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Aison Alejandro Sy Garcia Philippines aisongarcia@gmail.com
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Increase of Private Investments in Agriculture Most first world countries and going to third world countries for agricultural land for supply for food and raw materials Increasing instances of landlessness and displacements due to “commoditization“ of land VGLT, UNIDROIT and RAI are mainly voluntary
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42 years of Agrarian Reform ◦ land redistribution Average of 1 hectare farm owned by a family Multinational investors for agriculture are coming in but there is a farmland ownership ceiling of 5 hectares per individual Not all farmers are capacitated to negotiate on equal footing which resulted to iniquitous agribusiness arrangements How to sustain inclusive development in rural areas?
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Unfair contracts (no voice, skewed distribution of income) Provisions of the contracts are not understood Problematic implementation No recourse to an effective dispute resolution Lack of capacity of Government and NGOs to support the farmers in agribusiness contracts
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Agrarian Reform = (LTI+SSD) x SIBS Where: LTI – Land Tenure Improvement SSD – Support Services Delivery SIBS - Social Infrastructure Building and Strengthening
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Pre formulated provisions with “fine prints” “Take it or leave it” Pressure and undue influence Divide and conquer
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Parties have full information and they freely decide on it Reasonable Term, Price, Delivery and sharing of profit Sustainable
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Ensuring Good Faith in negotiation (incentives?) International standards on responsible agricultural investments
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Information Access vs. Trade Secrets Legal and Economic Empowerment Government’s investment in infrastructure adds value to the smallholders produce
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Rule of law and Strengthen Relationship Correcting bargaining/starting positions strengthens the bargaining and negotiating position of smallholders to enter into agribusiness contracts Preparatory activities to ensure good faith contracting (due diligence, contract review, etc.) Empowering smallholder to negotiate
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Enterprise Lawyering Teams 72 provinces with 3 members in each province 2 trainings 41 female, 47 male (only 30% are lawyers)
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Industry Profile and Value Chain Negotiation Entering into Contract and crafting the provisions Dealing with problematic contracts Dispute Resolution Success factor: sharing of best practices from industry players and government intervention
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Better contracts, empowered farmers, happy investors “Checkered” Farms ◦ Started with lease agreement and negotiated for a growership with a price of 2.5 $ per box ◦ Renegotiated because economic conditions have changed and got 4$ per box “at packing plant” contract ◦ Able to build their packing plant and operate a profitable banana business Sumifru Contracts ◦ 4.5$ per box
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Buy-in from the stakeholders ◦ 1. smallholders ◦ 2. lawyers ◦ 3. Other government offices ◦ 4. Non-government organizations Strengthening capacity of the current “Enterprise Lawyering” Teams Legal framework for smallholder agriculture is lacking ◦ Juridical entity, taxation, incentives, technology
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Formulate Legal and Policy Framework for Smallholder Agribusiness incorporating relevant international principles and standards Strengthen negotiation fundamentals of smallholders by conducting more “enterprise lawyering” trainings and creation of IEC materials Create an office on responsible agricultural investments which reviews agribusiness contracts and provides enterprise lawyering services to both investors and farmers
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aisongarcia@gmail.comaisongarcia@gmail.com, +63-998-378-1199
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