On 20 February 2019, UNIDROIT Deputy Secretary-General Professor Anna Veneziano presented the Legal Guide on Contract Farming, its main features and key aspects of its implementation at the Food for Law Conference hosted by McGill University in Montreal and its Centre for Intellectual Property Policy (CIPP).
This presentation was part of a panel moderated by Pierre-Emmanuel Moyse, Director of the CIPP and Associate Professor, McGill University, which discussed the practice of contract farming and its implications for rural development. The other panelists were Martin Cloutier (Professor, Département de management et technologie, l’ESG UQAM), Matteo Ferrari (Assistant Professor of Private Law, University of Trento and Paola Iamiceli (Professor of Private Law at University of Trento).
In 2015, the Legal Guide on Contract Farming was published by the International Institute for the Unification of Private Law (UNIDROIT) Food and Agriculture Organization (FAO), and the International Fund for Agricultural Development (IFAD).
Contract farming, broadly understood as agricultural production and marketing carried out under a previous agreement between producers and their buyers, supports the production of a wide range of agricultural commodities and its use is growing in many countries. The practice of producing under a contract is used for a broad array of agricultural commodities in many countries of the world and is growing significantly in developing countries. As demand for agricultural products increases dramatically, contract farming is expanding as a tool to organise and link production capacities and market needs to increase and diversify the availability of products on local and global markets, and to improve value chain efficiency.
Under production contracts entered into with agricultural producers, food processors and distributors secure the supply of a specified produce (vegetables, tree crops, grain, husbandry and dairy products, poultry, fish etc.) in the required quantity and quality, at a future designated time and at a predetermined price. Depending on the type of agreement, very often the contractor provides inputs (seeds, fertilisers or young animals) and typically manages the production process by requiring the producer to apply designated technology and growing or raising methods. For producers, agricultural contracts offer the opportunity to secure an income generating activity, guaranteed access to markets and also better access to credit and to technology.