Contract Farming Resource Centre

FAO supports the drafting of a Contract Farming Bill in Lesotho


Lesotho is taking steps towards establishing an enabling regulatory framework for contract farming. As a part of an FAO’s Technical Cooperation Programme (TCP) project "Building capacities and facilitating enabling environment for contract farming in Lesotho (TCP/LES/3801)", a National Contract Farming Working Group – with representation from both public and private parties, including farmers’ organizations – has recently drafted a Contract Farming Bill for the government’s consideration.

Facilitated by international and national legal experts, the Working Group convened five times over the duration of the project to first learn and discuss about the existing legal framework for contract farming, before launching to in-depth discussions on the ways a dedicated legal instrument could assist in supporting contract farming and what should be included in it. These sessions were supported by presentations from the legal experts, which allowed all participants in the Working Group sessions to meaningfully contribute and express their preferences for the direction and content of the draft.

This inclusive and participatory process resulted in a draft Bill, which aims to regulate all contract farming in the country. As its main feature, it proposes the creation of a voluntary register of contract farming agreements, aiming to increase their transparency and enforceability. Access to various benefits – such as dispute resolution – would be reserved only to registered contracts, creating an incentive for registration.

The draft Bill also proposes some minimum form and content requirements for contract farming agreements. First and foremost, it requires a written form for such contracts. Further, it has a list of clauses that parties should include in their contract, but – respecting the parties’ freedom of contract – avoids regulating the content of such clauses wherever possible, leaving this for the decision of the parties themselves who are the best informed on what the exact content should look like.

Recognizing the potential for imbalance in negotiation power between the parties, the Bill proposes a number of safeguards to ensure that the producers can rest easy when signing. For example, it would give the producers the right to withdraw from a contract farming agreement even after a certain period after signing it, allowing them all the time they need to think before fully committing. The draft also proposes alternative dispute resolution mechanisms suitable for contract farming, by establishing the position of a Contract Farming Officer, who can help parties to find solutions to problems without having to turn to courts.

The Working Group has now passed on the Bill for the Government for their consideration. Stay tuned for further updates, once the Bill passes to Law!


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