National Farmers Union (NFU) President Roger Johnson hailed the recent release of the UNIDROIT/FAO/IFAD Legal Guide on Contract Farming, a new tool to guide growers and buyers in establishing sound contracts and conflict resolution procedures. NFU, through the World Farmers’ Organisation, played a major role in the drafting of the guide.
“Farmers and buyers alike can benefit through contractual relationships, but as with any negotiation, there are potential pitfalls for either side if the terms that are agreed to are not fair, sound and transparent,” said Johnson. “This guide provides a helpful framework for farmers to ensure they do not find themselves on the short end of the stick when negotiating with buyers.”
The 250-page legal guide aims to address issues by providing advice on sound contract design, from negotiation to conclusion, including concrete clauses on allocation of risks, as well as recourses for non-performance and conflict resolution. NFU General Counsel and Vice President of International Relations Dave Velde was a member of the working committee tasked with drafting the guide.
“Global market trends have compelled more farmers into contract farming, and consequently we have seen many farmers being taken advantage of because of the terms they agree to,” said Velde. “As there are clear protections for food processors and distributors, there also needs to be clear protections for family farmers and ranchers. This guide will aide producers and purchasers alike in establishing fair relationships with one another.”
The legal guide is the result of a multiyear process spearheaded by the International Institute for the Unification of Private Law (UNIDROIT) in collaboration with the Food and Agriculture Organization of the United Nations (FAO) and the International Fund for Agricultural Development (IFAD) that gathered inputs from legal scholars, agricultural experts, producers and traders on ways to ensure contract farming relationships are sustainable.
National Farmers Union has been working since 1902 to protect and enhance the economic well-being and quality of life for family farmers, ranchers and rural communities through advocating grassroots-driven policy positions adopted by its membership.