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Contract Farming and The Law:: What Do Regulators Need To Know?

This document provides an overview of contract farming, highlighting its legal aspects and the importance of regulatory frameworks for ensuring fair and secure agricultural production agreements. It emphasizes the roles of producers and buyers, the formation and obligations of contracts, and the significance of clear communication and cooperation between parties. The document also discusses various regulatory approaches and best practices to enhance the effectiveness of contract farming relationships.

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0% found this document useful (0 votes)
10 views8 pages

Contract Farming and The Law:: What Do Regulators Need To Know?

This document provides an overview of contract farming, highlighting its legal aspects and the importance of regulatory frameworks for ensuring fair and secure agricultural production agreements. It emphasizes the roles of producers and buyers, the formation and obligations of contracts, and the significance of clear communication and cooperation between parties. The document also discusses various regulatory approaches and best practices to enhance the effectiveness of contract farming relationships.

Uploaded by

mutum singh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Contract farming
and the law: What do regulators
need to know?

What is contract farming? Purpose of this brief


At the heart of contract farming is an agreement between This brief aims to help regulators and policy-
farmers and buyers: both partners agree in advance on the makers to achieve a correct understanding
terms and conditions for the production and marketing of of the legal aspects of contract farming (CF).
farm products. These conditions usually specify the price to It is based on information extracted from the
be paid to the farmer, the quantity and quality of the prod- Legal Guide on Contract Farming (UNIDROIT/
uct demanded by the buyer, and the date for delivery to FAO/IFAD, 2015), and from field experience
buyers. The contract may also include more detailed infor- in the implementation of contract farming
mation on how the production will be carried out or if any projects by the Food and Agriculture Organ-
inputs such as seeds, fertilizers and technical advice will be ization of the United Nations (FAO).
provided by the buyer.

PART 1
WHY IS THE REGULATORY FRAMEWORK IMPORTANT FOR CONTRACT FARMING?
Appropriate regulatory frameworks are instrumental for clear and balanced CF operations. Legislation
recognizes people’s rights and protects those rights. It gives security to contractual relations and clari-
fies the mechanisms available to facilitate agreed solutions.
From a public policy viewpoint, legislation brings stability to agricultural policies, because laws – by
the nature of their creation process – are difficult to change. For the parties involved in CF, this sustain-
ability and enforceability of rights provides legal security. They know that their legal rights and obliga-
tions will be respected and that they will remain constant in the future. This can give them the peace of
mind they need in order to enter into an agricultural production contract.
There are different possibilities for regulating CF. Some countries regulate CF through general contract
or agricultural legislation, whereas others introduce CF provisions in commodity based legislation, or
enact specific CF legislation. Contractual practices might also be governed by other sources, including
legal principles, customary rules, usages and practices.
There is no one best regulatory solution to facilitate CF. The most appropriate regulatory and policy
framework will depend on the national policy and regulatory objectives, the existing legislation and
legal tradition.
©FAO/Florita Botts

PART 2
BOX 1 CONTENT OF THE LEGAL GUIDE
The Legal Guide
on Contract Farming 1. Regulatory frameworks for contract farming
To help understand CF, the Legal Guide discusses the international and
national legislation that may have an effect on the CF relationship.

A) The applicable private law regime


Contracts will normally specify the national legislation which governs
UNIDROIT FAO IFAD

them, an issue that may be particularly relevant in an international con-


text. In these cases, the Legal Guide suggests that the law of the coun-
try where the production takes place commonly serves everyone’s
Legal Guide on contract farming

interests the best. It generally best takes into account the national cir-
cumstances and is also the most familiar for the producer. In addition to
UNIDROIT FAO IFAD national legislation, countries may find relevant regulatory frameworks
Legal Guide on in regional harmonization initiatives, such as the legal framework of the
contract farming Organization for the Harmonization of Business Law in Africa (OHA-
DA), in Box 2.

BOX 2
CF under the legal framework of the Organization for the
The International Institute for the Uni- Harmonization of Business Law in Africa OHADA
fication of Private Law (UNIDROIT),
the Food and Agriculture Organiza- OHADA is an international entity currently comprising of 17 member
tion of the United Nations (FAO) and states in Central Africa, West Africa, and the Indian Ocean. OHADA
the International Fund for Agricultural aims to ensure legal security for economic activities and to stimulate
Development (IFAD) collaborated to investment.
develop the UNIDROIT/FAO/IFAD Legal OHADA has enacted nine uniform acts, some of which cover aspects
Guide on Contract Farming (the Le- of CF. The legal structure of parties is determined by OHADA law. The
gal Guide). The Legal Guide provides pledge of farming products to a food industry in exchange for financ-
guidance on the elements that should ing will be covered by the OHADA uniform act on securities. The trans-
be incorporated into an agricultural portation of farming products by road will be covered by the provisions
production contract. It analyses all the of OHADA uniform acts. Disputes arising from CF can be submitted to
elements of the contract throughout official courts and, in that case, the common court of justice and arbi-
the contract life cycle and thus helps tration – the common Supreme Court for the 17 member states in mat-
to build trust between the parties and ters related to the application and interpretation of OHADA law – may
support mutually beneficial relation- intervene. For arbitration, OHADA has a uniform act on arbitration and
ships. It is a useful tool and reference also a specific arbitration system located in the common court of justice
point for a broad range of users in- and arbitration.
volved in CF practice, policy design,
legal research and capacity-building. OHADA is heading towards a more extended coverage of CF. Work cur-
The Guide is freely available on the rently under development is focusing on several aspects relevant for CF,
websites of FAO, UNIDROIT and IFAD. including an instrument on commercial mediation, work on developing
leasing, private public partnership contracts, and joint venture.
Source: UNIDROIT/FAO/IFAD, 2017.
Source: UNIDROIT, 2014.

2
Contract farming and the law
What do regulators need to know?

B) The role of the regulatory A) Parties to the contract


environment CF normally occurs between two BOX 3
Besides legislation directly reg- main parties: the producer and Cooperatives and inclusive
ulating the agricultural produc- the buyer. To participate in CF, agribusiness models in the
tion contract, many other laws producers may group together in Philippines
and regulations will influence its producer organizations, but they
formation and implementation. can also participate independently. Through its inclusive policies, Unifrut-
ti, a private company exporting, pro-
Competition laws, labour laws, Producer organizations (cooper-
cessing and producing pineapple and
and legislation on agricultural in- atives, associations, etc.) can great-
banana in the Mindanao Region, has
puts, intellectual property rights ly increase producers’ bargaining
managed to make positive changes in
or food safety and quality, among power, achieve economies of scale,
the livelihoods of the rural communi-
other areas, may condition the and have a strong advocacy role. ties involved, while simultaneously be-
content and implementation of This could also bridge the power ing profitable.
agricultural production contracts. imbalance between producers and
buyers. See Box 3 for an example Four lessons of good practices for in-
CF relationships can also be in- of a successful business model us- clusive CF schemes can be identified
fluenced by international human ing agricultural production con- from the experience. First, rural com-
rights obligations, which are rele- tracts with cooperatives from the munities may need assistance to take
part in the venture. Second, produc-
vant not only for states but also for Philippines.
ers’ associations are fundamental both
businesses. Participation, account-
for engaging more efficiently and on
ability, empowerment, non-dis- The buyer is the party commis-
a more level playing field with buyers,
crimination, transparency, human sioning the production, often pro-
and to generate additional benefits for
dignity, and the rule of law are viding inputs, guidance, and con-
the communities involved. Third, open
some of the most important gen- trol. The buyer might be a private dialogue and timely communication
eral principles in relation to CF. business or a public entity. during contract negotiation and im-
The Human Right to Food has an plementation can develop a high de-
especially important role, as does Third parties may participate in gree of trust, which is essential for a
the protection of women and oth- the contract. They can provide mutually successful relationship. Final-
er vulnerable parties. loans and services and play other ly, both producers and buyers should
supporting roles. share risks unique to their roles, and
mutually support each other.
»» CF operations are commonly B) Contract formation
governed by the law of the As with all contracts, the agricul- Source: FAO, 2015a.
country where the production
tural production contract is made
takes place.
»» Besides rules directly applica- up of an offer and an acceptance.
ble to CF, also the wider legal The offer should preferably be
framework may also have an ef- submitted in writing and in clear When all stages of formation are
fect on CF operations. Human language, and generally comes conducted fairly, in a transparent
rights obligations, for instance, from the buyer during contract manner, and in good faith, a foun-
must be respected by both the negotiations. It may be beneficial dation of trust is created for the
state and the parties. to allow third parties, especially CF relationship.
producer organizations, to partic-
ipate in the negotiations to balance C) Contract form
2. Parties, formation and form contractual power. In many jurisdictions, contracts
Contract farming is a mechanism are not subject to any requirements
that creates mutual benefits for the The parties must know what they concerning form or content. Oral
parties – the producers and the buy- are signing. Lack of informed contractual arrangements can be
er. The formation and the form of consent may render the contract admitted in legislation. Neverthe-
the contract have a great impact on void, so it is very important to less, written contracts with eas-
the future of the CF relationship. ensure that the producer under- ily understandable language are
stands the contract. recommended as they improve

3
Asier_relampagoestudio (Freepik)

clarity, completeness, enforceabil- ing for a part of it allows both are the various services pro-
ity and effectiveness. parties some degree of autonomy vided by the buyer, such as
in marketing decisions, without tilling the producer’s land.
breaching their contractual obli- Another form of input is the
»» Producers can participate in CF gations. financing provided directly
either individually or as a group,
by the buyer, for example
for example through producer
organizations.
B) Production process in the form of advance pay-
»» Producer organizations can be i) Production methods, ments. The contract typical-
instrumental in improving a con- compliance and control ly has requirements on how
tractual relationship between Cooperation between the the inputs are to be used. The
the producers and buyers. parties is important to make producer generally must
»» A producer’s acceptance of a CF successful. Cooperation pay for the inputs by having
buyer’s offer is enough to create requires fair behaviour and their price deduced from the
a binding contract.
timely and diligent action to final contract price.
»» Written contracts facilitate clar-
ity, completeness, enforceability
support, communicate, and
and effectiveness. provide advice for the other C) Delivery
party. This is especially im- Delivery is a key moment in
portant when the buyer has the performance of the con-
a great level of control over tract. The buyer’s obligation to
3. Obligations of the parties the producer’s agricultural take delivery of the goods and
The Legal Guide discusses the ob- production processes. the producer’s obligation to de-
ligations of the parties and offers liver them are basic obligations
best practices on ways to organize Compliance with specific in any CF relationship. With
them. Particular attention is paid standards or procedures delivery, the ownership and the
to the kinds of obligations which during the production pro- associated risks for the product
are likely to cause disputes and cess is connected to compli- generally pass from the produc-
may require the national regula- ance with quality obligations er to the buyer. Delivery also
tor’s attention. at delivery. The contract may triggers the buyer’s obligation to
require specific quality char- pay the price.
A) Quantity and quality acteristics in the final prod-
of the product uct, or the use of special pro- The buyer may have an obliga-
CF can contribute to better qual- duction methods, such as fair tion to inspect the product at
ity of agricultural products, es- trade or organic production. delivery. If the buyer does not
pecially when the buyer provides In the case of organic prod- inspect, he or she might lose the
quality inputs. Product quality can ucts, for instance, producers right to remedies for any appar-
be improved through a producer’s will need to have their farms ent defects. To guarantee trust in
obligation to meet requirements certified. Certification can be the inspection, the producer or a
as specified in the contract. Third done by a third party organ- third party should be allowed to
party certification of the product ization or under alternative be present when the products are
or the production process can arrangements, such as partic- inspected.
help to ensure that these requisites ipatory guarantee systems.
are met. D) Price
ii) Inputs Price is a crucial element in any
The parties can contract either for Inputs are often provid- agricultural production con-
the producer’s entire production ed by the buyer and can be tract.
or a part of the same, depending physical, such as seeds and
on their needs and preferences. pesticides, or non-physical, There are different methods to
Contracting for the total produc- such as technical assistance calculate the price. Some of the
tion reduces market uncertainty and know-how. An example most common ones are fixed
for the producer, while contract- of the non-physical inputs prices, or variable prices depend-

4
Contract farming and the law
What do regulators need to know?

4. Excuses for non-performance


BOX 4 The CF relationship can be dis-
Pricing strategy for rubber in Ghana rupted by an event outside the par-
ties’ control, or the circumstances
Ghana Rubber Estates Limited (GREL) uses CF to source rubber. The CF scheme
surrounding the contract can dras-
currently includes 5 450 farmers with a total plantation area of about 21 500
tically change. Force majeure and
hectares. The agreement between the producers and GREL includes an innova-
change of circumstances are possi-
tive price mechanism.
ble legal responses for these events
Producers’ representatives engage in annual price negotiations with GREL. The and changes.
price is indexed on the Singapore Commodity Exchange and set at 64 percent of
the prevailing monthly average price. A second payment is foreseen at the end Force majeure and change
of the year, based on the real rubber the producers deliver. GREL deduces fees of circumstances
for extension services and transport, for loan repayment, for Rubber Outgrowers Excuses are legal responses pro-
and Agents Association’s annual membership fee, and 4 percent as savings for vided by law or by the contract,
capital accumulation on behalf of the farmers, which is refunded to them at the
which can justify a party’s failure
end of the year.
to fulfil its contractual obligation.
The pricing formula represents a good practice. As it is linked to international
rubber prices, it protects producers against falling prices, and allows them to Intervening events – such as
repay their loans more quickly when prices rise. Open dialogue and transparency floods, riots, or strikes – may
in price setting enables producers to understand the price structure and to rec- have an effect on the parties’ abil-
ognize that the price depends on what the market are willing to pay. ity to perform. When these events
are unpredictable, inevitable and
Source: FAO, 2013a. beyond the reasonable control
of the parties, the parties may be
able to rely on legal concepts such
as force majeure.

»» In CF, the parties’ obligations are interlinked – one party’s performance de- During the life of the contract,
pends on the other party’s compliance. the circumstances surrounding
»» The producer’s main obligation is to produce following the specifications
the contract may also change in
agreed upon in the contract and to deliver the product to the buyer.
»» The buyer’s main obligation is to take delivery and pay the price. a way that goes beyond the risks
contemplated by the parties at the
time of entering into the contract.
If this makes one party’s perfor-
ing on market changes or per- To ensure that both parties trust mance significantly more diffi-
formance measurements. Fixed that the prices paid have been cult, the affected party may be
prices do not necessarily have to fairly established, the producer or able to rely on the legal concept
be a set monetary amount, but a third party should be allowed to of “change of circumstances”.
they may also refer to the mar- verify all information used in the
ket price at the time of delivery, calculations performed. When an intervening event hap-
or to other objective indicators. pens or circumstances change
Ultimately, it is up to the parties Regardless of how the price is cal- dramatically, it is often beneficial
to choose the price setting meth- culated, a contract should clear- for the survival of the CF rela-
od that best suits their needs. ly state the price to be paid, or tionship that the affected party
Box 4 provides an example of a describe in a clear and transpar- gives notice to the other party.
price-setting mechanism for rub- ent way how it will be calculat- To the extent of its capacity and
ber in Ghana, which can be con- ed. This will benefit both parties acting in good faith, the affect-
sidered as good practice. by fostering trust and creating ed party may also be required to
certainty. minimize damages.

5
©FAO/Giulio Napolitano

Force majeure and change of cir- similar benefit as was originally


cumstances have different conse- expected. This would be the case BOX 5
quences. The basic difference is if, for example, a buyer requires Remedies in sugar
that force majeure allows the af- the producer to further dry grain production in El Salvador
fected party not to perform the that was delivered in accordance
Sugar production in El Salvador is
affected obligation, while change with the agreed delivery schedule
governed by the Law on the Pro-
of circumstances generally leads but does not meet the minimum
duction, Processing and Marketing
to renegotiations. moisture content specified in the
of the Sugar Agribusiness. The law,
contract. In-kind remedies are of-
among other aims, regulates the
ten the most suitable remedies to contractual relationship between
»» Natural events, such as floods address a breach in CF. Remedies
or draughts, may prevent the the sugar mills and the producers
providing monetary value require of sugar cane.
producer from doing what the
the party in breach to pay damag-
contract requires. The law provides specific remedies
»» Force majeure events normally es or adjust the price to be paid,
as the example from El Salvador applicable to sugar cane produc-
excuses the affected party from
in Box 5 shows. Termination re- tion. Sugar cane loses its sucrose in
its obligation.
about three days after harvesting.
»» Change of circumstances pro- leases the parties from their obli-
To take this into account, the law
vides for renegotiation of the gations and ends the relationship.
contract. requires the buyer to receive the
Sometimes the aggrieved party
delivery within seventy-two hours
may have either taken actions that
of harvest. If the buyer breaches its
have contributed to the failure of
obligation to take the delivery, it is
5. Remedies for breach the other party to comply with liable to compensate the producer
Sometimes the parties breach the contract, or may have failed for the total or partial loss incurred.
their obligations under a contract. to minimize the negative conse- The producer has a similar obliga-
To preserve cooperation, the par- quences of a breach. In these cas- tion to deliver, enforced by a similar
ties may opt to use remedies that es, the aggrieved party’s selection penalty. The law specifically identi-
allow the relationship to over- of remedies might be limited. For fies force majeure as a potential ex-
come the breach and continue the example, if the buyer fails to pro- cuse for non-performance.
relationship. vide the promised inputs, it may
not be possible to terminate the Source: Decreto Legislativo Nº 490.
A) Overview of remedies contract based on an insufficient
Remedies are legal measures pro- quantity delivered, as this can be
vided by law or by contract that shown to be partly caused by the
protect the interest of one par- original lack of inputs. C) Producer’s remedies
ty against the failure of another for buyer’s breach
party to perform properly. Co- B) Buyer’s remedies A buyer’s breach of contract is
operative remedies correct or ad- for producer’s breach frequently related to the delay or
just the effects resulting from the A producer’s breach of contract failure in payment, the non-con-
breach and aim to preserve the re- is often related to the quantity formity of inputs, and the buyer’s
lationship. or quality of the final product, failure to take delivery. Similarly
non-compliance with the tech- with the buyer’s remedies, the use
Remedies for breaches of an ag- nical specifications, or non-com- of cooperative remedies as the
ricultural production contract pliance with the agreed delivery. parties’ first option will often en-
can be divided into three catego- The applicable remedies will vary sure the survival of the relation-
ries: remedies in kind, remedies depending on the type of breach. ship. These remedies could be
providing monetary value, and Cooperative remedies – remedies remedies in-kind, such as when
remedies ending the relation- that aim first and foremost to al- the producer requires the buyer
ship (termination). Remedies low the relationship to survive to replace faulty inputs.
in kind aim to provide the ag- the contract breach – are nearly
grieved party with the same or always preferable.

6
Contract farming and the law
What do regulators need to know?

a profitable relationship. Other 7. Dispute resolution


»» Remedies promoting cooper- modalities for renewal are also The Legal Guide discusses differ-
ation are particularly suitable possible and can be elaborated in ent forms of dispute resolution:
for CF, as they aim to preserve
the contract. (i) alternative dispute resolution
the mutually beneficial rela-
tionship. mechanisms, specifically mediation
»» Cooperation after a breach is Besides being a remedy for and arbitration; and (ii) judicial
an integral part of a trust-based breach, termination is a way dispute resolution. Alternative dis-
relationship. to bring the contract to an end. pute resolution mechanisms may
»» Using a sequence of remedies, Termination releases the parties be particularly suitable for disputes
starting with in-kind remedies from their obligations to per- arising from CF.
and ending in termination, al- form and accept performance,
lows the parties time to over-
but does not affect their rights Disputes and dispute resolution in
come the breach and continue
their relationship. and liabilities. Prior to termina- agricultural production contracts
tion, the party wanting to end Besides traditional dispute resolu-
the relationship is normally re- tion in state courts, the parties may
quired to provide a notice to the have access to alternative dispute
6. Duration, renewal other party. This allows the oth- resolution, such as mediation and
and termination er party to prepare for the end of arbitration. In mediation, the par-
The Legal Guide discusses the the relationship. ties try to reach a solution with the
interlinked issues of duration, re- help of a neutral mediator, and de-
newal and termination. cisions are not binding on the par-
ties. In arbitration, parties submit
The duration of the contract is »» The contract’s duration may the dispute to a neutral arbitrator
based on the free will of the parties take into account the parties’ whose decision is binding.
need to cover their investments.
and is frequently connected to the
»» The contract’s duration, renewal
commodity in question. Duration and termination are interrelated The alternative dispute resolu-
should ideally be long enough to issues. tion mechanisms are often faster,
allow the parties to cover their in- »» The longer the duration of the cheaper and more flexible than
vestments. contract, the more important it traditional judicial dispute reso-
is to provide for termination. lution. Therefore, they are often
After the contract’s duration has »» The shorter the duration of the a good solution to expedite con-
ended, the parties may want to contract, the more important it flict resolution. Box 6 shows how
is to provide for renewal.
renew their contract. Optimally, established relationships can be
renewal would be the result of used to enforce contracts, without
a common decision to continue the need for courts to intervene.

BOX 6
Importance of trust in contract farming: experience from India
Enforcement of contracts does not necessarily have to include court proceedings. In fact, buyers in India tend to
view court-based enforcement as detrimental to farm-firm relationships in a way that undermines the handshake
ethic. Instead of going to court, the buyers can use their relationship of trust to leverage producers into compli-
ance. Active participation in the everyday life of the community, such as by donating to schools or conducting
medical camps, can go a long way towards establishing the required trust. Additionally, buyers often choose to
overlook certain levels of breach, in order to keep the relationship alive.

Source: Narayanan, 2012.

7
©FAO/Alessia Pierdomenico

Multiple dispute resolution meth- FAO. 2012. Guiding Principles for FAO. 2013b. Contract farming for
ods can also be used in a sequence. responsible contract farming operations. inclusive market access. Rome.
Available at: http://www.fao.org/ Available at: http://www.fao.org/3/
Following a breach of contract, docrep/016/i2858e/i2858e.pdf a-i3526e.pdf
the parties can try to resolve their FAO. 2013a. Review of smallholder FAO. 2016. Legal aspects of contract
difficulties through discussion and linkages for inclusive agribusiness farming agreements: a synthesis of the
re-negotiation. If direct talks do development. Paglietti, L. & Sabrie, R. UNIDROIT/FAO/IFAD Legal Guide on
FAO. 2015a. Gender Opportunities and Contract Farming.
not succeed, parties may rely on
Constraints in Inclusive Business Models – FAO. FAOLEX: a comprehensive and
mediation and subsequently, if an The Case Study of Unifrutti in Mindanao, up-to-date legislative and policy
agreement is not reached, on ar- Philippines. Rebeca, L., Martha, O. & database. Available at:
bitration or law courts. This may Menguita-Feranil, M.L., Rome. http://www.fao.org/faolex/
allow the parties to resolve their Indira Gandhi Institute of Development GiZ. 2013. Contract farming handbook.
Research. 2012. Notional Contracts: A practical guide for linking small-
differences first through less for- The Moral Economy of Contract scale producers and buyers through
mal methods, potentially saving Farming Arrangements in India. business model innovation. Deutsche
money and time. Narayanan, S. Indira Gandhi Institute Gesellschaft für Internationale
of Development Research: Mumbai. Zusammenarbeit: Bonn.Available at:
September 2012. https://www.giz.de/fachexpertise/
UNIDROIT. 2014. Report on the downloads/giz2013-en-contract-
Consultation Workshop “The legal farming-manual.pdf
»» Alternative dispute resolution dimension of contract farming” Addis GiZ. 2015. Contract farming handbook.
mechanisms are particular- Abeba, 31 October 2014. International Volume II – Selected tools and case
ly suitable for disputes arising Institute for the Unification of Private examples. Available at: https://www.
from CF. Law. Available at: http://www.unidroit. giz.de/expertise/downloads/giz2015-
»» Using a sequence of dispute org/english/documents/2014/study80a/ en-contract-farming-handbook-
resolution mechanisms (from s-80a-22-e.pdf volume-2.pdf
negotiation to mediation and if UNIDROIT, FAO and IFAD. 2015. IIED, FAO, IFAD & SDC. 2010.
no agreement is reached, arbi- UNIDROIT/FAO/IFAD Legal Guide on Making the most of agricultural
tration) gives the parties time to Contract Farming. Rome. Available at: investment: a survey of business
http://www.unidroit.org/english/guides/ models that provide opportunities
overcome the dispute and con-
2015contractfarming/cf-guide-2015-e.pdf. for smallholders. Vermeulen, S. &
tinue their relationship. Cotula, L. International Institute for
Resources Environment, the Food and Agriculture
FAO. 2015b. Inclusive business models. Organization of the United Nations,
Guidelines for improving linkages the International Fund for Agricultural
between producer groups and buyers Development and the Development
References and resources of agricultural produce. Available at: Swiss Agency for Development and
FAO, UNIDROIT and IFAD have all http://www.fao.org/3/a-i5068e.pdf Cooperation. London/Rome/Bern.
created material on contract farming. FAO. 2001. Contract farming: UNIDROIT, FAO & IFAD. Community of
Some of these, as well as other notable partnerships for growth. Available at: practice on legal aspects of contract
resources, are indicated below. http://www.fao.org/docrep/004/y0937e/ farming, which promotes a favourable
y0937e00.htm legal environment for contract farming.
References FAO Contract Farming Resource Available at: http://www.unidroit.org/
Decreto Legislativo Nº 490 - Ley de Centre, for a wealth of material on community-of-practice/home
la producción, industrialización y contract farming. Available at: World Farmers Organisation. 2013.
comercialización de la agroindustria http://www.fao.org/contract-farming/ F@rmletter September 2013. Available
azucarera de El Salvador. at: http://www.fao.org/uploads/media/
WFO_Famletter_09_2013.pdf

Financed by:
Food and Agriculture Organization
©FAO, 2017
I7580EN/1/07.17

International Fund for Agricultural Development (IFAD) of the United Nations (FAO)

Via Paolo di Dono, 44 Viale delle Terme di Caracalla


00142 Rome, Italy 00153 Rome, Italy
www.ifad.org www.fao.org

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