The project on Collaborative Legal Structures for 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 is 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).
This UNIDROIT/FAO/IFAD project aims at developing guidance on “collaborative legal forms” that support smallholders and agri-MSMES to enhance sustainable agricultural development in supply chains and contribute to the transformation of agrifood systems by: (i) increasing efficiency; (ii) access to market and finance; (iii) exploring innovation opportunities offered by digitalisation; and (iv) addressing power imbalances and remedies for unfair commercial practices. The challenges faced by agri-food supply chain leaders are also considered, but the framing of the project is mainly focused on the challenges faced by actors operating in the midstream segment of the agri-food supply chain, beyond the production stage and in low- and middle-income countries.
Three categories of “collaborative legal forms” are considered:
The preparation of the LSAE guidance instrument is expected to take place over six sessions of the Working Group, followed by a period of consultations before the complete draft is submitted for adoption by UNIDROIT, FAO and IFAD in 2025.
The development of the LSAE project, began during the 2020-2022 Work Programme, initially with a medium-priority level, and was extended at high-priority level to the 2023-2025 Work Programme by the UNIDROIT Governing Council (UNIDROIT 2022 C.D. (101) 21) and General Assembly (UNIDROIT 2022 A.G. (81) 9).
In 2020, as a first step for the development of the LSAE project, the Secretariat prepared and submitted to the Governing Council, at its 99th session a background paper (UNIDROIT 2020 – C.D. (99) B.5), which was divided into three parts. Part I provided background on UNIDROIT’s work in the field of private law and agricultural development. Part II provided a summary of recent international initiatives which may directly and/or indirectly influence the scope of UNIDROIT’s future work. Lastly, Part III evaluated whether a new UNIDROIT/FAO/IFAD instrument would be of additional benefit and provided preliminary observations on legal issues to considered. The Secretariat drew the Governing Council’s attention to the strong interest identified, in particular from economists, of undertaking work on the private law aspects of legal structures for 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 (for more information see below). The conclusions and recommendations of the Webinar were presented at the 100th session of the Governing 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 (UNIDROIT 2021 – C.D. (100) B.5). 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.
In 2022, the first session of the LSAE Working Group took place from 23-25 February and the second session of the Working Group was held on 2-4 November. Progress was made in clarifying the scope and content of the prospective guidance instrument and the Governing Council recommended maintaining the high-priority level of the LSAE project in the 2023-2025 Work Programme (UNIDROIT 2022 – C.D. (101) 10).
In 2023, the third session of the Working Group was held on 8-9 May and more progress was made within the respective subgroup areas, namely: cooperatives; corporations; and multiparty contracts (UNIDROIT 2023 – C.D. (102) 9.
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:
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 working methodology, a Working Group has been established, composed of members and observers selected for their expertise in the field of contract law, corporate law, cooperative law, commercial 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 September 2023, the Working Group is composed of the following expert members:
The Working Group also includes representatives of FAO and IFAD legal departments and technical experts from other departments (FAO’s “Agrifood Economics Division” and “Food Systems and Food Safety Division”, as well as IFAD’s “Research and Impact Division” and “Inclusive Rural Finance, Markets and Value Chains”).
In addition, 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, which include the following:
Moreover, the Working Group has three individual expert observers: Roberta Peleggi (University of Rome La Sapienza); Zhuo Geng (Guangdong University of Foreign Studies); and Edward Kyei Twum (University of Cassino and Lazio Meridionale).
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 took place in a hybrid manner on 2-4 November 2022.
3rd Working Group Meeting
The third meeting of the LSAE Working Group took place in a hybrid manner on 8-9 May 2023.
4th Working Group Meeting
The fourth meeting of the LSAE Working Group will take place in a hybrid manner on 8-10 November 2023.