Contract regulations tightened
Contractors are now legally obliged to deliver inputs to farmers they have contracted on time, ensure contracts include the minimum of each input as set by the Agricultural Marketing Authority, and deliver the full package or else they will have to cover the losses incurred by their contracted farmers.
The amendment to the Agricultural Marketing Authority (Grain, Oilseeds and Products) Regulations gazetted yesterday by the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development eliminate loopholes and grey areas in the relationship between contractors and the farmers.
Existing regulations have already put the contracted farmers under a legal obligation to the company or parastatal that contracts them to deliver the crops and criminalise side marketing. The amendment to the AMA regulations now specifies the duties of contractors, basically to ensure they are honest and fair as well, and criminalises breaches of contract on their side.
Contractors now have to deliver the inputs they promise, deliver them on time and pay the agreed purchase price for the crops within the agreed time frames. If they fail to do this they are liable for any losses incurred by their contracted farmers as a result of those failures and have to compensate the farmer double what the farmer paid to buy alternative inputs.
But the growers are also legally bound to use the inputs and are forbidden to sell them, and have to sell the crop to the contractor. Criminal penalties also apply in this case.
The amended regulations also insist that contractors and growers are registered, and that contractors keep detailed records and copies of the contracts, and produce these on demand for the authority. Unregistered contractors cannot enter into contracts.