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Model agreement for responsible contract farming: with commentary











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    Booklet
    A contract farming model agreement in Lesotho 2024
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    As an innovative business model, contract farming has the potential to contribute to sustainable development of agribusinesses and agrifood value chains, particularly in developing countries. It can be employed to improve smallholder producers’ access to market and productive resources, strengthen the competitiveness of producers and agribusinesses, especially small and medium-sized enterprises (SMEs), and foster a transparent market environment. The primary objective of the contract farming model agreement is to promote responsible contract farming and good practices in contract development. It has been developed based on a contract farming pilot in Lesotho, jointly facilitated by the Ministry of Agriculture, Food Security and Nutrition (MAFSN) and the Food and Agriculture Organization of the United Nations (FAO).
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    Brochure, flyer, fact-sheet
    Guiding questions for contract analysis 2018
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    In contract farming schemes, the process of developing the contract is very important for building long-lasting trust between farmers and buyers. As a common best practice, the whole contract formation process should be carried out in a fair and transparent manner and in good faith. A good practice is for farmers to be involved in discussions with the buyer from the beginning of the negotiation and contract formation phases, to make sure they understand all the conditions included in the contract, and to ensure that their interests and rights are considered. The following questions aim to serve as a guiding tool for analyzing contracts and can be used by all involved parties. The signing of the contract should only take place after a full agreement on all the conditions has been reached and the negotiation phase is completed.
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    Book (series)
    Enabling regulatory frameworks for contract farming 2018
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    FAO’s previous contribution to the development of contract farming saw the publication in 2015 of the UNIDROIT/FAO/IFAD Legal Guide on Contract Farming, which focused on the bilateral relationship between an agricultural producer and a contractor. This Legislative Study develops that research and focuses on the regulatory frameworks for contract farming, aiming to highlight different possible approaches for different contexts. Responsible contract farming can be a powerful tool for small scale farmers in developing countries to move towards larger scalecommercial production. It can create economic wealth, contribute to supply chain efficiency through the production of higher quantities of better quality products, and contribute to achieving domestic food security objectives. Maximizing these benefits while minimizing the inherent risks of contract farming is reliant upon the forging of an enabling environment, a key part of which is the domestic regulatory framework. This Legislative Study provides guidance to domestic regulators and other interested readers on how to appraise and potentially reform domestic regulatory frameworks to achieve responsible contract farming. Recognising that different countries and contextual realties may benefit from different regulatory solutions, this Study provides several examples, supported by representative case studies, on how contract farming can be regulated, without promoting a single solution as the most appropriate. Please visit FAO’s Contract Farming Resource Centre, http://www.fao.org/in-action/contract-farming/en/, which is a regularly updated website hosting a variety of material on contract farming both from FAO and from other recognized authors.

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