LEGAL STRUCTURE OF AGRICULTURAL ENTERPRISES

STUDY LXXX C - PREPARATION OF AN INTERNATIONAL GUIDANCE DOCUMENT ON LEGAL STRUCTURE OF AGRICULTURAL ENTERPRISES

As a natural follow-up from the Legal Guide on Contract Farming (finalised in 2015) and the Legal Guide on Agricultural Land Investment Contracts (finalised in 2020), the Legal Structure of Agricultural Enterprises (LSAE) is the most recent project of the tripartite partnership between the International Institute for the Unification of Private Law (UNIDROIT), the Food and Agriculture Organization of the United Nations (FAO) and the International Fund for Agricultural Development (IFAD).

The LSAE project was selected by the UNIDROIT Governing Council, at its 98th session (Rome, 8-10 May 2019) and approved by the General Assembly at its 78th session (Rome, 12 December 2019) to be developed during the 2020-2022 Work Programme.

In 2020, as a first step for the development of the LSAE project, the Secretariat conducted a stocktaking exercise and feasibility study to ascertain whether UNIDROIT could make a useful contribution. On the basis of the preliminary research conducted, the Secretariat reported back to the Governing Council at its 99th session and confirmed the lack of international guidance to best streamline supply chain relationships (see UNIDROIT 2020 – C.D. (99) B.5). The Secretariat also drew the Council’s attention to the strong interest identified, in particular from economists, of undertaking work on the private law aspects of legal structure of agricultural enterprises to: (i) improve market access; (ii) improve forms of coordination of agricultural enterprises; (iii) ease access to critical resources and insurance; and (iv) address unfair commercial practices.

In 2021, on 15 and 16 April, the Secretariat co-organised a Consultation Webinar with FAO and IFAD to gather further input on the topics that could be potentially covered in the Guidance Document. The conclusions and recommendations of the Webinar were presented at the 100th session of the Council which agreed with the Secretariat’s proposal to upgrade the status of the LSAE project to allow for the establishment of a Working Group and to permit the allocation of resources for experts to continue the delineation of the scope and content of the prospective Guidance Document (see paras. 65-80, UNIDROIT 2021 – C.D. (100) B.24). The General Assembly supported the recommendation by the Governing Council, allocating high priority status to the LSAE project at its 80th session in December 2021.

On 9 and 10 December 2021, the Secretariat organised an informal exploratory meeting with a core group of experts to identify the topics and questions that needed to be further developed in an annotated issues paper for discussion during the first session of the Working Group.

The first session of the LSAE Working Group took place in Rome at the seat of Unidroit and via videoconference from 23 to 25 February 2022. The second session is schedules for 2-4 November 2022.

For queries related to the LSAE project kindly contact Ms Priscila Andrade (Legal Officer) p.andrade@unidroit.org

The Consultation Webinar was held online on 15 and 16 April 2021 and served as a brainstorming session to inform the drafting of an annotated list of possible topics to be addressed in a prospective future instrument. The Consultation included five different sessions respectively focusing on:

  • regulatory demands and new technology scenarios;
  • contractual structures for collaboration and integration of agricultural enterprises;
  • remedies and dispute settlement mechanisms;
  • corporate structures for the organisation of farmers and agricultural enterprises; and
  • challenges for agricultural finance and access to credit.

 

Focusing on the legal and business aspects of agricultural enterprises, the Webinar brought together 35 speakers and over 150 registered participants from a wide diversity of backgrounds including practitioners and academics; representatives of international organisations; as well as representatives of the private sector, NGOs and think tanks.

 

For more information on the Consultation Webinar:

As consistent with UNIDROIT’s established working methods, the members and observers of the Working Group were identified by the UNIDROIT Secretariat, in consultation with the FAO and IFAD. The experts were selected for their legal expertise in the field of contract law, corporate law, commercial law, property law, and agricultural law, as well as for their experience in economics, finance, digitalisation and sustainability.

The Working Group is chaired by the Governing Council member Justice Ricardo Lorenzetti (Justice at the Supreme Court of Justice of Argentina) and coordinated by Professor Fabrizio Cafaggi (Judge at the Council of State Italy and Professor at the University of Trento and LUISS)

  • As of May 2022, the Working Group is composed of the following expert members:
  • Jennifer Bair, Professor, University of Virginia (United States)
  • Virgilio de Los Reyes, Dean, De La Salle University (Philippines)
  • Matteo Ferrari, Professor, University of Trento (Italy)
  • Cynthia Giagnocavo, Professor, Universidad de Almeria (Spain)
  • Hagen Henry, Professor, University of Helsinki (Finland)
  • Paola Iamceli, Professor, University of Trento (Italy)
  • Matthew Jennejohn, Professor, Brigham Young University (United States)
  • Georg Miribung, Researcher, Free University of Bozen-Bolzano (Italy)
  • Carlo Russo, Associate Professor, University of Cassino and Lazio Meridionale (Italy)

The Working Group also counts with the participation of representatives of the FAO and IFAD legal departments and technical experts from other departments. A significant number of observers, representing international and regional intergovernmental organisations, farmers associations, non-governmental organisations, and the private sector have also been invited to join the Working Group, among which the following:

  • Asian Farmers’ Association for Sustainable Rural Development (AFA)
  • Eastern Africa Farmers Federation (EAFF)
  • Emerging Ag
  • International Development Law Organization (IDLO)
  • International Cooperative Alliance (ICA)
  • International Institute for Environment and Development (IIED)
  • Organisation for the Harmonisation of Business Law in Africa (OHADA)
  • Organization of American States (OAS)
  • United Nations Commission on International Trade Law (UNCITRAL)
  • World Bank Group (WBG)
  • World Food Programme (WFP)
  • World Food Law Institute

1st Working Group Meeting

The first meeting of the LSAE Working Group took place in a hybrid manner on 23-25 February 2022.

 

2nd Working Group Meeting

The second meeting of the LSAE Working Group is scheduled for 2-4 November 2022.