Ensuring greater access to markets for producers worldwide - GCP/GLO/659/IFA
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FAO ;
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In countries across the world, a significant number of farmers, many of them smallholders, engage in contract farming in one form or another. For many commodities, such as cocoa, rubber and sugar beet, contract farming is rapidly growing in importance, often becoming the dominant model to coordinate production with market linkages. At the heart of contract farming lies an agreement between farmers and buyers. Both agree in advance on the terms and conditions for the production and marketing of farm products. These conditions usually determine the price to be paid to the farmer, the quantity and quality of the product demanded by the buyer and the date of delivery to buyers. In some cases, the contract may also include more detailed information on how the production is to be carried out or whether inputs such as seeds, fertilizers and technical advice will be provided by the buyer. In 2015, a joint publication between the International Institute for the Unification of Private Law, FAO and the International Fund for Agricultural Development, entitled the “Legal Guide on Contract Farming”, was released. The Guide specifically addresses legal aspects of contract farming, describing common contract terms and discussing legal issues and critical problems that may arise under different practical situations, illustrating how they may be treated under different legal systems. The project aimed to expand the impact and benefits of the Legal Guide by disseminating its core messages and recommendations, to promote the engagement of smallholder farmers in fair, profitable and sustainable linkages to markets through contractual relations with buyers.