Food and Agricultural Organization (FAO) has introduced a legal tool that guides how farmers and buyers engage each other in contract farming.
Dubbed UNIDROIT, the legal guide tool seeks to define key terms for anyone entering into contract farming while spelling out terms under which both farmers and buyers operate.
The tool, according to FAO is expected to addresses grievances that might arise between farmers and buyers while ensuring solutions are solved amicably.
The UN body explained that the guide was necessitated by changing food systems, consumer preferences and tighter food growing requirements.
The 250 page guide also seeks to link farmers and companies to various stakeholders including agricultural experts and legal scholars.
The tool is launched at the time when contract farming has gained grounds in Kenya but is still riddled with misunderstandings and contractual pitfalls.
According to the Kenya Economic Survey, the country’s agricultural sector improved hugely last year, contributing 30 percent to the country’s GDP.
This was attributed to good market information and accessibility by smallholder farmers who accounts for at least 70 percent of agricultural activities.
Previously, smallholder farmers used to incur huge losses by selling their out puts to middlemen at low prices due to lack of ready market.
Although this form of farming provide ready market for farmers while ensuring steady supply of raw materials for companies, key concerns like lack of dispute resolution mechanisms in cases where goods delivered are deemed to be sub standard have cropped up.
For example, a company might not pay the agreed price for the produce delivered, asserting that its quality was substandard, while the contract does not include any dispute resolution mechanism.
The guide was crafted by the International Institute for the Unification of Private Law on behalf of FAO in conjunction with the International Fund for Agricultural Development (iFAD)