PPS refresher: Key risks and exposures for agribusinesses in 2026

Anyone working in agriculture would know the incredible value of the land they farm, the farm inputs they supply, the crops they grow, the animals they raise, and the equipment they use to produce great products. But through our experience representing farmers and agribusiness clients, we’ve found that these valuable assets, so vital to the operations of the business, are often left exposed because they have not been securely registered as “personal property”.

For Australia’s agricultural sector, the Personal Property Securities Act 2009 (Cth) (PPSA) and the Personal Property Securities Register (PPSR) remain critical tools for securing interests in crops, livestock, equipment and other non‑land assets. Yet despite the regime being in place since 2012, many agribusinesses continue to face significant avoidable risk.

Below is a practical refresher on how the PPS regime operates, together with the most important risks agriculture businesses need to address now.

PPSA basics: Why it matters for agriculture

The PPSA governs how security interests are created, perfected and enforced over personal property, including crops, livestock, machinery, irrigation systems, produce, farm inputs, and goods sold on credit.

The PPSR functions as the national public noticeboard where these interests are registered.

Registration:

• costs as little as $7
• commonly lasts for seven years (but can be more), and
• ensures a business ranks as a secured creditor if a customer becomes insolvent.

PPS protection is essential for agriculture businesses because assets often move between parties, are mixed with other goods (such as commingled grain), or are sold on extended payment terms.

PPS arrangements: Common risk areas in agribusiness

1. Failing to register Retention‑of‑Title (ROT) interests

ROT clauses located within terms and conditions or supply contracts no longer protect suppliers on their own. If you supply goods without lodging a PPSR registration, another creditor with a perfected interest will rank ahead of you.

Exposure: You become an unsecured creditor if a buyer becomes insolvent. This means that often, you’ll recover nothing.

2. Exposure when leasing or bailing livestock, machinery or stock

Leases or bailments for over two years, or for shorter terms that actually exceed two years in real-life (e.g. stud cattle or agricultural machinery), commonly create “PPS leases”.

Exposure: If your ownership interest is unregistered, the lessee is treated as the owner for insolvency purposes (notwithstanding the intention of a ‘lease’), and you can lose your asset.

3. Commingled or processed goods (e.g. grain, milk, wool, processed produce)

Once goods are mixed, they lose individual identity, such that it can’t be separated back out. PPS security only attaches to your proportionate share in the commingled bulk if you registered correctly.

Exposure: Without PPSR registration, your claim in respect of commingled goods may evaporate entirely once goods are mixed or processed, or your claim may be reduced.

4. Second‑hand equipment and machinery purchases

Searches (eg, by VIN or serial number) protect buyers from taking goods subject to existing finance or a secured creditor’s claim.

Exposure: Failure to search may mean repossession of equipment you’ve already paid for.

Financing and priority risks

Many agri‑businesses borrow against crops, livestock and equipment, all of which are treated as “personal property” under the PPSA.

Financiers typically hold either:

• general security interests over ALL business assets; or
• specific security interests over livestock, crops or equipment, or the specific goods they’ve supplied.

If suppliers, contractors or share‑farm partners fail to register their own interests, the bank’s general security interest will usually take priority. This can entirely eliminate the claims of suppliers in an insolvency scenario, whereas registration mitigates this risk.

Why agriculture businesses are particularly exposed

Agriculture often involves a high movement of goods, mixing of commodities, long payment lead times, significant use of leased machinery reliance on long supply chains, and increased economic, weather, seasonal and geopolitical volatility.

These characteristics make the PPS regime central to risk management. Yet PPS compliance remains inconsistent across the sector.

Practical steps for agribusinesses in 2026

• Review and update all T&Cs, supply agreements, lease agreements and credit applications.

Ensure they reflect the current laws and support uploading valid PPS registrations.

• Audit existing PPSR registrations

Check collateral class descriptions, grantor details, serial numbers, and registration timing periods, etc.

• Register all ROT, consignment, lease and supply interests.

Assume that unregistered rights = unsecured rights.

• Search the PPSR before buying second‑hand machinery.

Avoid inadvertently purchasing encumbered assets.

• Map your supply chain to identify commingling risk.

Grain, milk, wool and other pooled commodities carry higher PPS complexity.

PPS compliance is mission‑critical for agriculture

As the agricultural sector enters a period of structural reform and heightened commercial risk, PPS compliance shouldn’t be optional. Registration should form a key part of your credit application and trading process.

If you need support ensuring your security interests are properly documented, registered and maintained, you can contact one of our Agribusiness lawyers for support. Our team has intimate experience working alongside businesses within the sector to ensure their products and assets are protected.

Contact our team today for advice.

The information contained in this article is general in nature and cannot be relied on as legal advice nor does it create an engagement. Please contact one of our lawyers listed above for advice about your specific situation.