Agricultural Production Contracts
By Dagnachew Tesfaye, Managing Partner at DMLF
Agricultural Production Contract Proclamation No 1289/2023(the Proclamation) done as of July 6,2023 governs the particular nature of agricultural produce including processed feed, seed, breed; of plant(cereals, pulses, oil crops, vegetables, fruits, root crops, spices, forage, non banned stimulants, industrial crops, forest and forest products and other cultivated crops), animal (cattle, sheep, goat, draft animals, camel, chicken, bee, silkworm, pig, and any others that can be domesticated in the future) and fish and their products in a raw or produced and processed form between a producer and a contractor with a comprehensive legal framework. Agricultural Production Contracts(APC’s) are defined as agreements between agricultural produce contractor and producer that is registered by an appropriate body to register contracts. Within APC, there are four types of contracts. These are out-grower contracts, centralized contracts, multiparty contracts and intermediary contracts.
The Proclamation covers the contractual journey of producer and contractor from the start to the end. APC’s can start through written or oral offer and acceptance. Once the offer and acceptance are known, the APC’s shall be made in writing attested by 3 witnesses and shall be registered.
The content of the APC’s should reflect among others the names and addresses of the parties, the rights and obligations of the parties, type, quality and quantity of the agricultural produce and description of units of measurement, price and term of payment, system of transportation and related costs, the duration and validity date of the contracts, dispute resolution mechanisms.
Force majeure circumstances are redefined taking into consideration the particular relationship of the producer and contractor. Serious illness of producer, if he himself is responsible to perform, extreme high or low temperature, fire accident, earthquake or landslide, man made accident affecting more people including the producer and extreme animal or crop disease or pest outbreaks are the force majeure conditions included in the Proclamation.
Producer and contractor can agree on specific conditions that entitles them to terminate the contract. However, the party that terminates without mutual consent shall be liable to compensate the other party for the damage arising from termination of the contract. Council of Ministers shall determine the calculation of the compensation for damage due to termination by a regulation.
Disputes shall be first settled amicably. When amicable settlement fails to produce result, then the parties may agree to resort to mediation by a 3rd party or settle the matter by arbitration. Where the parties fail to resolve the dispute through mediation or arbitration, they may take the matter to court of law with relevant jurisdiction.
To sum up, APC Proclamation aims to modernize transactions in agricultural produce and bring the agricultural sector intertwined with customary practices to a level of standard laws and procedures of transaction. Due to this, the Proclamation declares that no law or customary practice shall insofar as the laws are inconsistent with the Proclamation shall have no effect on matters provided in the Proclamation. The aim of the Proclamation is to bring the agricultural sector to a modern level of contractual agreement, ensuring the sector benefiting itself and the agro processing transformation of the country.
For related inquiries, you may contact us at info@dmethiolawyers.com
-
Electric Vehicles (EVs) in Ethiopia: Legal and Regulatory Implications
By Geda Yoseph, Associate at DMLF Introduction In recent years, Ethiopia has undergone several reforms in different sectors; among these, transport and logistics. The State has taken several reforms for the effective utilization of its resources, mainly by focusing on renewable energy and the introduction of electric vehicles. In order to achieve this plan, the…
-
Ethiopia’s Liberalization of Export, Import, Wholesale and Retail Trade for Foreign Investors
By Mahlet Mesganaw, Partner at DMLF Introduction The Ethiopian Investment Board by Directive Number 1001/2024, issued the “Directive to Regulate Foreign Investors’ Participation in Restricted Export, Import, Wholesale and Retail Trade Investments’’(the Directive). The Directive shall come into force as of the date when it is posted on the web pages of the Ministry of…
-
Income Generating Business Activities for Civil Society Organizations
By Dagnachew Tesfaye, Managing Partner at DMLF The Ethiopian Civil Society Organization Proclamation Number 1113/2019(the Proclamation), done as of March 12,2019, is enacted to regulate civil society organization. This Proclamation has allowed civil society organizations to engage in income generating business activities. To regulate in detail the business engagement of civil society organizations, the Authority…
-
Cassation Decision on Requirements of an Agreement made in an Irregular Union
By Geda Yoseph, Associate at DMLF Introduction The Federal Supreme Court Cassation Division on Cassation on File No. 185895 dated 24/02/2021, passed a binding decision as to whether an agreement on property of the man and woman made during an irregular union that lasted more than three years is required to be presented to court…
-
Irregular Union under Federal Family Law
By Geda Yoseph, Associate at DMLF Irregular union is a relationship that is similar to marriage but actually it is not a marriage. Irregular union also produces legal effects. Ethiopian Federal Family Law recognizes the existence of irregular unions and as a result attached some legal consequences to the union. Some of these effects are…
-
Arbitration: Settlement of Dispute of Marriage
By Mahlet Mesganaw, Partner at DMLF The Revised Family Code Proclamation No 213/2000 incorporates provisions of settlement of disputes through arbitration for disputes of marriage. One form of arbitration is an attempt to reconcile issues of divorce of the spouses. The arbitrators attempt to persuade the spouses to renounce their petition of divorce. The next…