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SAMPLE FARMER TO COMPANY CONTRACT FOR THE CULTIVATION OF GREEN BEANS
1. General:
(1) Farmers of Village …. (the Farmers) wish to grow green beans and Company …. (the Company) wishes to promote and buy their production and market it overseas.
(2) This contract specifies the terms and conditions under which the Farmers will grow green beans and the Company will promote, purchase, process and market them.
2. The Company agrees:
(1) To measure and assess the suitability of the plot proposed by the Farmer for planting green beans.
(2) To provide high-quality seed to the Farmer in good time for planting, in the quantity required for planting the accepted area of land.
(3) To supply on cash payment (or on credit once the Farmer has qualified as an established and reliable contract grower) the type and quantity of fertilizers and agro-chemicals required for the area of green beans planted by the Farmer.
(4) To advise the Farmer on all technical aspects of growing green beans.
(5) To buy all green beans of acceptable quality grown by the Farmer, for a price announced at the start of each growing season. The quality requirements will be as described in Schedule 1.
(6) To pay the Farmer his/her dues as described in para 4 below.
3. The Farmer agrees:
(1) To use the part of his/her farm that has been surveyed and approved by the Company, for the purpose of growing green beans for the duration of this agreement.
(2) To plant the bean seeds supplied by the Company on this land, on the dates and following the procedures advised by the Company.
(3) To follow all technical recommendations made by the Company with regard to planting, irrigating, weeding, fertilizing, controlling pests and diseases, picking, sorting and packing green beans.
(4) To sell all green beans of acceptable quality grown on the farm to the Company, for the price and following the procedure outlined in para 4 below.
(5) To become a member of ….. Farmers' Group, and to contribute to the maintenance of common facilities for irrigation, input distribution, sorting, packing etc as agreed by the group.
4. Payment for green beans and production inputs shall be determined as follows:
(1) The base price at which each grade of green beans will be bought will be announced by the Company at least one month before the start of each planting season.
(2) The prices at which fertilizers and agro-chemicals will be sold will be announced at the same time, but may fluctuate during the year in line with exchange rate fluctuations.
(3) Payment for green beans delivered each month, less the cost of fertilizers and agro-chemicals taken on credit, will be made before the 15th of the following month.
5. Penalties and Bonuses:
(1) If the Farmer delivers green beans which do not meet the agreed quality standards, the Company will reject them. The Farmer may re-submit them after sorting, but the Company is under no obligation to accept beans which do not meet the agreed quality standards.
(2) If the Farmer fails to follow the procedures detailed in this agreement, he/she will be warned verbally and in writing. After three written warnings the Company has the right to terminate the agreement.
(3) If the Company fails to fulfil its commitments as detailed in para 2 above, the Farmer has the right to claim compensation to the value of the services foregone or to the value of the crop lost, at rates agreed between the Company and the Farmers' Group.
(4) If the Farmer delivers green beans which exceed the required quality standards or the expected level of production, he/she shall be eligible for a bonus payment at a level agreed between the Company and the Farmers' Group.
6. Duration of the Agreement:
(1) This agreement will last for one growing season from the date of signing to the end of the economic harvest of the green bean crop.
(2) If both parties are satisfied with the outcome of the agreement it may be renewed for a further season, but there is no obligation on either party to renew the agreement.
7. Dispute Settlement:
(1) Any dispute arising as result of this agreement will be settled wherever possible by discussion between the Company, the Farmers' Group and the Farmer.
(2) Any dispute which cannot be settled by this process will be referred to an independent arbiter acceptable to all the parties involved.
8. Signature:
I have read and understood the contents of this agreement and I sign it of my own free will.
----------------------------------------------- (Farmer)
----------------------------------------------- (Company)
----------------------------------------------- (Witness)
----------------------------------------------- (Date)
Schedule 1: Grades and Quality Requirements of Green Beans
1. Grade specifications:
(1) Grade 1 beans (extra fine) are from 6.5 - 9.5 cm in length.
(2) Grade 2 beans (fine) are from 9.5 - 11.0 cm in length.
(3) No other sizes will be accepted
1. Quality Requirements: acceptable beans must be:-
(1) free from pests, wounds, scars, bruises;
(2) free from mud, dust or other debris;
(3) not broken or damaged in any manner;
(4) not bent;
(5) picked with the remains of the calyx intact;
(6) fresh and not pre-wilted by sun-burn or other sources of heat;
(7) naturally green, not tainted by disease, smoke etc.
Source: Adapted from Linking Farmers to Markets, An Operational Manual, FAIDA, Arusha (forthcoming)
Related information: Example of Guide to the preparation of smallholder contracts.
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