Legal Guide on Agricultural Land Investment Contracts (ALIC)

The Governing Council, at its 91st session (Rome, 7-9 May 2012), authorised the Secretariat to pursue consultations and preliminary work with a view to the possible preparation, in the future, of an international guidance document on agricultural land investment contracts, taking into account, in particular, the UNIDROIT Principles of International Commercial Contracts.

Subsequently, in a memorandum for the Governing Council regarding the Work Programme for the 2014-2016 triennium, the Secretariat noted that several international initiatives then underway touched upon this area from various angles and varying degrees of depth, most notably the preparation, within the FAO Committee on World Food Security, of the Principles for Responsible Investment in Agriculture and Foods Systems (CFS-RAI Principles). The Secretariat suggested that the work on land investment contracts should await adoption of the CFS-RAI Principles and build upon the experience acquired in developing the UNIDROIT/FAO/IFAD Legal Guide on Contract Farming.

Following the adoption of the Legal Guide on Contract Farming at its 94th session (Rome, 6-8 May 2015), which is available via this link, the Governing Council discussed potential future work in the area of private law and agricultural development together with representatives of FAO and IFAD, who indicated a willingness to continue collaborating on future work in this regard. The Governing Council instructed the Secretariat to undertake a stocktaking exercise and feasibility study on land investment contracts, in order to decide whether UNIDROIT’s particular expertise would be of additional benefit in this field.

The Secretariat conducted the requested stocktaking exercise and feasibility study, which was submitted to the Governing Council at its 95th session (Rome, 18-20 May 2016) and is available at this link. The feasibility study indicated that, although other existing international instruments and policy documents contained important policy guidance on investments in agricultural land, UNIDROIT could use its private law expertise to build upon such instruments and documents and prepare, in collaboration with the Rome-based agricultural development agencies of the United Nations system and other institutions, valuable legal guidance for farmers, investors, governments, and other stakeholders. As agricultural land investment contracts are complex and deal with various areas of law, the added benefit and impact of detailed yet concise legal guidance on this subject matter could be significant. The feasibility study discussed this in detail and identified legal issues that could be considered for coverage in the possible guidance document.

The Governing Council took note of the feasibility study and decided to recommend that the General Assembly include the topic of an international guidance document on agricultural investment contracts in the UNIDROIT Work Programme for the 2017-2019 triennium and assign it a high level of priority. The General Assembly endorsed this recommendation at its 75th session, on 1 December 2016.