethical commitment overshadows all else. The agent must ensure that his or her actions are completely unbiased and in this regard, must display a capacity to negotiate a sale which is to the benefit of both the vendor and purchaser. Obviously, a great feeling of satisfaction can be achieved by the agent who successfully negotiates a sale whilst representing both vendor and purchaser. DEL CREDERE AGENTS (AUCTIONEERS)

To act ‘del credere’ is a practice exercised by most stock and station agents in NSW. A del credere agent may be defined as an agent who agrees to pay the principal for goods sold if the third party fails to do so. The del credere agent is only liable when the principal has failed to pay, or pay in full, and by providing such guarantee of payment, the agent is paid a ceiling commission rate of 5 per cent. Where agents do not guarantee payment to their vendors and accordingly, do not act del credere, they may only charge up to 3112 per cent. CODES OF PRACTICE

Codes of practice have been developed by the New South Wales Meat and Livestock Authority for the selling of cattle, bobby calves, sheep and lambs in New South Wales saleyards. The codes of practice provide a detailed set of principles which are designed to be used as a practical and acceptable set of guidelines and which are administered by the authority. Incorporated in the codes of practice are specific responsibilities pertaining to licensees (of the selling facilities), producers, carriers, agents, and buyers. Because of the voluminous nature of the documents, it is practicable only to outline agents’ responsibilities. Agents’ Responsibilities

The licensee or the licensee’s manager of the saleyard must be aware of the agents’ responsibilities whilst operating within the saleyards. Failure of agents to comply with these conditions and responsibilities will not jeopardise the licence of the

LIVESTOCK AUCTIONS 35

saleyard. However, the saleyard manager will have a responsibility to firstly advise the agents of their responsibilities and secondly to advise the following contacts should further problems occur; 1. Stock and Station Agents Association PO Box 358 Paddington NSW 2021 Phone: (02) 380 5999 2. NSW Meat Industry Authority PO Box 430 Chatswood NSW 2067 Phone: (02) 412 3311 GENERAL RESPONSIBILITIES 0

0

0

0

0

0 0

0

0

0

0

Booking in of livestock and arranging transport where applicable. Provision of duty agent and noticeboard information. Any sheep or lambs arriving after the procedural cut-off time be sold at the end of the subject agent’s sale. (Cut-off (or shut-off) time means, for sheep and lambs, wherever practical, one hour prior to the commencement of the agent’s sale.) If the agent concerned has completed hisher sale then (subject to local rules) the sheep should be offered at the end of all agents’ selling. The receival of hisher client’s cattle or sheep and the relevant livestock movement note if required. To refuse to sell pregnant, diseased or visually flystruck and injured animals at the selling centre (this should include cows at the point of calving and ewes at the point of lambing destined for a sale). The determining of a yard density. The yard space required for livestock is that area which freely allows stock movement within the pen in relation to welfare and buyer assessment. The drafting, lotting and penning of clients’ livestock prior to sale. Scourable branding fluids only must be used in the paint branding of sheep and lambs. Paint branding of vendors’ cattle lots where applicable. To encourage the humane and considerate treatment of cattle in their movement throughout the selling centre. The use of electrical prodders must be restricted to the loading area and must be responsible. Cattle musr nor be beaten with polythene pipe or solid waddies (which will be gradually eliminated from saleyards). Flappers are the recommended form of assistance in moving cattle through the selling centre. Canes, nylon cattle wands and drafting flags should be used for directing cattle. To ensure that dogs are muzzled and supervised by their handler at all times whilst in the selling centre and are not used in loading areas or yards. The watering and feeding of clients’ livestock before and after sale where necessary. In order to adhere to the Prevention of Cruelty to Animals Act, 1979, it is the responsibility of the agent to provide or request provision of fresh, potable water for all stock under hisher care that have been off water for more than twenty-four hours. In this regard, the following extract from the legislation is provided:

36 STOCK & STATION AGENTS’ HANDBOOK

Prevention of Cruelty to Animals Act 1979 Section 8 (1)A person in charge of an animal shall not fail to provide the animal with food, drink or shelter, or any of them which in each case, is proper and sufficient.

Where time allows, the presentation of clients’ sheep or cattle by providing an accurate description (where known) giving details of origin, nutrition, breeding etc. The conduct of the selling process and booking of each sale. The collection and distribution of weight dockets. The delivery of cattle following sale; (a) All stock purchased, except cattle sold on a liveweight basis, shall be at the risk and expense of the purchaser upon the fall of the hammer. (b) Cattle sold on liveweight basis shall be at the risk and expense of the purchaser immediately after such cattle have been weighed post-sale. Where such cattle are weighed pre-sale they shall be at the risk and expense of the purchaser upon the fall of the hammer. The clerical process of accounting to; (a) the buyer (b) the vendor (c) local authorities for functional costs. All cattle and calves presented for sale must be tail tagged in accordance with the provisions of the Stock Diseases Act 1923 prior to arrival at the yards. INSPECTION A N D SALE PREPARATION

It is recommended that the agent or hisher representative act on behalf of the producers by taking delivery of stock. They will be responsible for personally inspecting cattle and sheep and transports on arrival at unloading points. HEAVILY PREGNANT COWS AND CALVES, SHEEP AND LAMBS

It is the responsibility of the vendor and hisher agent to ensure that newly born calves (ie, four days to one week old) or newly born lambs (ie, less than one week old) or cows on the point of calving or ewes on the point of lambing are not offered for sale or transport. The sale of such stock must be discouraged at all times. In practice, where this does occasionally occur, these animals should be segregated from their lot on arrival at the selling centre and yarded and sold separately, but may still be sold with the main line. BOBBY CALVES

The minimum acceptable liveweight is 23 kg (or approximately 50 lb). Calves should be fed immediately prior to leaving the property of origin. The umbilical cord at the junction with the skin shall be dry and shrivelled. Cords which are fresh, wet or ‘green’ indicate excessively young calves which should not be presented for sale or transport. Calves which have their cords removed shall be individually inspected. Calves which are dopey, lethargic or obviously immature should not be presented for sale or transport.

LIVESTOCK AUCTIONS 37

Sick or injured calves are not to be presented for sale, transport or slaughter. They should be given appropriate treatment or be promptly and humanely slaughtered. Handling of calves shall be carried out in a manner which will avoid injury or unnecessary suffering. Calves are not to be kicked, beaten, thrown or dumped, or prodded with any sharp instrument. The use of electric goading devices or dogs when handling, driving, drafting, weighing, loading or unloading is not an acceptable practice. Facilities should exist to permit the safe loading and unloading of calves. Holding pens should be constructed to provide floor surfaces that are dry, hard, non-slip and capable of being cleaned and should be under cover. The operation of calf scales and calf pick-up points must be conducted humanely and efficiently. Calves must not remain in yards for more than ten hours without being fed an appropriate liquid feed by the person in possession of the calves at that time. LAMBS BORN IN TRANSIT

In the case where lambs are unexpectedly born in transit, they and their mothers should be segregated on arrival at the centre and dealt with in accordance with other relative provisions of this code. AGENTS AND THE BUYER

It is the responsibility of the agent to ensure that buyers comply with the following principles when they wish to bid for only a proportion of a pen of cattle or calves or pen of sheep or lambs being offered;

0

That they accept the right of the ownedagents not to allow the lot to be split if, in their opinion, it is detrimental to the owner’s interests. That they nominate the number that they require prior to the commencement of the selling of the offering. That they accept a run of the nominated number subsequent to the sale of the total lot being concluded (ie, the buyer may hand-pick their purchase at the owner’s, and or, agent’s discretion). That the remainder of the lot, at the discretion and permission of the owner or his agent, be offered as one line immediately after the sale of the first portion. At the owner’s (or agent’s) discretion, the losing bidder has the right to the remainder of the lot.

VENDOR OPTION

A vendor or hidher agent shall have the option to sell liveweight or open auction provided that he/she nominates which method of sale he/she desires before the sale of hisher lot(s) commence. Any livestock arriving after the procedural cut-off time must be sold open auction unless the late arrival has occurred because of transport breakdown, in which case, providing the cattle have been off feed for three hours, liveweight selling may occur. Overnight cattle

Cattle received on the night prior to the sale must have a shut-off by 10.00 pm at the latest. There is an exemption for cattle travelling long distances (over 200 km). These may be received up to three hours before sale commencement and sold as

38 STOCK & STATION AGENTS’ HANDBOOK

‘overnight cattle’. All overnight cattle must be on water and denied feed. There is an exemption (where needed) on water for bulls in bull pens. Morning cattle

Cattle received after 10.00 pm that are not in the long distance exemption must be identified, either; (a) by branding; or (b) by being separated They must be offered for sale at the conclusion of the overnight cattle unless special exemption is granted by the authority. The latest arrival time for separated morning cattle will be three hours before the commencement of the morning cattle weighing-(unless the individual truck arrival times are monitored, when three hours between arrival time and the actual weighing time is permitted). The commencement of the sale of the morning cattle section must be clearly announced. OWNER’S RISK

The term ‘owner’s risk’ means that while a title to an animal(s) shall be transferred from vendor to purchaser at the normal point of change of ownership, the sale is conditional upon the meat derived from the stock not being condemned at slaughter by authorised meat inspection service staff.

Note: The owner of any cattle immediately prior to slaughtering is 0 deemed to be the owner in the operation of this clause. 0 all buyers of livestock that are subsequently condemned shall be responsible for all slaughter, transport and disposal costs incurred after sale at auction. DISEASES

The following diseases are automatically owner’s risk, providing the full conditions are met: 0 0

0

actinobacillosis (swollen tongue) arthritis buck shot cancer jaundice

0 0 0

0

illegal residue multiple abscesses pyaemia uraemia

The following diseases are compensatible under the Government Stock Diseases Act:

0

anthrax tuberculosis Johne’s disease brucellosis tick fever

Where a beast sold as HGP free is found to have an HGP implant or HGP residue by an AQIS (Australian Quarantine Inspection Service) inspector and that discovery is recorded on a Hormonal Growth Promotant Misdeclaration Report, a $500 penalty per beast (payable to the abattoir) applies.

LIVESTOCK AUCTIONS

39

CONDEMNATION CERTlFICATES

Information on condemnation must be transmitted to the producer or hisher agent within seven days of the sale on paper (ie, telex, fax, or mail, amving within seven days of sale). Telephone advice is insufficient. A clear description of the reason for condemnation must be given. The tail tag number should be placed on the certificate by the inspector. In the event of a carcass failing a urine test for antibiotic residue, the agent or owner is to be immediately informed on paper that the carcass is provisionally under the owner’s risk agreement. If the subsequent laboratory test confirms the provisional advice and this is conveyed to the owner or agent on paper within ten days, owner’s risk will apply. The type of disease causing condemnation must be documented. (where possible, the carcass should be weighed on scales otherwise a senior member of the abattoir staff is required to estimate the weight and place it on the condemnation certificate). If the carcass was condemned for illegal residue, then the type and level of residue must be stated. The condemnation certificate and information must be dated and signed. PARTIAL CONDEMNATIONS

Partial condemnations are not permitted. Only those carcasses which are completely condemned for a specific disease or residue will be at owner’s risk. TRANSPORT

Claims on costs of transporting from saleyards to works or for any losses en route are not permitted. COSTS

Costs on condemned carcasses are not permitted to be passed back to producers. Interstate ante-mortem inspection condemnations do not qualify for owner’s risk. The producers, processors and agents who were a party to the formulation of this code all made it clear that success of this agreement will only continue if all parties ‘play by the rules’. TAIL TAGGING OF CAlTLE

Tail tagging of cattle for sale is controlled by the Stock Diseases Act 1923. The Act provides that all cattle of or above the age of three months which are to be sold or sent for slaughter or sale must be properly identified. The legislation dictates that unless specifically exempted, all cattle must carry a tail tag bearing the owner’s particulars of registration before leaving the farm. To fully appreciate the importance of tail tagging, some understanding of the reason behind the legislation is provided. Identification of cattle for sale in saleyards or on properties by tail tagging became compulsory due to the demands of importing countries for more stringent health standards for cattle being slaughtered for the export beef trade. The two diseases for which authorities had the greatest concern were brucellosis (contagious abortion) and tuberculosis.

40 STOCK & STATION AGENTS’ HANDBOOK

Following the implementation of an eradication and control programme in the coastal areas of the State, it became evident that wholesale cattle testing throughout the remainder of the State would not be feasible owing to a shortage of veterinarians to do the testing. Testing to this point indicated that an expansion of the programme in its current form would also not be viable due to the anticipated low incidence of tuberculosis identified in the areas where testing had taken place. An alternative testing and eradication scheme was then devised, based on disease detection at point of slaughter, relating this back to the property of origin and instituting control measures on infected properties until achieving eradication. There was some difficulty experienced in finding a suitable and accurate trace back method from abattoir to the property of origin, as previously used fire brands on the hides of infected animals were considered of limited value and could not be used as a basis for a sound disease control programme. After lengthy consideration was given to various suggestions, including those where overseas studies had identified alternatives to the brand, it was decided that a tail tag would be the most effective and least inconvenient method. After an amount of field investigation and trial, the currently used tail tag system bearing the owner’s identification number was implemented. They are orange plastic (since 1989) and may be wrap-around or ratchet type. The tags must be put on the tail of the owner’s cattle above the brush so that the identification number can be seen. The registration authority is the local Rural Lands Protection Board who register and supply the individual properties. If disease is discovered at slaughter, a quick and reliable trace can be made through the board and control measures such as immediate quarantine can be implemented if required. Government inspectors are present at saleyards to ensure the regulations are complied with and when required, emergency tail tags can be acquired from Government officials at the yards to replace those which may have become detached from the tails of cattle. The Act provides exemptions to tail tagging of cattle which are: 1. Where the owner has one head of cattle or less and has a licence issued under the Stock Diseases Act, in which case he must notify when he sells or delivers cattle; 2. Where the cattle are under the age of three months; 3. Where the cattle are from other States and are sold or delivered for slaughter in New South Wales within seven days of entry; 4. Where the cattle bear a tag from a previous sale in which case they may then be sold within twenty-eight days of purchase, provided the tag is still attached; 5. Where the cattle are calves which are unweaned and sold with their mothers; 6. Where the cattle are stud stock and are to be used for breeding purposes; 7. Where the cattle are sold with a property and are to be retained on the property; and; 8. Where the cattle are sold on a holding or, if they are legitimate travelling stock, are sold on a travelling stock reserve, provided they go directly to a holding occupied by the purchaser for the purpose of restocking that holding. The co-operation of agents can achieve much if they draw the attention of defaulting owners to their obligations and in this regard, it should be borne in mind that the agent selling the cattle is equally liable with the owner if cattle which are required to be tagged are untagged when sold. To avoid such a problem, the agent

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should purchase any necessary emergency tags from government representatives and debit the owner with that cost. Such a cost is minimal. Where store steers are bought by a person for fattening, the tags must not be removed for at least fourteen days. If a butcher buys steers, he does not have to retag them if they are killed within seven days but if he retains them longer than that period, he must affix his own tag to each beast prior to slaughter. Re-tagging is not necessary where a purchaser of store steers who buys them for fattening sells them in less than twenty-eight days of purchase, provided that they are still tagged with the previous owner’s tags. If, however, the animals have lost their tags, the cattle must be tagged with the new owner’s registered tag before they are sold or slaughtered. Regardless of whether cattle are sold to interstate buyers and are destined to go interstate, the cattle must be tagged in accordance with the regulations when they are sold in this State. Obviously, if the sale takes place outside New South Wales, then the provisions of this legislation do not apply. Although there is no legal obligation placed on stock selling agents by the Stock Diseases Act or regulations made pursuant to the Act regarding tail tagging, there is an implied obligation that agents should do all things necessary to protect the person or persons for whom they are acting, known as the principal(s). Such an implied obligation would extend to ensuring that their clients, the vendors comply with the provisions of the legislation. Similar identification provisions apply under the Stock Diseases Act to pigs which weigh more than 25 kg and are being sold or sent for slaughter. In addition to tail tags, the legislation provides for pig identification to be undertaken by way of tattooing or branding. TRAVELLING STOCK

A most important factor to be considered by an agent is the clinical status of an area where the agent conducts his business. The agent must be aware of any restrictions which apply to the movement of stock within his district. Such restrictions may apply to tuberculosis testing, brucellosis testing, dipping for tick, footrot or anthrax. In addition, agents must maintain a continuing awareness of any properties within their district which are the subject of quarantine. Those agents conducting their business adjacent to State borders should maintain a working knowledge of health requirements pertaining to cattle leaving or entering New South Wales as large sales have been lost in the past due to cattle being ineligible to enter a given area. Under the Rural Lands Protection Act 1989, four situations are prescribed in relation to travelling stock documentation. These situations are when: 1. A transported stock statement is required; or 2. A walking stock permit is required; or 3. A stock licence may be used instead of a transported stock statement or walking stock permit; or 4. Where no documentation is required.

In summary, each of the three items of documentation is briefly described: A transported stock statement is required on all occasions that stock are transported by vehicle from one point to another within New South Wales except in the following circumstances:

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(a) When horses are being transported to or from any agricultural show, exhibition, gymkhana, pony club meeting or similar function; (b) When racehorses or harness racing horses are being transported from one place to another; (c) When stock are moved into New South Wales from another State and travel for up to 30 km before immediately proceeding back into the other State; (d) When stock are moved across or along a road or reserve from one part of a holding to another part that would be contiguous with the first-mentioned part but for being separated by the road or reserve; (e) When stock are moved to or from a place at which they are to be or have been treated by a veterinary surgeon; (0 When horses are moved to or from any place for use as working horses. There are occasions where options exist to use stock licences in lieu of a transported stock statement, however, there is considerable benefit in using the latter even in circumstances where a stock licence may be used. These benefits are as follows: Greater protection against stock theft, in that the animals involved are described on the transported stock statement. In the case of stock licences, there is no detailed stock description. Under the provisions of the Prevention of Cruelty to Animals Act, a person conveying stock by vehicle must keep a record of (a) date and time of loading and unloading (b) the times at which the stock were inspected during transit (c) the injuries or deaths which may have occurred in transit Provision is made on the transported stock statement form for these details.It is not available on the stock licence form. In the case of cattle moved to saleyards or abattoirs, it is important that a declaration on the status of the animals concerning hormonal growth promotants (HGPs) be provided. There is provision for such a declaration on the transported stock statement form but not on the stock licence form. A walking stock permit is required in all instances where a stock movement on the hoof is made within New South Wales except in the following circumstances:

1. When the movement of any horses on the hoof is accompanied by riders. 2. When stock are being used to pull a sulky, wagon or other vehicle. 3. When stock are being moved across or along a public road or travelling stock reserve from one part of a holding to another part that would be contiguous with the first-mentioned part but for being separated by the road or reserve. 4. When stock are moved to or from a place at which they are to be or have been treated by a veterinary surgeon. A stock licence may be used instead of a transported stock statement in order: 1. To move stock over an unlimited distance within a district of the board of issue or to move stock within a prescribed distance within a district of the board of issue for any purpose except a movement to saleyards or abattoir; 2. Where the distance within the district of the board of issue is restricted as a prescribed maximum distance, to move the stock within that district: (a) between any two holdings that are occupied by the same occupier; or (b) to or from any agricultural exhibition; or

LIVESTOCK AUCTIONS 43

(c) to or from dip sites; or (d) if the stock are calves that are not more than one month old, to saleyards. Stock licences are operative within the district of the board of issue unless they are endorsed by another board to cover districts within that board’s area. They may be issued subject to conditions and restrictions, including the maximum distances referred to in 1. above permitted for the movement of stock. Stock may also be moved under the authority of a stock licence instead of a transported stock statement by an agent between the agent’s holding paddock or holding yard and a saleyard or abattoir. In these circumstances, the total distance of this journey and the journey to the agent’s holding paddock or holding yard made under the authority of a transported stock statement or walking stock permit must not exceed 5 km. Stock licences may also be used as an alternative to a walking stock permits to move large stock for a distance not exceeding 16 km or to move small stock, for a distance not exceeding 10 km in the following circumstances: (a) between any two holdings occupied by the same occupier; (b) to or from any place for the purpose of being sheared, crutched, dipped, branded, earmarked or other treatment associated with good animal husbandry practice; (c) stock other than horses being moved to or from an agricultural exhibition; (d) stock which are less than six months of age being walked to saleyards or abattoirs provided they are not accompanied by older stock; and (e) in the case of stock that have been taken to a saleyard for sale but were unsold, to the holding from which they travelled for the purpose of sale. It is worthy of note that a person may use a stock licence instead of a walking stock permit in the circumstances outlined above. However, some stock owners may prefer to use a walking stock permit in all cases because there is greater protection against theft with that document. The provisions of the Act are quite complex and include a number of exemptions to the requirement to obtain documentation prior to moving stock from one point to another. Many agents are appointed as permit officers by local Rural Lands Protection Boards and where any confusion exists concerning the responsibility of the agentjpermit officer, he or she should not attempt to ‘guess’ his or her way but should seek assistance from the local board. Travelling stock documentation delineates the stock to be moved, the route to be taken, the transport mode and the person in charge of the stock. On payment of a prescribed fee, the document is issued to the applicant. Travelling stock documentation is used to suppress theft of livestock, and also as a partial trace on diseased stock. HGP EARMARKING OF CAlTLE

Under the provisions of the Stock Medicines Act, all cattle that have been treated with a hormone growth promotant (HGP) are required to be permanently earmarked with a standard (20 mm side) triangular earmark in the right ear at the time of treatment. This is in addition to the orange coloured standard tail tags used for this purpose. Also, producers are required to maintain records of HGP purchases, including type, dose and number of doses, age, sex and breed of cattle treated, date treated and details of disposal. Untreated animals are required to be marked with pink coloured ear and tail tags.

CHAPTER 5 CONTRACTS AND AGREEMENTS There are people who buy and sell stock on behalf of primary producers and there are professional advisers who live in cities and provincial towns who are authorised to make investment decisions. People who are employed to perform these functions may be treated by the law as an agent of the primary producer and as a consequence, may be expected to conform to certain obligations and responsibilities imposed by the law of agency. The responsibilities imposed on both the agent and the person for whom he or she is acting, known as the principal, are generally found in common law and through decisions made by the courts on similar issues. In the State of New South Wales, however, licensing and statutory requirements affecting the role of the real estate agent, stock and station agent and auctioneer are dealt with by the Property, Stock and Business Agents Act of 1941. The Act and the regulations made under the provisions of the Act are administered by the Real Estate Services Council. Similar legislation and government controlling bodies exist in other States and Territories throughout Australia. In the forthcoming chapter, the matter of contracts and agreements will be discussed where they relate to the law of contract peculiar to common stock and station agency practice contracts. PRESCRIBED TERMS AND CONDITIONS OF AUCTION SALE

The Property, Stock and Business Agents Act prescribe certain terms and conditions to govern the conduct of auction sales. The Act stipulates that these terms and conditions must be displayed in a prominent position to allow the public to read them prior to and during the auction sale. There are six prescribed terms and conditions to be contained in all auction sale contracts (with the exception of wool, liquor and forfeited shares). They are: 1. Subject to any reserve price, the highest bidder shall be the purchaser; 2. In the event of a disputed bid, the auctioneer shall be the sole arbitrator and his decision shall be final. If one of the claimants will advance, then the lot or lots shall be put up again at the auctioneer’s discretion; 3. The auctioneer may refuse to accept any bid which, in his opinion, is not in the best interests of the vendor; 4. Where the vendor reserves the right to bid at the auction in respect of a lot and instructs the auctioneer to make more than one bid on hisher behalf, the auctioneer shall, prior to submitting the lot for sale by auction announce in a clear and precise manner the number of bids reserved by the vendor in respectof that lot; 5. A bidder shall be deemed to be a principal unless, prior to a bidding, hehhe has given to the auctioneer a copy of a written authority to bid for or on behalf of a person; and 44

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6. As soon as practicable after the fall of the hammer, the purchaser shall sign the agreement (if any) for sale. NOTIFICATION OF TERMS AND CONDITIONS

It is important to understand that the terms and conditions enumerated above must be notified by the auctioneer. This stipulation is set out in regulation 66D of the Property Stock and Business Agents Act: ‘66D1. Except as provided in clause (2), an auctioneer who conducts a sale by auction of property shall notify the conditions of that sale by means of notice: (a) which contains all the conditions written or printed in the English language in figures and letters that are clear and readily legible; and (b) which is exhibited in a conspicuous position so as to be clearly visible to, and available for inspection by, any person attending the auction prior to and during the auction. 2. Where an auctioneer conducts a sale by auction of property comprising more than one lot and, in relation to any one or more of those lots, one or more of the conditions of sale are different from the conditions of sale of all or most of the other lots, the auctioneer may notify the different conditions by reciting those conditions aloud in a clear and precise manner immediately prior to offering that lot for sale.

Note: Each agent must display their individual terms and conditions of sale. If a number of firms are selling at saleyards at one time, it is illegal to merely display one set. COLLUSIVE PRACTICES AT AUCTION SALES

Section 47 of the Act provides that, ‘An auctioneer shall not sell by auction any property unless notice is given, in the prescribed manner and in the prescribed terms (if any), of the material parts of section 45 and 85C’ and in this regard, the prescribed manner and prescribed terms are outlined in regulation 66E which is quite similar in form to the provisions of Regulation 66D outlined above and which relates to the notifying of conditions of sale. The material parts of section 45 and 85C are identified in schedule 4 of the regulations which appear as follows: Property, Stock and Business Agents Act 194 I-Warning. Section 45. It is an offence against the Property, Stock and Business Agents Act, 1941, for any person to engage in, or to induce or attempt to induce another person to engage in, any collusive practice which may hinder free and open competition at an auction sale, whether by(a) restricting the bidding; (b) abstaining from bidding; or (c) any other activity which may hinder free and open competition. Section 85C. The actual successful bidder at an auction sale must give to the auctioneer or an employee of the auctioneer on the day of the auction hisher name or, where he/she acts as an agent, the name of hidher principal. It is an offence not to do so.

RESPONSIBILITIES OF A N AUCTIONEER

An auctioneer is an agent employed by hisher principal to sell goods, property or livestock by auction. In addition, an agent has well established responsibilities to the

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principal, which are imposed by the law of principal and agent. Some of these responsibilities are known as fiduciary duties where the agent’s duty must not conflict with hidher interest. The agent has a duty of confidence, honesty and responsibility to act for the principal. The rules of conduct which appear in schedule 2 to the Property, Stock and Business Agents Regulations also establish rules for licensees, including stock and station agents. In some other States, ‘codes of conduct’ have been enacted in regulations in a similar way to the rules of conduct. The purpose for these rules or codes is not to alter the common law, but they are included in a general way as the statutory or regulatory expression of what is expected of agents. An auctioneer’s agency is a general agency when acting for a vendor or principal, who can affect that agency by limiting hisher authority through special instructions. Due to the fact that an auctioneer’s business is not entirely a retail concern, hidher ability to secure compensation for loss of goodwill or new leases can be affected as well as hidher protection under some landlord and tenancy legislation. Although it has been outlined that an auctioneer is an agent employed by a principal for certain purposes, there are some important differences between the agencies of a real estate agent and an auctioneer. There is nothing to compel a real estate agent to do anything and if he or she wishes, the agent can become entirely inactive. Accordingly, a principal is entirely free to revoke his or her authority without being responsible for any damages, due to the agent being prevented from earning his remuneration, through the severing of the relationship. However, because the employment of an auctioneer usually involves that auctioneer in a considerable amount of work and expense in the carrying out of the instructions given himher by hisher principal, there is an obligation on both parties to zealously carry out the terms of their agreement. Either party may be liable for damages in the event of failing to honour their undertaking. It must be remembered that as agent for the vendor, an auctioneer has the implied authority to complete a memorandum on behalf of the purchaser which binds both parties. Such an implied authority is incapable of delegation and therefore cannot be extended to the auctioneer’s clerk. When the auctioneer is acting for himherself in selling hidher own property, he or she is unable in these circumstances to sign a memorandum for the purchaser, as such an act would be inconsistent with his duty of responsibility. An auctioneer has a duty of care regarding any property entrusted to him or her for sale. The standard applicable is that which a reasonable person would expect an agent to exercise in the circumstances. That duty of care does not cease with the responsibility for the property but extends to include the need for proper care, skill and diligence in the undertaking of his or her business as an auctioneer. In the event of the auctioneer demonstrating any dereliction of duty, he or she becomes answerable to hisher principal. Any failings, shortcomings or mistakes made by an auctioneer will, depending on the circumstances, be actionable. If an auctioneer sells goods for a person who does not possess title to the goods, he or she is also liable to an action, although in these circumstances, he or she is afforded some protection or relief under the Factor’s Act. Any property that the auctioneer exposes for sale excludes that auctioneer as a potential purchaser, although, in circumstances where a lot is knocked down to a bidder who fails to proceed with the purchase, the auctioneer retains a lien on the vendor’s goods for his or her expenses and commission. The auctioneer also has the power to sue the bidder for fulfilment of the contract. Should the auctioneer expose goods for sale and the vendor then immediately sells them by private treaty, the

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auctioneer is entitled to recover hisher commission as if the property had been sold by the auctioneer. As a general rule, an auctioneer is given authority to receive money. In this regard, he/she only has authori;y to receive money in the form of cash only. This does not allow him to give credit. He or she cannot take security or allow a set-off due from the vendor to the purchaser. Provided that the auctioneer takes reasonable precautions, a cheque may be accepted, but it is stressed that he or she is not obliged to accept a cheque and has no authority to accept an IOU or post-dated cheque. Apart from the ordinary rules of contract or State legislation, there are no restrictions upon any person acting as an auctioneer. State restrictions applying to licensing provisions have recently been altered to provide for licenced real estate agents and stock and station agents to act as auctioneers without being required to hold a specific licence as an auctioneer. Provided that a person is of sound mind, a person, regardless of gender may so practice. Even persons with limited or no capacity to contract or act on their own behalf are considered competent to contract or act as auctioneers. There are various pieces of legislation which place restrictions on the conduct of auctions, such as those which prohibit an auction sale being conducted in such circumstances which cause crowds to gather and cause obstruction to neighbouring premises or cause obstruction in a public place. Another example is the prohibition on persons (including auctioneers) to allow the consumption of liquor at an auction sale. In this respect, auctioneers should seek reliable legal advice where doubt exists surrounding the lawful conduct of a proposed auction sale. AUTHORITY OF THE AUCTIONEER

When acting for the vendor, an auctioneer’s agency is a general one whereby the vendor can limit the auctioneer’s authority by special instructions which must be in writing, except where livestock are the subject of the auction sale. These written instructions are provided for in specified terms of agreements which should contain the following: 1. Length of time of the agreement. Where no time is specified in the agreement, the manner in which the agreement may be terminated by either party. 2. The circumstances under which the licensee is entitled to remuneration for hidher services. 3. The amount or nature of the remuneration. 4. When the remuneration is due and payable. 5. The licensee’s entitlement to any reimbursement for expenses or charges incurred by him and when due and payable. 6. A term containing a warranty by the principal that he/she has the authority to enter into the agreement with the licensee. Where an auction concerns the sale of land, the agreement must also contain:

7. The circumstances under which a prospective purchaser may inspect the property. 8. The manner by which the property is to be advertised or promoted. 9. The licensee’s authority to sell the land on behalf of the principal and the limitations on that authority, including the minimum (or reserve) price if any at which the licensee is authorised to sell the land. 10. Any other services to be undertaken and performed by the licensee and if any, particulars of those services.

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Where an auction concerns the sale of goods, the prescribed terms must also cover: 11. Whether or not the licensee is responsible for the safekeeping of the goods. 12. Whether or not the licensee is required to effect insurance cover for the goods. 13. The period of time and the manner that the licensee must account to he principal for the proceeds of the sale. It is imperative that both the auctioneer and the principal zealously carry out the terms of their bargain because generally, a considerable amount of expense is outlaid by the principal in his employment of an auctioneer and substantial work and effort is required by the auctioneer in carrying out the instructions of the principal. As the agent for the vendor, the auctioneer has the implied authority to complete and sign a memorandum on behalf of the purchaser which binds both parties, provided that it is signed either immediately at the conclusion of the auction or as soon thereafter to remain a contemporary memorandum. Obviously, to sign a memorandum one week after the auction sale is too late to bind the parties. The implied authority given to the auctioneer to sign a memorandum on behalf of the principal does not extend to the auctioneers clerk and this authority cannot be revoked by either the auctioneer or the vendor after the conclusion of the bidding. The fall of the hammer constitutes the contract of sale but once the hammer has fallen and the contract has been established, the authority of the auctioneer to sign the memorandum of sale on behalf of both vendor and purchaser lapses because its purpose has been established. Although the matter of the licensee being responsible for the safekeeping of goods was discussed earlier in the context of prescribed terms to an agreement, it is the duty of an auctioneer to take the same care of property entrusted to them for sale as a prudent person would of their own. This statement of duty indicates that an auctioneer is liable for damages for loss sustained through their failure to exercise reasonable care, diligence and ability. The auctioneer does however, possess certain statutory exemptions but notwithstanding those exemptions, the auctioneer is liable to an action for selling goods to which the person who employs them has no title as auctioneers do warrant that they have authority to sell on behalf of their principal. The auctioneer is the person in charge of the proper conduct of an auction sale and where a dispute arises, the property should be put up again and be re-auctioned. The auctioneer is the only person who can arbitrate in these matters and must do so immediately. If he or she feels that the bidder is genuine and did make a bid which was unnoticed prior to the fall of the hammer, the bidding should be reopened, otherwise, the auctioneer should be quite firm and prompt in denying that there is any dispute. This advice is also included in the current standard contract for the sale of land in New South Wales and there are many past case decision references which purport to reflect the authority of an auctioneer in these circumstances. WITHDRAWING FROM SALE

If an auctioneer is of the belief that due to the limited number of people present at an auction sale or, some other substantial grounds for supposing that a proper price cannot be obtained, he or she is justified even in circumstances where the sale has been announced as being without reserve, in adjourning the sale or withdrawing the property from sale at any time before the bidding. It has been held that advertising a sale is only a declaration of intention to sell and does not constitute a contractual obligation to put the property up for sale. Accordingly, neither the vendor nor the auctioneer would be liable, except possibly in two situations:

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1. If the auctioneer is aware that he has no authority to conduct an auction and fraudulently advertises the sale; and 2. If the vendor withdraws the property for sale which was being offered without reserve and such withdrawal takes place after the bidding has commenced. In either of these circumstances, the auctioneer andor principal, would be liable in damages to the highest bidder. It should be remembered that there is no contract until the hammer falls and a bidder may withdraw by retracting his or her bid at any time before such fall of the hammer. SALE FOLLOWING FAILURE TO REACH RESERVE

There are many occasions where property being auctioned has been passed in following the failure of those present to bid up to or beyond the reserve set by the vendor and the auctioneer has sold it at the reserve price to a person present during the bidding. In circumstances such as these, the sale is considered valid, as in effect, it is a sale by auction. The auctioneer’s authority to sign the contract persists throughout the auction and beyond that term, so that an auctioneer is held authorised to sign on behalf of both parties after the actual term of the auction (but not the next day or a week after the auction). Written instructions, given by the principal to the auctioneer generally include an express entitlement for an excliisive agency for a limited time to prepare and complete the sale. It is absolutely essential that such an exclusive agency be obtained to include the sale of the property by private treaty. This protects the auctioneer against possible loss of commission. If, immediately after an unsuccessful auction, a vendor employs another agent and that agent sells the property, perhaps to a buyer who had been introduced to the property during the auction or auction lead-up period, the auctioneer would not be entitled to his commission (as is referred to in the matter of Green v Hill, 12 LT, OS, 151). OBLIGATION TO OBTAIN DEPOSIT AT TIME OF SALE

If the highest bidder is unable to sign an effective and binding contract or to provide an immediate deposit, the auctioneer has a discretion to refuse to sign the contract on behalf of the vendor. If such a deposit is not immediately available, it would be incomprehensible to imagine an auctioneer in a position where he or she allows (say) one hour for a successful bidder to produce a deposit and when the bidder fails to return within that time, not to be in a position to resell the property due to a signature having ratified the contract. (This is in direct reference to the matter of Morrow v Curty (1957) Supreme Court of Northern Ireland). LIABILITY TO VENDOR FOR PAYMENT

Although the general law provides that an auctioneer is not liable to the vendor for payment of the amount successfully bid for goods at an auction until he has received such payment, Judge Donovan said during his judgement in the case of Huyne v Duvidson, 31 May 1963, Sydney District Court ‘An auctioneer, if he parts with possession of his principal’s goods without payment, is liable for the price unless he has been authorised so to do’. A statement made by the New South Wales Stock and Station Agents’ Association includes, ‘It can be seen that there is a grave risk that an agent giving delivery of

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stock without the express permission of the vendor could be held responsible for the payment of the proceeds in the event of the owner defaulting’. Most woolbrokers and many stock and station agents accept by implication, the del credere risk (referred to in another chapter) by guaranteeing their vendors or clients immediate payment for all stock sold, regardless of whether they have received payment from the purchasers. It is of particular importance to those auctioneers not accepting the del credere risk that they obtain authority from their principals to deliver up possession of goods sold prior to payment or otherwise, retain custody of the goods until payment is made. AUCTIONEERS’ INABILITY TO DELEGATE

The agency of the auctioneer is personal and cannot be delegated. Pursuant to the provision of the Property, Stock and Business Agents Act in New South Wales, there is provision for the registration of salespeople in the areas of real estate and stock and station agency who act as trainee auctioneers, however, these certificated persons operate under the control, direction and supervision of a licensed agent and although that licensee may delegate various tasks to his employees, he or she cannot delegate the ultimate responsibility of his or her agency. The auctioneer has no power without the authority of the vendor to delegate his or her agency to another. In effect, an auctioneer employed by a vendor to sell must, in general, effect the sale through his or her own agency. The auctioneer has no authority, except by express instructions given by his or her principal to give a warranty at the auction. A vendor will not be bound by an unauthorised warranty although it may render the auctioneer personally liable for breach of warranty to the purchaser. After the offering has been knocked down to a successful bidder, the contract cannot be rescinded by the auctioneer and neither can he or she introduce into it any stipulations about title. The authority given to an auctioneer to sign a memorandum is limited to sales by auction. Unless this authority is specifically extended, the auctioneer’s authority to bind the purchaser by signing for him or her upon a subsequent sale by private treaty of unsold lots, is no greater than that of any other agent. GOODS SOLD IN LOTS

If goods are sold by auction in lots, they are offered in succession and once the bidding commences, it continues in an increasing mode from the previous bid. Bidding may not necessarily be by word of mouth but may be given by hand gestures or a nod of the head. Generally, the names of bidders are not recorded, however, a particular reason such as the auction or transaction’s exceptional importance may dictate that formality is required whereby the auctioneer or the auctioneer’s clerk will record the names of the bidders and their respective bids as they occur. It is important to note that wherever goods are offered for sale by auction in lots, each lot is deemed to be offered as and the subject of a separate contract of sale. RETRACTION OF BID

A bid is merely an offer to purchase which can be retracted by the bidder at any time before the auctioneer completes the sale. Such completion is indicated by the fall of the hammer or some other means accepted as being customary. Although the conditions of sale may provide that the highest bidder shall be the

CONTRACTS AND AGREEMENTS 51

purchaser or that no person shall retract his or her bidding, there is case law where courts have expressed their opinion that such a condition prohibiting the retraction of a bid cannot be enforced, as a bid only constitutes an offer to purchase. Although the manner by which a bid may be made has already been discussed, the manner that a bid can be retracted is that it must be made loudly and in such a way that the auctioneer can be in no doubt of what is intended. The onus for such effective transmission rests with the bidder. IMPROPER BIDDING

When an offer made by a prospect is submitted to the principal by the agent, such purports to be the best offer that the agent has received and if the principal accepts that offer as being the best offer that the agent has received and at that time it is not, then the agent is not only acting dishonestly but is in breach of his or her implied duty to his or her principal. The.general law provides that when an auctioneer calls a bid, he or she implies by their very conduct that it is a genuine bid. If a member of the group assembled at the auction relies upon a false bid called by the auctioneer as being genuine and calls one which is higher which results in the property being knocked down to him or her, the bidder will pay more than he or she would otherwise have paid. Of course, this should not be confused with the normal duty of the auctioneer to display and announce his terms and conditions of sale inclusive of his reserved right to one (or more) bids being made on his or her behalf. Under the circumstances of an improper bid being called by the auctioneer resulting in financial loss to the bidder, the contract of sale becomes voidable and the auctioneer liable for damages in deceit for knowingly making a false representation. It is highly likely that should an auctioneer demonstrate such dishonest conduct at an auction sale, then he or she may also be proceeded against criminally for obtaining or attempting to obtain a benefit by deception. Should a third person make fictitious bids without the knowledge of the vendor or auctioneer, such do not affect the right of the vendor to specific performance and further, such fictitious bids do not invalidate the sale. The auctioneer will be justified in withdrawing the property from sale when acts of a fraudulent or improper nature are undertaken by persons endeavouring to prevent the property from realising fair value and any such conduct will invalidate any purchase made by those fraudulent or improper means. For an auctioneer wishing to personally purchase property being put up for sale, he or she must only do so with the knowledge and approval of the vendor. To do otherwise, will result in the sale being voidable. Where an auctioneer is appointed as trustee to certain property, he or she cannot, unless expressly authorised in terms of the trust, make a profit from executing the duty of the trust or claim remuneration for selling the trust property. DUTY TO ACT IN THE PRINCIPAL'S INTEREST

An agent must always act in the best interest of his or her principal and not adversely to that principal by giving any assistance to a third party. The duties of agents under the general law provide also that an agent must not make any secret profit out of his or her agency beyond commission. Such an agency is a fiduciary relationship whereby trust is the key element essential to the relationship. There is no general law which provides any requirement for loyalty between a vendor's agent and a

52 STOCK 81 STATION AGENTS’ HANDBOOK

purchaser although there are many agents who are of the mistaken belief that such does exist outside normal honest business practices. In circumstances where they should be vigilant in attempting to gain the highest price for their vendor, these agents will advise the purchaser to offer less than otherwise intended with a view that the vendor will accept the lesser amount. Such a practice along with others which do not honour the fiduciary agency between principal and agent are clearly breaches of the duties of an agent under the general law and do nothing towards enhancing the professional status of agents. AUCTION DISPUTES

There are occasions where an auctioneer is confronted by disputes amongst bidders. This occurs particularly where a bid has been made immediately before the fall of the hammer and this bid has not been noticed by the auctioneer or any of his assistants, the property subsequently being knocked down to the previous bidder. In this regard, it is the responsibility of each and every bidder to communicate his or her bid effectively to the auctioneer. It is also crucial that those auctioneer’s assistants are reminded of the need for them to remain alert throughout the auction to identify all bids and thus avoid disputes, however, the auctioneer should be aware of the existence of those who would attempt to profit at the hands of others such as the practice employed by some who do not bid, but wait for the property to be knocked down. These people then put up their hands or call out to signify a bid hoping that they might buy more cheaply without contributing to the price rise through bidding. An alert auctioneer will be quick to recognise someone employing this old trick and deny them any consideration. Once having formed the view that there is a dispute, the auctioneer, being the sole arbitrator, may either determine the dispute immediately or put the property up again. The auctioneer exercises this option on behalf of hisher vendor. It is worth remembering that putting up the property again is consistent with the purpose of an auction; that is to sell the property at the highest price which everyone present is prepared to give. PRIVATE OR PADDOCK SALES

It is essential that when stock are given to an agent for sale, the agent immediately conducts an inspection of them and records an accurate description. It is in the best interests of an agent to make this personal inspection and not just rely on the description given to him or her by the owner. To ensure that the description made by the agent is properly committed to an advertisement or verbal description, the agent should ensure that the person reading or hearing it is conversant with the stock concerned and fully understands the particulars given. The advertising material must also contain such information as breeding, condition, whether they are free to journey interstate and if the stock are sheep, the time of shearing and dipping. It is important to remember that a poor or inaccurate description may result in a claim being made against the agent by a prospective buyer who finds that the stock are quite untrue to description. It is equally important to an agent that he understands that his reputation and the reputation and image of the firm can be very badly damaged or even destroyed if a suspicion develops that their dealings in stock cannot be relied upon as being entirely accurate in their descriptions. Whenever a prospective buyer wishes to make an inspection of stock, the agent

CONTRACTS AND AGREEMENTS

53

should make every effort to accommodate the prospective buyer’s needs by making complete and proper arrangements for the buyer to have every opportunity to closely examine the stock concerned. Although the agent’s duty is to the principal who is the vendor, in these circumstances and for practical negotiations, he or she must often assist both the purchaser and the vendor to arrive at mutually satisfactory negotiated prices. After an agreement has been reached on price (per head), the agent is left to arrange delivery, rejection, transport and terms of payment. These details are clearly contained in the contract of sale along with full description, including marks and brands to remove any doubt or misunderstanding in the future concerning the conditions and intent of the proceedings. When stock are mustered to allow for such an inspection, it is usual for some not to reach the purchaser’s required standard due to the stock being lame, blind, flystruck, diseased or in some way not consistent with the description in quality or condition. An offer is then made by the purchaser, subject to his or her right to reject these defective stock altogether or to accept them at a reduced price. Generally, such a rejection is expressed as a percentage. An example of how such a rejection is stated in the contract is: 300 two year old merino cross ewes, August shorn, Gowrie station bred and mark at $15 per head with a 5 per cent rejection at $10 per head. In a saleyard situation, any rejected stock would be removed and sold separately prior to auction. PAYMENT

It is of particular importance if the purchaser is not personally known to the agent or is dealing through a conjunction agent from another district that he or she checks the purchaser’s credit rating before delivery of the stock takes place. In order to establish an ability to pay for the stock on delivery, it is the responsibility of the purchaser to furnish the agent with adequate proof in these circumstances. Transport arrangements are made by the agent after having completed the sale. Such arrangements may include the shifting of stock at an appointed time by drovers. Upon receiving payment from the purchaser, the agent will deduct his or her commission at the appropriate scale. The scale in New South Wales is determined by the schedule approved by the Stock and Station Agents Association of New South Wales. Of course, if there has been another agent acting as a co-joined agent in the sale, he or she will deduct that share from the commission and forward it to the other agent. After deducting other costs which have been incurred on behalf of the vendor, he or she will make payment to the vendor unless the stock are covered by a bill of sale or stock mortgage, in which case, payment is normally made to the financier or wool broker. When calculating deductions, it is worth remembering that with conjunction sales, certain costs are incurred by individual agents arranging inspections such as long distance telephone calls, accommodation and travelling expenses. Details of these special allowances are provided by the Stock and Station Agents Association of New South Wales for matters applicable to that State. The issue of stock in transit insurance should not be overlooked and the purchaser’s wishes in this regard should be sought before delivery. Insurance procedures are covered in Part I1 of this book.

54 STOCK & STATION AGENTS’ HANDBOOK

ADVANTAGES OF PADDOCK OR PRIVATE SALES

There are a number of advantages given to selling stock in the paddock against those of saleyard sales. Those advantages include: 1. Concern regarding long distance transportation of stock to distant saleyards can be avoided; 2. Inadequacy of normal pens at saleyards to accommodate large lines being offered will not be of concern; 3. Time of delivery can be negotiated between the buyer and the vendor at a time to suit the requirements of the buyer; 4. Delivery can be negotiated between the vendor and the buyer to allow for such things as completion of shearing or weaning of calves and lambs; 5. Delivery can be negotiated to allow for a delay until stock are in prime condition; and 6. Less handling of large lines of fat sheep is necessary resulting in less bruising, maintenance of weight and a better percentage of first class carcasses than would otherwise be expected if the stock were sent through the saleyards. CONTRACT FOR PRIVATE SALE OF LIVESTOCK

The following pro forma is a sample contract for private sale of livestock.

CONTRACTS AND AGREEMENTS 55

CONTRACT FOR PRIVATE SALE (NAME OF FIRM OR AGENT) (Town) ....................... Date ........................... Ywe

......................................................................................................................

-.......................................

(hereinafter called the agent) acting as agent for

the Vendor............................................................................................................................................ of ......................................................................................................................

......................................

hereby agrees to sell and ...................................................................................................................... of ...........................................................................................................................................................

hereby agrees to purchase the undermentioned Stock, namely: .....................................................

......................................................................................................................

-.......................................

......................................................................................................................................... ......................................................................................................................

.....................

.........................................

.........................................................................................................................................

.....................

.........................................................................................................................................

.....................

Numbers believed to be more or less approximate but not guaranteed same as inspected by

and approved by himher at ............................................... of ............................

on the .........................................

day

19........

such purchaser having the right to reject .......................................................................................... from the number mustered, which said stock are now depasturing on .........................................

...............................................................

at the rate per head of

........................................................

Terms of Payment......................................................................................................................

-........

56 STOCK & STATION AGENTS’ HANDBOOK

CONTRACT FOR PRIVATE SALE (PAGE 2) Pro forma delivery to be given and taken at .................................................................................... on or before the ...................................

day of ....................

19........

Unless delayed by rain, flood or bushfires, and if so delayed then such delivery shall be given and taken and the stock counted as soon after such date as is reasonably practicable. Such delivery shall be considered actual delivery (without another count being made) when payment is made and any cheque or promissory note given by the purchaser in respect thereof duly met but not before and further until such payment is completed, purchaser to hold the abovementioned stock as bailee only for the vendor and (notwithstanding anything herein to the contrary) no property therein shall pass to the purchaser. The stock shall be at the risk and expense of the purchaser as from the date of the pro forma delivery thereof. In the event of non-completion of the payment as aforesaid, the vendor or hisher agent shall have the right to repossess the stock and for such purpose by this agreement is expressly authorised by the purchaser to enter upon the lands and premises where the stock are for the time being.

If the purchaser shall neglect or fail to comply with any of the above conditions, the stock may be resold by the vendor by public auction or private contract with or without notice at the risk of the purchaser who will be held responsible for all loss and expense arising out of such resale and who shall not participate in the profit (if any) accruing therefrom. In consideration of the vendor paying to the agent a commission of ............................ percentum of the total purchase price for the abovementioned stock, the agent shall indemnify the vendor up to the limit of such purchase price after deduction of the said commission against loss to the vendor by default of the purchaser in the payment of such purchase price and in the event of payment pursuant to such indemnity being made by the agent to the vendor then the vendor hereby irrevocably appoints the agent to be the attorney of the vendor with full power for the vendor and on the vendor’s behalf and that of the vendor’s executors administrators successors or assigns immediately on or at anytime after any payment by the agent as aforesaid and without giving any person any notice whatsoever in the name of the vendor to prosecute institute and carry on all actions, suits and proceedings at law in equity or otherwise when and as the agent shall see fit to recover from the purchaser the purchase price or any part thereof; the stock and any number of stock and to recover all damages interest and losses sustained by the agent and all costs which costs shall include legal costs as between solicitor and own client AND the agent shall have the right to make concessions or to compromise upon any terms with the purchaser as the agent in his sole discretion shall think fit PROVIDED THAT the agent shall indemnify the vendor in respect of all costs incurred in the prosecution, institution and carrying on of any such action suit or proceeding. Should any dispute arise between purchaser and vendor in respect of this contract, the same shall not vitiate the sale, but the matter shall be settled by arbitration in the usual way as provided by the Arbitration Act of 1902, or any amendments thereof or substitution therefore within twenty-one days of the date nominated herein for delivery to be given and taken or any extensions thereof as provided above.

CONTRACTS AND AGREEMENTS 57

CONTRACT

FOR PRIVATE SALE (PAGE 3)

We hereby agree to particulars, price, terms and conditions of sale as abovementioned. Witness .................................................. Vendor ................................................... Witness .................................................. Purchaser ............................................... Brands

Earmarks

Uwe acknowledge that Uwe act as the agent as above defined of the vendor.

............................................................... To-The

Vendor and the Agent

I acknowledge having received delivery of the stock above described.

............................................................... PurchaserIAgent for Purchaser

I

I

58 STOCK & STATION AGENTS’ HANDBOOK

CONJUNCTION OR SUBAGENCY AGREEMENTS

Whenever one agent acts for another agent in the sale of livestock, a conjunction agency agreement should be entered between the principal agent and the co-joined (or rebate) agent. Such an agreement formally protects the co-joined agent’s share of the commission (or rebate). Not only does such an agreement create this rebate assurance but it also outlines the details of the agreement so that both parties are fully aware of what has been arranged and what the rebate percentage is to be. The following rebate agency agreement is set out to assist general understanding. SUBAGENCY AGREEMENT INTRODUCTORY REBATE PURPOSES This is an agreement between ............................................................................................................ (hereinafter called the Selling Agent) and ............................................................................................................

............................................

(hereinafter called the Rebate Agent) whereby the Selling Agent agrees to pay the Rebate Agent a rebate commission of ...........% of gross proceeds on all stock (except Stud Stock) which the Rebate Agent influences to the Selling Agent’s auctiodpaddock sales at .................

.............................................................................................................................................................. The rate of rebate may be varied from time to time upon agreement between the parties hereto. This agreement can be terminated by either party giving to the other party seven days notice in writing Selling Agent ........................................

Rebate

Agent ..................................................... Date ........................................................ Date .....................................................

(To be completed in duplicate)

(Co-joined)

CONTRACTS AND AGREEMENTS 59

Property, Stock And Business Agents Regulations under the Property, Stock And Business Agents Act I94 I

The following is a selection of regulations applying to agents involved in the buying and selling of livestock, and applies generally to the keeping of records: Records to be kept by auctioneer of livestock 66.(1) An auctioneer who, in the course of his business as an auctioneer, sells or offers for sale by auction any livestock shall, in addition to any other books which he is required to keep pursuant to these Regulations, keep a livestock auction sales book at his registered office. (2) Before submitting any livestock for sale by auction, an auctioneer shall enter the following particulars in the livestock auction sales book in respect of each lot of livestock so submitted:(a) the name of the owner of the livestock; (b) the number of livestock in the lot; (c) the lot number; (d) a description of the livestock sufficiently detailed so as to facilitate its identification.

(3) Immediately after selling livestock by auction, an auctioneer shall enter the following particulars in the livestock auction sales book in respect of each lot of livestock SO sold:(a) the date of sale; (b) the place of sale; (c) the name disclosed by the actual successful bidder pursuant to section 85C of the Act as the name of the purchaser of the livestock; (d) the lot number; (e) the price for which the livestock was sold per kilogram of live weight or per head, as the case may be; (f) where the livestock is purchased on a live weight basis, the details of the live weight weighing; (g) the total price for which the livestock was sold.

Records to be kept by buyer of livestock 66A.(1) A stock and station agent who, in the course of his business as a stock and station agent, buys any livestock shall, in addition to any other books or records which he is required to keep pursuant to these Regulations, keep a livestock buyer’s book at his registered office. (2) Immediately after entering into an agreement for the purchase of livestock for or on behalf of a person, a stock and station agent shall enter the following particulars in the livestock buyer’s book:(a) the name and address of the person with whom the agreement was entered; (b) a description of the livestock to be purchased; (c) the number of livestock to be purchased.

(3) Immediately after purchasing livestock for or on behalf of the person, a stock station agent shall enter the following particulars in the livestock buyer’s bookthe date of purchase; the place of purchase; the mode of purchase; the person for or on behalf of whom the livestock was purchased; the person or persons from whom the livestock was purchased; (f) the total number of livestock purchased; (g) where the livestock was sold as a lot or as lots, the lot number or numbers;

and (a) (b) (c) (d) (e)

60 STOCK & STATION AGENTS’ HANDBOOK

(h) where the purchase was by auction, in respect of each lot purchased, the name disclosed pursuant to section 85C of the Act as the name of the purchaser of the livestock; (i) the price for which the livestock was purchased per kilogram of live weight per head, as the case may be; (i) where the livestock was purchased on a live weight basis the details of the live weight weighing; (k) the total price for which the livestock was purchased; (1) a description of the livestock sufficiently detailed so as to facilitate its identification.

Records to be kept by seller of livestock

‘66B.(1)A stock and station agent who, in the course. of his business as a stock and station agent, sells (otherwise than by auction) any livestock, shall, in addition to any other books or records which he is required to keep pursuant to these Regulations, keep a livestock seller’s book at his registered office. (2) Immediately after entering into an agreement for the sale (otherwise than by auction) of livestock for or on behalf of a person, a stock and station agent shall enter the following particulars in the livestock seller’s book(a) the name and address of the seller of the livestock; (b) the number of livestock to be sold; (c) a description of the livestock sufficiently detailed so as to facilitate its identification.

(3) Immediately after selling (otherwise than by auction) livestock for or on behalf of a person a stock and station agent shall enter the following particulars in the livestock seller’s book:(a) the date of sale; (b) the place of sale: (c) the name of the purchaser; (d) the price for which the livestock was sold per kilogram of live weight or per head, as the case may be; (e) where the livestock was sold on a live weight basis, the details of the live weight weighing; (f) the total price for which the livestock was sold.’

LICENCES FOR AGISTMENT

Stock and station agents and those within the pastoral industry recognise the word agistment as ‘the use of another person’s land upon which livestock is grazed or run in exchange for a fee calculated on a per head basis’. Stock and station agents regularly act for stock owners in securing agistment, particularly when there has been a diminishing of water and feed on the stock owner’s property due to such things as drought or the purchase of additional stock beyond the carrying capacity of the property. During times of drought, competition becomes keen among stock owners who seek suitable agistment country within a reasonable distance of their existing properties. These circumstances often result in such decisions being made in haste and because of this, errors can be made when agistment agreements and transactions are being prepared. In this regard, it is very important that the stock and station agent understands fully the significance of each part of the agistment licence form and that he satisfies himself that he has considered the practicalities of his client’s stock being secured on a particular property on agistment. Such considerations would include: Feed and water will be adequate for the period of agistment. Fencing of the agistment country is secure.

CONTRACTS AND AGREEMENTS 61

Inspections of the stock will be carried out in accordance with the agistment contract. Transport is available to move the stock to the site on or about the agistment date. It is important that the agent ensures that the licence for agistment is completed in writing. Whenever possible, the form should be completed and signed by both the licensor (property owner) and the licensee (stock owner) ‘at the farm gate’ when the agistment property is taken. This allows the agent to properly describe the conditions of the licence and what is being agreed upon between the two parties to avoid any misinterpretation then or during the currency term of the agreement. In this regard, it is stressed that the agent must have a thorough knowledge of such licence agreements to properly advise the parties and to demonstrate his professional capacity. In addition, it is pointed out that the agent’s role in arranging agistment is, in reality, merely a service to his or her client due to the low commission ceiling rate allowable. This aspect of limited remuneration highlights the need to avoid further reduction of his small commission in time consuming disputes. These can mainly be avoided by ensuring that the written agreement is properly completed and immediately signed by the principals. Although the form is relatively self-explanatory, there may be some confusion regarding the payment of agistment fees which may be expressed in several ways. Sometimes, fees are represented in terms of dollars per 1000 head per calendar month for sheep but it has now become more commonplace for such a fee to be expressed in cents per head per week. Fees for cattle are generally expressed in terms of cents or dollars per head per week. Each party to the agreement should be provided with a copy and the agent should retain one for his or her files which should be kept current until the agistment period has expired and the accounting completed. Any option to further periods of agistment provided for in the licence will also be recorded in the office diary along with the due dates that agistment payments are to be payed in advance. A check list should be maintained by the agent attached to the agreement form and perhaps accompanied by copies of correspondence items pertaining to the agistment licence. That check list and correspondence should provide the following information: commencement date of the agistment date the stock were placed on the property number of stock placed on the property date the stock were removed from the property number of stock removed from the property details of stock losses, injuries and deaths, where applicable. Should the agent receive money before remitting the amount due to the vendorflicensor, he or she would be obliged to use his or her trust account in the same way that it is used in matters involving other stock transactions. Generally, however, the agent pays the licensor and forwards an account to the licensee thereby rendering the use of the trust account in this instance inapplicable. The usual form of accounting memoranda consists of a debit note to the licensee (stock owner) and a credit note, minus the agent’s commission to the licensor (property owner). An example of the details that might appear on both memoranda is: ‘Agistment on 1700 sheep from 10 November, 19XX to 10 January, 19XX at the rate of 15 cents per head per week’.

62 STOCK & STATION AGENTS' HANDBOOK

The following licence for agistment form is provided to assist general understanding of its provision. LICENCE FOR AGISTMENT THIS LICENCE made and entered into on the .................day of ....................

19........between

......................

hereinafter called the Licensor(s)] of the one part, and .........................................

......................

hereinafter called the Licensee(s)] of the other part for the purpose of agistment.

WHEREBY it is agreed: 1. The Licensor(s), save as hereunder provided, hereby gives to the Licensee(s) the right of grazing a maximum of .................................................................................. ".........for a period of ....................... months with the option of a further period of .................................... in the .. paddock known as .......................................................... comprising approximately........................ hectares and being portion of the Licensors' property known as ....................................................... situated ..................................................

2. The Licence shall commence on the day the stock arrive on the property, but no later than the ..................... day of .................... 19........ 3. The Licensee(s) shall pay to the Licensor(s) an agistment fee at the rate of .................. for all ...................... counted on the property, payable monthly in advance. 4. Licensor(s) shall pay all rates, rents taxes and other impositions on the said land during the term of this licence. PROVIDED that the Licensee(s) shall be liable for any such impost ostensibly chargeable against the Licensor(s) by virtue of this agistment.

5. The Licensee(s) shall not be responsible for the destruction of noxious weeds or noxious animals on the said land during the term of his licence.

6. The Licensor(s) shall have all fencing in good order when the stock enter the said land and the licensee(s) shall leave all improvements on the said land in the same condition as when they enter the said land, reasonable wear and tear and damage by fire, flood, lightening, storm or tempest excepted.

7. The Licensor(s) do not undertake the duty of supervising any of the stock, but will provide reasonable assistance where possible and agree to allow access to the paddocks of any approved employee of the Licensee(s) to look after the said stock. PROVIDED HOWEVER that the Licensee(s) shall indemnify the Licensor(s) for any claims for worker's compensation or damaged in respect of injuries sustained by such employee. 8. The Licence shall not be deemed to be a lease or tenancy of the said property.

9. The Licensor(s) do not accept responsibility for loss of stock, or injury to stock, during the period stock are agisting on hidtheir properties. 10.The Licensor(s) agree to pay (the agent) commission at the ceiling rate currently allowable under the Property, Stock and Business Agents Act.

CONTRACTS AND AGREEMENTS 63

Signed by .............................................. Signed by .............................................. Licensor(s)

Licensee(s)

Witness .................................................. Witness .................................................. FODDER SALES AND CONTRACTS

There are two types of fodder sales which are quite different in their circumstances and required approach to merchandising. They are:

1. Normal sales These sales are made as part of the normal merchandising function of an agent who maintains fodder stocks for this purpose or by placing orders on a regular supplier. There are occasions where the order is placed directly with the producer of the fodder. In these circumstances, it is most unusual for a fodder contract to be prepared. 2. Drought sales The situation of prolonged drought places an entirely different approach to the selling of fodder as this commodity is placed in greatest demand during this time, particularly after local reserves of conserved fodder have been exhausted. In these circumstances, the importance of committing such fodder sales to formal contracts cannot be over-emphasised as past experience has shown that many purchasers make verbal agreements with vendors through agents for the supply of fodder ‘sight unseen’ and then later seek to avoid this when alleviated by rain. These fodder sales can be the cause of more disputes, write-offs and bad debts than any other form of agency practice and it is due to the problems that they can create that fodder sales should only be undertaken by experienced and competent agents. It is emphasised that transport is a major problem in fodder sales. As fodder is a bulky commodity, the average rail truck is restricted in the amount that it can carry. When a drought is prolonged, great demand is placed on the rail system, often causing delays of three months or more in securing rail trucks. The alternative to consigning of fodder by rail is the road transport system. Due to the bulk of the commodity, such an alternative can be very expensive and in the event that the destination is several hundred kilometres away, transport costs can equal double the cost of the fodder. During drought periods, the rail system offers freight concessions but these freight concessions are only passed on to road transport when the drought affects most of the State. It is the principal’s role to inspect and identify the fodder and to arrange weighing along with payment of transport charges, and agents should bear in mind that these issues are not their responsibilities. However, should the agent be specifically requested to inspect the fodder for the purchaser, he or she should take great care and be conservative in assessing and describing quality in his inspection report. Wherever possible, both principals should sign fodder contracts ‘at the stack’ where the whole transaction can be recorded to avoid any misunderstandings. The agent should be thorough in confirming and recording any alterations to original arrangements which may be required by changing circumstances, so that any disputes can be dispensed with through reference to filed correspondence.

64 STOCK & STATION AGENTS’ HANDBOOK

To ensure that the best interests of the agent and his client are maintained, the agent should: Make arrangements for the purchaser to closely inspect the fodder where practical to ensure his or her satisfaction that the same quality continues through the stack and that each bale is securely tied. Confer with the vendor to establish that the fodder being purchased comes from a particular lot or stack. Ensure that both the purchaser and vendor are aware of the current transport availability and possible delays. Ensure that the vendor supplies weighbridge tickets and insist upon the fodder delivery being based upon those weights. Weighbridge tickets are the basis for all weight contracts. Avoid paying for transportation of the fodder. Transport costs are the direct responsibility of the purchaser and the agent should not make this payment as he or she makes no earning from these charges which could represent an outlay of half or more of the total cost. If circumstances make it impracticable for the purchaser to arrange transport costs then the fodder contract should be amended to include a clause to cover the agent. The fodder contract form is reasonably easy to understand and complete. However, as there may be some areas which require clarification, the following is provided to assist readers in this regard: The quantity of fodder shown as being purchased should be considered in view of the mode of transport available. It would be uneconomical to use partly filled road transport The description of the fodder should be precise, particularly where prime quality is not being supplied. In lucerne sales, the cut should be quoted. The price should be recorded in terms of amount per tonne or bale. Delivery usually takes place at the vendor’s property, however, circumstances may find it more convenient to state that delivery is ‘on rail’ or at the weighbridge station. Although the contract form provides for disputes to be arbitrated, the cost of initiating legal action is seldom worthwhile due to comparative cost of the fodder. The purchaser usually accepts the responsibility for all freight payments but there are occasions where the vendor may give delivery ‘on rail trucks’ to the purchaser. In these circumstances, the vendor would assume the responsibility for payment of freight to rail. In addition to keeping diary notes of proposed delivery and/or trucking dates, the agent should maintain an office file containing his copy of the current fodder contract along with additional details of transportation dates, truck numbers and truck weights. This file, which may be in the form of correspondence copies should be retained until the contract has been fulfilled and the accounting has been completed. During drought situations, agents should secure payment from the purchaser first and then remit the net amount to the vendor due to the number of disputes which surround fodder sales. In these circumstances, the agent would need to make use of his or her trust account. The use of the trust account would not otherwise be necessary where the transaction is a normal sale of merchandise and the supplier is paid before receiving payment from the purchaser.

CONTRACTS AND AGREEMENTS 65

The usual form of accounting memoranda consists of a debit note to the purchaser and a credit note minus the agent’s commission to the supplier/vendor. The following fodder contract form is provided to allow readers a better understanding of its provisions and to assist in easier completion when necessary.

66 STOCK & STATION AGENTS’ HANDBOOK

FODDER CONTRACT BranchlAgency ..................................... Date:

......................................

.19........

IN CONJUNCTION WITH .................................................................................................................. As Agents for ...................................................................................................................................... we have this day sold to ...................................................................................................................... the undermentioned fodder more or less Description

Quantity BaleslBagsl Approx. Wt.

Price

(Weighbridge tickets to be obtained) SPECIAL NOTE: It is the vendor’s responsibility to obtain and deliver to the Agent weighbridge tickets which will form the basis for settlement of a weight contract.

.................................................................................................................................. on the .................................................. day of .................................................. 19........

As inspected by

TERMS OF PAYMENT-Settlement

will be made to the vendor on receipt of payment by

the agent from the purchaser and the parties acknowledge that the agent accepts no liability for completion hereof or for the payment of the purchase price by the purchaser. Notwithstanding the foregoing, should the agent see fit, it may pay the vendor on completion of the sale and if the agent does so, it may sue the purchaser in its own name for the purchase price. ~

’

COMMISSION: The vendor and the purchaser hereby acknowledge that commission at the negotiated rate oJ ..........................

shall be paid to the agent by the vendor...........................

The Vendor or his agent will deliver and the Purchaser or his agent will take pro forma delivery of the whole of the abovementioned goods at .................................................................. on or before ............................................................................

and such goods are to be consigned

to ......................................................................................................................

-. ...................................

unless the Vendor or hisher agent shall have previously notified the Purchaser or hisher agent that the date is impracticable for delivery (regard being had to the weather and the state of the country, strikes or other unavoidable circumstances, and the vendor shall not

be liable for any loss or damage occasioned thereby) in which event such delivery shall

CONTRACTS AND AGREEMENTS 67

take place on the first day thereafter that the said vendor shall notify as practicable for such delivery after which date the said goods shall be at the risk and expense of the Purchaser. Such delivery shall be considered actual delivery of the property in the goods when payment is completed and not before. Until payment in full to the Vendor of the purchase money or of any cheque given on account of same the property in the goods will remain in the Vendor but the goods will be at the risk and expense of the purchaser who will indemnify the Vendor from loss thereof or injury thereto or damage caused thereby. Should any dispute arise such dispute shall not vitiate the sale but the matter in dispute shall be settled by arbitration in the usual manner, as provided by the Arbitration Act, 1902, or any amendments thereof. FREIGHT OR CARRIAGE PAYABLE BY PURCHASER: The Purchaser or hisher agent instructs the agent to arrange transport of the fodder at hisher expense and make payment where applicable on his or her account unless specifically set out as follows ...........................

...................................................................................................................... ...............................

-.......................................

Rail consignments are to be in the name of the Purchaser and not the

agent so that any rebates of freight due to drought relief or other reason will be payable to the Purchaser. CARTAGE PAYABLE BY VENDOR: Where delivery is ‘on rail trucks’ and the Vendor instructs the agent to arrange cartage, he/she agrees to cartage changes being paid on hisher account unless other arrangements are to apply in which case these are specifically set out as follows: ..............................................................................................................................

......................................................................................................................

-.......................................

UWe have this day purchased the abovementioned goods and agree to take delivery of and to pay the same upon the terms and conditions abovementioned. WITNESS ............................................. PURCHASER ....................................... UWe confirm the sale of the abovementioned goods upon the terms and conditions abovenamed. WITNESS ............................................. VENDOR ..............................................

68 STOCK & STATION AGENTS’ HANDBOOK

AGRICULTURAL HOLDINGS ACT, I94I

The Agricultural Holdings Act was designed and intended to establish a stable and uniform system of tenant and sharefarming in New South Wales and to protect tenants and sharefarmers. One of the major objectives of the legislation is to provide machinery whereby both landlord and tenant will appreciate that each has a mutual interest in improved methods and agreements. This leads to a better relationship between the parties concerned. The Act clearly defines their rights and obligations to allow for the business of sharefarming to operate satisfactorily. Although agents are rarely called upon to arrange sharefarming agreements which would ordinarily be referred to a solicitor, it is reasonable to expect that agents will need to have a working knowledge of the provisions of the legislation and accordingly, the following overview is provided for this purpose: Application of the Act

The legislation applies to a holding used for agricultural, pastoral or dairying purposes which is 0.8 hectares (two acres) or over, excluding areas of house garden and farmed under an oral or written tenancy. Properly prepared written agreements are strongly recommended. The Act applies to tenancies where the tenant (or lessee) has an exclusive possession of the land whereby the landlord (or lessor) has handed over the rights to use and occupy the land for a definite period shown in the lease. It also applies to sharefarmers where they have a licence to occupy the land and agree to provide labour and/or materials and who agree to sharing the produce or proceeds of sale under certain circumstances. The Act does not cover sharefanners who are under a contract of employment with the landlord and are referred to in the Rural Workers Accommodation Act, 1969. Compensation entitlements (tenant)

Under the provisions of the legislation, the tenant is entitled to compensation for: 0

0

0

0 0

improvements silage, hay, manure left behind special systems or standards of farming (‘high farming’) disturbance (removal and related expenses) where tenancy is terminated prior to five years stored produce fixtures.

Compensation entitlements (landlord)

The legislation also provides some rights to compensation for the landlord. They are: 0 0 0

dilapidation or deterioration under tenancy agreement depreciation of holding due to incompetent husbandry methods breach of contract conditions

Disputes

Many of the disputes encountered during the terms of a tenancy can be resolved through arbitration undertaken by an agricultural committee which is made up of three people: an officer of the Department of Agriculture who is chairman; a person

CONTRACTS AND AGREEMENTS 69

nominated by the landlord from a panel of landlords; and a person nominated by the tenant from a panel of tenants. Those nominated persons will be selected by the district agronomist and appointed as arbitrators by the Minister for Agriculture. Those seeking to have a dispute arbitrated should be advised to contact the legal branch of the Department of Agriculture to obtain and complete a notice of dispute. Upon lodgement of the form, arrangements will then be made for the dispute to be heard and determined at a local courthouse which is not open to the public. Parties to the dispute may act for themselves or can be represented by another person who is not a barrister or solicitor. Often where demands are made or where action is required consistent with a dispute, a notice in writing is necessary to be served in compliance with the terms of the Act. Among the procedures permitted for service of notices is a method of serving the document on the agent of the landlord who collects rent from the tenant. General

Where the amount to be paid under a sharefarming agreement is unfair, an application may be made to the New South Wales Industrial Commission to have the matter resolved under the provisions of the Industrial Arbitration Act, 1941. The provisions of the Agricultural Holdings Act are complex and often confusing. The overview given has been designed to provide agents with a very basic knowledge of the legislation, however, it is again stressed that where an agent is approached by either party to arrange sharefarming agreements, they should immediately refer the party to a solicitor.

Important note: The Agricultural Holdings Act applies only to tenancies commencing prior to 1 May 1991. Since that date, such tenancies are controlled by the Agricultural Tenancies Act, 1990, however, the provisions of this new Act are somewhat similar to the superseded legislation. To demonstrate this similarity, and to provide an overview of the adjustments made, the following extracts from the second reading speech to parliament by the Minister for Agriculture and Rural Affairs concerning this legislation follows:

. . . ‘The new Act, Mr Speaker, continues the policies and principles of the old Act but removes obsolete and unnecessary material and material not relevant to New South Wales conditions. In particular, the new Act abolishes the complex notices and other provisions relating to tenants’ improvements and replaces them with a simple procedure. Improvements will be permitted to be carried out by agreement, and agreed, or fair compensation as arbitrated, will be paid. If there is no agreement an improvement may be carried out if first decided by arbitration or if it is an improvement listed in the schedule to the Bill or specified by regulation. Claims for compensation will continue to be heard and determined by an agricultural arbitration committee as a specialist tribunal and not by a court or any other tribunal. The provisions for a three member agricultural arbitration committee to hear and determine arbitrations of compensation will be continued. The arbitration committee’s jurisdiction will also extend to cover most of the disputes arising out of a sharefarming or agricultural tenancy agreement. This is a wholly new provision. The procedures will be continued whereby one member is nominated by the landlord from a panel of landlords, one member is nominated by the tenant from a panel of tenants, and one member is a legally qualified officer of New South Wales Agriculture and Fisheries who acts as chairman. Provision for these procedures will be contained in the regulations.

70 STOCK 81 STATION AGENTS' HANDBOOK New rights and duties are created by the new Act regarding the keeping and inspection of accounts and the reduction of sharefarming and agricultural tenancies in writing. New provisions are made prescribing, in the absence of the agreement of the parties, the periods of notice required to bring a sharefarming or agricultural tenancy agreement to an end. The new Act will apply to farms of one hectare or more held by a sharefarmer or tenant which are used or intended to be used for agricultural purposes. The current act applies to farms of 800 square metres but the opportunity has been taken to round this up to one hectare. Agricultural purposes are specifically defined in the Bill but it is the intention of the Government that this is to have a very wide meaning so as to include every type of agricultural purpose whatsoever. Similarly, tenancy is defined to include all arrangements whereby a person, not the owner, has a right to occupy a farm. In conclusion, Mr Speaker, I am delighted to introduce the Agricultural Tenancies Bill. It will have a very beneficial effect in the agricultural sector. It will extend the current system of dispute resolution by arbitration to most disputes arising out of sharefarming agreements and agricultural leases. This system of arbitration, outside the court system has proved to be a quick, cheap and fair method of resolving disputes and has the strong support of the farming community. . .'

CHAPTER 6 MERCHANDISI NG Stock and station agents operate a very diverse business. If they are not selling rural or pastoral properties, they may be selling a residential property in a town, an insurance policy or perhaps combs and cutters for the shearing shed. Many stock and station agencies offer a wide range of products, and those products vary according to the principal rural commodity available in particular districts. This chapter intends to deal with the matter of merchandising whatever the agent has to offer his client, whereby the client achieves satisfactory service and the agent achieves his aim of remaining in business. PROMOTING THE PRODUCT AND YOURSELF

There are some people who reflect that old adage of being someone who ‘could sell iceblocks to Eskimos’, however, while they may be successful in their initial sale, their ability to promote repeat business may not be so good. A stock and station agent needs to develop a reputation in the community as being reliable, honest and absolutely professional so that others will be referred to him by previously satisfied clients and customers. Not only is it essential that the agent demonstrates his own worth but he must also promote his services and products in a similar way to that which others employed in the selling business do. The promotion of any product is a complex task. Not only do people have to be told of the value of the product to them but the product has to perform and the purchaser must want to come back for more. Agents spend a lot of time and sometimes a lot of money on trying to get the message to potential buyers about the value of a commodity, and rightly so for unless these potential buyers know about the article, they can’t be expected to buy it. This highlights the necessity for ‘for sale’ signs to be erected outside rural and residential properties that are listed for sale. Once potential buyers have completed their purchase, it is essential that the product meets their expectations. Those expectations will stem from what the original promotion promised, whether from a glossy advertisement in the letter box or newspaper, the label on the product, a radio advertisement or what was said to the client by the agent. If repeat business is wanted (and it would be silly to think otherwise), then it is important not to create expectations that the product cannot deliver. There is a fine line here, because if the value of the product is undersold, the customer may not be attracted in the first place. It is always important to try to establish the customer’s expectations of a product, because in this way, the agent may be in a better position to satisfy those expectations. During advertising, a lot is often stated about the value of the product and its performance, but even when both these aspects are found to be true, there is still no guarantee of repeat business. Personal issues will sometimes cause customers not to return. Apart from discontent stemming from the unsatisfactory performance of the product, factors such as a lack of available parking, or personality differences with the agent may have 71

72 STOCK 81 STATION AGENTS’ HANDBOOK

an effect. However, there are also many factors which will cause customers to return although they may not have been satisfied with the product’s performance. Price and pricing policy can have a bearing on the return business of customers. They will return if they believe that they are getting value and good service, however, successful marketing can be a hindrance to some customers, particularly in the auction market. As success brings more customers and subsequent rises in price then there are those who will ‘drop by the wayside’ because they feel that they are being forced to pay too much. It is very important for an agent to be constantly aware that many customers will avoid patronising the business of a stock and station agent if they are given cause to believe that his honesty or ethics are questionable, regardless of the quality of the product. There is an important part of human nature that cannot be overlooked in business. People like to be associated with others who are successful or who are achievers. There is an advantage if that success is in the field of product marketing but this is not always essential. People like to be able to tell their friends of their association with people who are known to be successful. You know the scenario, ‘my barber’s brother lives next-door to so and so’. Similarly, people like to be associated with people who are well known. There is a marketing advantage connected to those who have a high profile in the community and a relevant industry. Consider how many people bought their herd of bulls from the ‘Prime Minister’ instead of Fraser’s ‘Nareen’ in the days when Malcolm Fraser was Prime Minister of Australia! Customers want their purchase times to be pleasant ones. They need to look forward with enjoyment to selecting or collecting a bull, a ram or some females. The same pleasant anticipation should also exist in the mind of the customer when he or she attends the stock and station agency to purchase some drench, fence droppers or perhaps some rock salt. If such meetings become a social occasion then they are then less likely to avoid them or be attracted to another agency. If these meetings are in any way unpleasant or impersonal, the customer will often find reasons in their own mind to justify not attending. In the final analysis, most purchasers will have a choice of suppliers. Where they choose to do business is more likely to be determined by convenience and personal factors than it is by some marginal economic advantage. Your promotion is not just about your agency’s merchandise and listed properties. STORE DISPLAYS

Among the many products that an agent may consider necessary to retain for retail purposes are commodities that have a limited shelf life, often denoted by an expiry date appearing on the product. It may also be the case that some items kept in stock for resale are of a perishable nature and do not display an expiry date. In these circumstances, it is absolutely essential that the agent devises and employs a competent rotational system to avoid financial loss being caused through unwanted retention of old stock. Agents should be diligent to ensure that only adequate stocks are kept to meet demand. Discounting or selling at old prices may be worth considering as a pricing policy to avoid being left with expired stock or stock which may have become less attractive than newer stock due to dilapidated or stained packaging. When deciding on the best exposure for merchandise retained for sale, any display stands used in the agency should be carefully placed to attract immediate

MERCHANDISING 73

interest from those who might have the impulse to buy because of special discounted prices or because the product is in constant demand by the rural consumer. In addition to providing the location within the store where the display will have the highest profile, the issue of security cannot be overlooked. While the majority of customers entering the agency may be entirely trustworthy and possess the highest integrity, there are still those who perhaps due to economic hardship, will shoplift. To avoid losses being caused through shopstealing, care should be taken to place items for sale in unobscured positions within the agency and away from the main door. It is better to prevent stealing than be placed in a position of financial loss or be confronted with the embarrassment of dealing with someone who has been caught. WINDOW DISPLAYS

The initial action taken by those buyers who are in the market to buy rural or residential properties generally is to scan the displays appearing in the windows of local agents. In this regard, stock and station agents should ensure that their window display is not only bright and attractive, but more importantly, it must be kept up to date. ‘Sold’ labels or stickers should be placed on those properties which have sold and should be removed from the window when appropriate to do so. Any properties which are withdrawn from sale should be removed from the window without delay. Any price adjustments notified by the vendor should be immediately applied as an amendment to details appearing in the window. Other forms of advertising-television, radio, newspapers, brochures and for sale signs are dealt with in other parts of this book. SALE AND STORAGE O F FARM CHEMICALS

In 1989, Avcare (formerly the Agricultural and Veterinary Chemicals Association Limited or AVCA) initiated an industry-wide accreditation programme to apply to the safe storage, handling, transport and sale of agricultural and veterinary chemicals from the place of manufacture to the point of sale to the end user. It later formed Agsafe, a wholly owned subsidiary to independently manage the programme. The Agsafe accreditation programme’s objectives are: to ensure that farm chemicals are stored, handled and transported in accordance with all statutory regulations or standards; and to ensure farm chemicals are only sold by individuals who understand the basic principles of safe and effective use of the products and the legal obligations for use consistent with label recommendations. Agsafe’s accreditation programme, in particular, personnel accreditation will be of importance to stock and station agents as it has a particular focus on reseller organisations, which includes those stock and station agents who sell chemicals such as dip, drench and/or weedicides and pesticides etc. Personnel accreditation involves training people who work with agricultural and veterinary chemicals. The following summary of the accreditation programme outlines the emphasis given to safety requirements within the industry and is taken from the training manual developed to facilitate the course:

74 STOCK & STATION AGENTS’ HANDBOOK

PERSONNEL ACCREDITATION Who must be Accredited?

All personnel who handle, sell, recommend, advise or take responsibility for the safety of farm chemical products from the point of manufacture right through to the point of last sale to the end-user. The accreditation of industry personnel is achieved as a result of the following: 0 0

successful completion of the accreditation training course; at least one year of experience in the farm chemical industry; and a commitment of compliance with the Agsafe code of conduct which sets out ethical industry standards and guidelines applying to the accreditation programme.

Accreditation Training

The basic training course covers all regulatory obligations and safety management practices appropriate to transport, handling, storage and use of agricultural and veterinary chemicals in Australia. Courses are available through either classroom study or private study. A current list of course providers is available from the Agsafe which can be contacted at the following address: Agsafe Limited PO Box 6066 North Sydney 2059. Phone [02] 925 0711 Fax [02] 955 0823 PREMISES ACCREDITATION

Premises accreditation aims to ensure that all storage premises for agricultural and veterinary chemicals in Australia comply with their regulatory obligations. These obligations include requirements of poisons, occupational health and safety, and environmental legislation, as well as dangerous goods storage and transport legislation. Which Premises Require Accreditation?

Agsafe recommends that all premises storing agricultural and veterinary chemicals become accredited, as it is likely that accredited premises will have a distinct market advantage over non-accredited premises in the industry. It has requested that the National Registration Authority endorse accredited premises as the only accepted outlets for registered agricultural and veterinary chemicals in Australia. However, it has been deemed that only premises storing registered agricultural and/or veterinary chemicals which are schedule 5,6 or 7 poisons and/or dangerous goods that are nor dairy sanitisers and cleansers or products exclusive to home garden use, in quantities that exceed limits recommended by Worksafe Australia for emergency placarding limits musr be accredited. The Trade Practices Commission Authorisation

The Trade Practices Commission, in a determination granted on 8 June 1994 has enabled the agricultural and veterinary chemicals industry to realise its commitment

MERCHANDISING 75

to trade only with those organisations which have relevant personnel and storage premises accreditation by Agsafe. The TPC authorisation provides the power to use industry self-discipline to enforce regulatory compliance-co-regulation. Such co-regulatory power enables the industry to position itself for a future in which there is no longer a commercial diadvantage in meeting safety obligations-quite the reverse, in fact. Agsafe is the neutral body through which trading sanctions can be applied. However, the procedures leading to the use of trading sanctions need to be initiated by members of industry. Appeals against Agsafe's Actions

The appeals process is included in the Trade Practices Commission Authorisation; to protect the rights of everyone in the industry; and to avoid expensive legal action in the protection of these rights. Lodging an Appeal

There are two situations in which appeals may be lodged: any person or organisation may appeal against Agsafe's refusal to grant accreditation or its withdrawal of a pre-existing accreditation. any person or organisation may appeal against Agsafe's failure to levy trading sanctions in a situation where it appears that trading sanctions should be applied. Steps in the Appeals Process

Step I : Appeal lodged with Agsafe. Council then seeks a mutually agreeable solution. i f a solution is not found within fourteen days . . . Step 2: Appeal passes to Agsafe Board which must seek a mutually agreeable solution.

i f a solution is not found within fourteen days . . . Step 3: Appeal pases to a conciliator where a mutually agreeable solution is sought over fourteen days. If a solution is not found, then the conciliator will determine the outcome. Cost of Appeal

There is no cost for the first two steps in the appeals process. The Australian Commercial Disputes Centre will provide a conciliator when necessary at a cost of $200-$300 per hour. Payment for the conciliator is determined by the outcome of the appeal: if resolved in favour of the appellant, Agsafe pays; 0 if resolved in favour of Agsafe, the cost is shared equally. SERVICE I S THE AGENT'S PRINCIPLE PRODUCT

The stock and station agent sells stock food, hats, boots and a whole host of other rural needs which vary according to the geographical location of the agency but the agent always finds that his highest remuneration comes from the commission earned from the sale of real property. The agent does not possess nor control real estate. His or her product is service. As a professional, the agent offers his or her services to clients. The agent proffers his or her knowledge, training, experience, judgement, prudence and skill to further their aims and to protect and promote their interests.

76 STOCK & STATION AGENTS’ HANDBOOK

WHAT DO CLIENTS EXPECT ‘PSYCHOLOGICALLY’ FROM THE SERVICE GIVER? Clients need to feel that they are in control of the situation. They need to feel assured that they are not being taken advantage of, manipulated or being deceived. Their self image has to be protected. They like to think of themselves as doing the right thing. They must be assured that they are intelligent and competent human beings-not foolish or silly. A competent agent will ensure that these client’s needs are maintained if they want to be successful in the community and enjoy a high regard amongst clients, former clients and their families and friends. Selling is a people business and for an agent to survive in the business means that he or she must satisfy the needs of the clients, particularly in the area of competent and professional service. THE RIGHT APPROACH It is essential in the selling business that the right approach is practiced by the agent on every occasion. Having the ‘right approach’ means to most people the most acceptable, friendly and positive approach’. Talking and acting with enthusiasm and encouragement are key factors to the right approach. Words like, ‘That is interesting, tell me more’ are often used to show the client or customer that the agent is supportive. Other words like, ‘That must be frustrating’ show that the agent understands how they feel. All such comments when used appropriately will provide a warm hearted feeling between the agent and the client or customer which in turn contributes towards trust in the agent. This trust is something that all successful agents know they must achieve when effectively negotiating sales. Having the right approach also means that an agent must give his or her personal service to their clients. They must go out of their way to make each client feel that they are the most important person to meet with the agent or to come into the agency that day. Clients like to feel that they are popular and that their custom is appreciated. If they sense negative feelings towards them, then it is quite likely that they will seek appreciation from another agent. Any risk that a client may sense a negative feeling can be initially dispelled by the agent retaining a cheerful approach, smiling and being willing to assist. It is extremely important to make a good impression. It is worth remembering in view of the foregoing that a person can only be greeted once and the form of that greeting sets the tone for ongoing conversation to follow. In conversation, clients expect: Friendliness-They like agents (their service givers) to be friendly and warm. They like to feel good about those with whom they do business so that a pleasant relationship can be enjoyed. Understanding-They get frustrated and angry when they can’t get the information that they want. They like to know what is happening and why. They prefer to have things fully explained and not glossed over. Belonging-Clients like the feeling of being a regular customer and ‘belonging’ to that organisation. That feeling of belonging is highlighted when they are greeted by name and their affiliation is acknowledged. Honesty-Clients have a strong need to feel that they can trust and have confidence in the people that they do business with.

MERCHANDISING 77

Approval and Recognition-They like praise and recognition by others. These ingredients are amongst the most powerful motivators that an agent can use. Importance-All clients like to feel that they are important and essential. They like prompt and exclusive attention. Appreciation-They like to feel appreciated and to know that their business is valued and appreciated. RECOGNISING A CLIENT’S INTENTION It is important for an agent to realise that before leaving home, a client has made two decisions: 1. What they are interested in; and 2. Where they intend to get it. When they enter the agency, it must be assumed that the client’s action is consistent with decision ‘2’ and they then should be considered a ‘hot prospect’ and are half-way to buying. Bearing this assumption in mind, an agent must rely on his or her people skills and merchandising technique to secure the custom of the prospect. Without appearing too forceful or pushy, the agent should always: find out what caused the interest find out how much they already know avoid telling all he or she knows; but enough to make the sale. Clients are afraid of not achieving two things; 1. making the right choice and 2. getting value for money The agent must, therefore convince the client that his merchandise represents both these things. People are generally not fools and will recognise ‘flashy’ insincere sales people. The agent must tread carefully and not overdo his or her approach. Although many products will sell themselves whether by design, labelling or reputation, most people will need convincing that they have made the right choice and that they are getting value for money. It is up to the agent to tell them so. It is worth remembering that private research in this field has shown that 94 per cent come in to buy. If not immediately, they will buy in the very near future. Eight out of ten won’t buy unless they are asked and also, 96 per cent of sales people fail to ask for the order. Whilst these statistics were not obtained from stock and station agencies, they are, none-the-less applicable to agencies where rural commodities are sold. THE ‘ART’ OF SELLING In reality, professional sales people do not sell, they get people to buy. To illustrate the point, while many buyers have an idea what they want, they have difficulty clarifying it in their own minds and expressing it clearly, and it takes the skill of the sales person to remove that confusion and simplify the task of the buyer to freely define his or her needs.

78 STOCK & STATION AGENTS’ HANDBOOK

The secret in achieving this result is to create conversation and to encourage people to talk. The only way that this can be achieved is to ask questions beginning with ‘who-what-when-how-where’. The answers to these questions will reveal the needs of the buyer thus allowing for the seller to assist the buyer in achieving his or her aim or requirement. Above all, the greatest attribute of a professional sales person is to possess the art of listening. Many prospective buyers are repelled by sales people who do not listen to the buyer. Not only are prospects irritated by those who at the slightest break in the conversation, insert their own personal view without displaying any obvious sign that they have been listening to the buyer, but by their very behaviour, have failed to identify the needs of the prospect. Selling really requires an agent to possess five basic and fundamental skills. To expand on that statement, each of these fundamental skills will be outlined as basic selling steps for greater clarification. CONNECTING

This means to establish a personal bond and to maintain good eye contact. The agent must adapt himself to the client through understanding the client’s speech and gestures. It may be that the agent’s own speech and gestures should be tempered or adjusted to suit the mannerisms of the client. The agent must build a rapport through a pleasant approach, a smile and small talk. ENCOURAGING

This aspect of selling keeps the client involved and does not give the client or customer a feeling that he or she is being excluded. This could be divided into the following areas: reinforcing through verbal or non-verbal signs; empathising by showing understanding of the client’s situation; and accepting through constant indication that you have received the information. QUESTIONING

Asking questions in the right way gets you the right information. It will uncover many problems and needs of the client or customer. Armed with this information, the selling process can then be pursued. There are two different types of questions:

1. Open questions which are those which concern who, what, when, where, why and how; and 2. Closed questions which are those which invite an answer of yes or no. Through a developed questioning technique, the agent will find a need or uncover a problem. In this regard, he should:

0 0

never come straight out with a solution; recognise the need; expand the problem; when providing solutions, speak benefits-not never be concerned about cost.

features; and

MERCHANDISING 79

CONFIRMING

To confirm means to focus on a particular need or problem. Once this has been done, discuss the issue with the client or customer fully and then summarise during the conversation. This in effect allows them to appreciate that the agent has a thorough understanding of the need or problem. PROW DING

This is a very important step in the selling process. It creates a positive image of the agent and the stock and station agency. This step allows the agent to show the benefits of his or her superior service or the benefits of obtaining particular products through himher which will satisfy the client or customer’s needs. When showing benefits, it will be necessary for the agent to explain certain aspects of the service or product and when doing so, he or she should remember to speak concisely, and keep to the point so that the client or customer will fully understand. Obviously, when providing, the agent should not be half hearted in his or her approach. Agents should show enthusiasm, as this will breed confidence in the mind of the client or customer, concerning both the product and the agent. If confidence is maintained, satisfaction is assured and the agent can benefit through return or referral business. HANDLING OBJECTIONS An agent will need to be able to handle objections from customers about the performance of a commodity. They do their image immense harm if they are unable to deal properly with these complaints. To assist agents in this regard, the following suggestions are made: 0

Ask questions about their complaint. Gather as much information as possible as this will decide the appropriate action to be taken. If the client is under a misconception about what a product such as an agricultural treatment should or should not do, the agent will have to clarify the situation. If the client is sceptical that what he has been told is not right, the agent will have to show proof. If the objection is a genuine complaint and the agent is clearly at fault, he or she must take immediate action to rectify the matter.

HANDLING THE ANGRY CLIENT-FACE

TO FACE

Whenever and wherever an agent encounters an angry client, it is often difficult to deal properly with the situation where the agent and the client are face to face. The following tips have often been tried with success. Encourage the client to talk. Speak quietly to the client, keep calm and don’t interrupt. Show empathy perhaps by saying, ‘I understand’ or ‘Tell me more’ but Use that empathy without agreeing. The more they talk, the less angry and more rational the client or customer is likely to become.

80 STOCK & STATION AGENTS’ HANDBOOK

CONTROLLING THE ANGRY PHONE CALL

Although an agent may appear to have the most efficient agency in a district, there are still occasions where angry telephone calls are received. Although the agent may confront the urge to hang up the receiver during the verbal abuse, nothing can really be gained by such action. To react angrily can only serve to further infuriate the caller where he or she may prematurely terminate the call. Self discipline on the part of the agent is called for in these cases, as he or she may be able to settle the anger and keep a client happy. In these circumstances, it pays to remember: The longer people are angry, the angrier they become. Do not try to talk logic to people when they are venting their anger, as their fury will prevent them from hearing. To overcome a situation involving an angry telephone call, the agent should remember these six basic steps:

1. 2. 3. 4. 5. 6.

Vent: let the caller talk for a maximum of fifteen to twenty seconds. Interrupt: then interrupt quietly with their name. Validate: agree and advise that the anger is understandable. Lower voice: empathise, then move to slow conversation. Slow down: this allows for notes to be taken about the issue of concern. Problem solving: coolly and rationally move to rectify their concern.

CONSUMER LEGISLATION

Apart from some laws relating to licensing issues which apply to areas where commodities are sold, the principal pieces of legislation applying to such sales within New South Wales are the Sale of Goods Act 1923 and the Trade Practices Act 1974. Although the first is State legislation and the second Commonwealth, the Acts are designed to protect consumers and complement the common law. Other States have sale of goods legislation also based on common law rules and mercantile law. Matters directly relevant to the responsibilities of a stock and station agent have been identified within these Acts and from the common law and are briefly summarised hereunder: Implied Warranties. 0

0

sellers have the right to sell goods buyers are entitled to quiet (undisturbed) possession goods are free from encumbrances of a third party.

Implied Conditions 0

0

0 0

sellers have a duty to sell goods that correspond with descriptions (labels or spoken) sellers have a duty to supply goods which are of merchantable quality sellers have a duty to supply goods which are fit for their purpose sellers have a duty to supply goods which correspond with samples.

Bait Advertising

This is a dishonest practice where certain commodities are advertised at an extremely low price and either none or only a small number of these items are in stock at that

MERCHANDISING 8 I

price. It is designed to attract customers on the pretence that large quantities of the advertised items are available. Having baited the customer, the supplier then attempts to ‘switch’ the customer to normal lines or to a more highly priced line. This is illegal and the law provides severe penalties for offenders. Deceptive Conduct

Conduct likely to mislead or deceive is also prohibited under consumer law. The Oxford Dictionary defines the word ‘mislead’ as ‘to lead astray in action or conduct; to lead into error, to cause to err’. The same reference source defines the word ‘deceive’ as ‘to cause to believe what is false; to mislead as to a matter of fact, to lead into error, to impose upon, delude, take in’. The law not only provides consumer protection to the public but also extends to protect competitor against competitor and business against business. Other related matters are covered by the law, such as unconscionable conduct and false representations. Definitions of these terms are obvious and need no further comment. Of course, the extent of the false representation may result in a criminal prosecution under the Crimes Act 1900 whereby penalties can extend to penalties of imprisonment.

CHAPTER 7 RURAL FINANCE, STOCK AND PROPERTY MORTGAGES, LIENS AND AGENCY CREDIT CONTROL In this chapter, stock mortgages, property mortgages, wool liens and crop liens will be discussed along with credit control. All these issues are interconnected and it is essential that the stock and station agent has a thorough understanding of their relevance to rural agency practice. Without such an understanding, the agent can be expected to experience financial problems which may seriously affect hisher ability to continue trading or operating. RURAL FINANCE

Primary producers may from time to time require credit for a wide range of purposes and there are a number of sources and types of rural credit available to them. It is important that the stock and station agent has a working knowledge of these issues to allow h i d h e r to discuss with clients their financial needs and to provide some advice on where they should direct their inquiries to meet those financial needs. Within the State of New South Wales, rural finance can be obtained from a number of areas but the major sources of rural credit are: trading banks Commonwealth Development Bank of Australia Primary Industry Bank of Australia NSW Rural Assistance Authority (Commonwealth and State funded schemes) finance companies pastoral finance companies merchant banks private finance From each source, different loan types, term conditions and interest rates generally apply to be appropriate to the purpose of the loan application. Before arranging finance, borrowers should establish details concerning current charges that particular loans attract as interest rates and rural lending policies are regularly subject to change. It would be appreciated that appropriate legal or accounting advice may be necessary before the primary producer enters into a credit transaction. This is of particular significance where private finance is being provided to farmers and graziers by stock and station agents. Although it is traditional for farm finance to be sought from the larger institutions (banks, pastoral and finance companies etc), there are occasions where short and medium term finance is provided by agents and accordingly, before approval of finance is given, consideration should be given to such things as: 1. The purpose for which finance is sought; 2. The amount and term of the loan; 3. The security and equity available; and 4. The character and managerial ability of the applicant. 82

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It is crucial to the financial survival of the stock and station agent that such considerations are properly assessed before agreeing to provide finance. STOCK MORTGAGES

Stock mortgages are among the traditional securities given by a grazier to his or her lending institution in consideration of a loan being advanced. In effect, the stock mortgage means that the grazier assigns all hisher right, title and interest in hidher livestock to that lender who then has security for the moneys advanced to the grazier. The practice of graziers borrowing against such security dates back to 1843. These types of credit contracts give mortgagees the right to enter the property at any time to inspect the stock. Where non-payment of the debt is encountered and it is necessary for the mortgagee to exercise the powers of the mortgage, that mortgagee can also seize and sell the stock to satisfy the debt and charge all costs including transport, legal and selling expenses against the mortgagor. In the event of these proceeds being insufficient to cover the debt and expenses, the mortgagee, then being an unsecured creditor, can sue the mortgagor for any balance. The stock mortgage provides for all proceeds of wool and stock sales to be paid to the mortgagee and it establishes the mortgagee’s right to charge interest on advances. As a mortgagee becomes a secured creditor for the amount equivalent to the value of the mortgaged stock, the mortgagee has a preference over other creditors (to the value of the stock) in the event of the death or bankruptcy of the mortgagor. Such an event places the mortgagee in the same position as in circumstances of non-payment and provides an entitlement to recover the remaining amount as an unsecured creditor. Unfortunately, although stock mortgages legally bind a mortgagor not to dispose of the stock which are the subject of the mortgage without the consent of the mortgagee, it is not uncommon to hear of situations where the grazier acts in contravention of the mortgage agreement and retains the proceeds of the sale of the stock. In these circumstances, the normal practice is for the mortgagee to demand full settlement of the debt and where necessary, institute legal action to secure repayment of the loan. Where there is no provision for stock acquired after registration, apart from natural increases from the livestock listed in the mortgage document, and such stock should be subject to the powers of the mortgage, it is usually necessary to take a fresh stock mortgage which will include the additional (or after-acquired) stock. A valid stock mortgage requires that it must be made in good faith and for valuable consideration and it must be duly registered with the Registrar General within sixty days of the date shown on the document. It can, of course, be registered as soon as possible after execution to guard against: early demise of the mortgagor; or another mortgage being registered which would take priority as Stock Mortgages are priority ranked according to the date of registration.

In New South Wales, the Liens on Crops, Wool and Stock Mortgages Act, 1898 only covers mortgages over sheep, cattle and horses. The Act does not cover pigs or goats, which should be registered under a bill of sale. When completing stock mortgages, certain particulars must be set out in any documentation, otherwise the Registrar General may reject it when registration is attempted. Those particulars are:

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1. The date. 2. The full names and addresses of the parties. 3. The consideration including the current interest rate. 4. Accurate details concerning the mortgaged stock, including; (a) number of stock (b) age of stock (c) sex of stock (d) whether mated or unmated (e) breed of stock (eg, Merino ewes or Hereford cows) (f) for sheep, month of sheering (g) registered brands and ear