Enabling regulatory frameworks for contract farming

Book excerpt: FAO’s previous contribution to the development of contract farming saw the publication in 2015 of the UNIDROIT/FAO/IFAD Legal Guide on Contract Farming, which focused on the bilateral relationship between an agricultural producer and a contractor. This Legislative Study develops that research and focuses on the regulatory frameworks for contract farming, aiming to highlight different possible approaches for different contexts. Responsible contract farming can be a powerful tool for small scale farmers in developing countries to move towards larger scalecommercial production. It can create economic wealth, contribute to supply chain efficiency through the production of higher quantities of better quality products, and contribute to achieving domestic food security objectives. Maximizing these benefits while minimizing the inherent risks of contract farming is reliant upon the forging of an enabling environment, a key part of which is the domestic regulatory framework. This Legislative Study provides guidance to domestic regulators and other interested readers on how to appraise and potentially reform domestic regulatory frameworks to achieve responsible contract farming. Recognising that different countries and contextual realties may benefit from different regulatory solutions, this Study provides several examples, supported by representative case studies, on how contract farming can be regulated, without promoting a single solution as the most appropriate. Please visit FAO’s Contract Farming Resource Centre, http://www.fao.org/in-action/contract-farming/en/, which is a regularly updated website hosting a variety of material on contract farming both from FAO and from other recognized authors.