POST Online Media Lite Edition



 

Poland's UOKiK explains to farmers how agricultural contract should look like

Christian Fernsby |
For several years, the President of UOKiK can intervene in situations when large business entities make use of the contractual advantage in the agri-food market,

Article continues below



Topics: POLAND   

"Based on the experience of the Office, we suggest farmers, before the beginning of the production process, what a properly structured and beneficial contract for the supply of products should include.

"Written protection of the interests of suppliers is particularly important due to the specific nature of the market, which is extremely sensitive to external factors such as weather conditions," says Tomasz Chróstny, the President of Office of Competition and Consumer Protection (UOKiK).

Price

The most important issue for farmers, without a doubt, is the price of the products they deliver.

It should be clearly stated in the contract. In addition to indicating a specific amount, the criteria for determining the price may also be provided.

What is important, there is no place for flexibility here - the parties should make it clear what policies are applied to calculate the price. The minimum price can also be stated to secure the supplier.

Date of payment

The timing of payment is important. Farmers should be aware of the legal provisions in this area. The basic period of payment should not exceed 30 days but the parties can agree that the payment can be made within 60 days.

The above-mentioned time limit may, in turn, be extended only if the purchaser of the agricultural products is also a small or medium-sized business unit and if postponing the payment is not grossly unfair to the farmer.

It is worth remembering that if the payment deadline is longer than 30 days, the farmer is also entitled to interest until the date of payment.

However, it is in the interest of suppliers to receive the payment as soon as possible that is why shorter deadlines may be negotiated, e.g. 14 days or even less, or a faster payment of part of the remuneration can be agreed upon.

Deliveries

The parties to the contract should also specify the details of the delivery of products and the time schedule.

The above is beneficial both for the farmer and the purchaser as it allows to plan the production activities. The contract should include the latest date by which the contracting parties agree on delivery, it should also include the terms and conditions for making changes to the deadline.

Quality control

The supply of agri-food products must comply with the regulations on the use of plant protection products. Farmers must remember that the purchaser is entitled to check if the delivered products are free from defects.

The verification can be performed in the laboratory of the purchaser or by a third party, the purchaser incurs the costs of testing.

Nevertheless, the result of the testing should be subject to verification by a third party at the request of the supplier.

The cost of verification of the results of the testing should be covered by the party to which the results are unfavorable.

Force majeure

The interests of the supplier should be protected in the case that the production process is disrupted by the occurrence of phenomena beyond the supplier's control.

The contract should indicate what events should be considered by the parties to be force majeure, as well as the procedure to be followed if the phenomena occur.

Importantly, a farmer cannot be required to report the occurrence of force majeure while the event is taking place.

First of all, the farmer should remove the negative effects of, e,g. a flood or storm and make sure that the supplier, the farmer's family and the crops are safe.

The deadlines for notifying about the occurrence of force majeure and other related obligations should be clearly stated so that the supplier does not have to face the "save or report" dilemma.

Contractual penalties

Contractual penalties should be reasonably determined and should apply to both parties symmetrically in the event if one of the parties fail to fulfill the obligations. Both the supplier and the purchaser may face negative consequences if the other party fails to perform the contract. Therefore, it is important that the contractual penalties are reserved for the benefit of each of the parties.

Termination

Regarding termination of the contract, the parties may decide, whether it can be terminated by either of the parties upon giving notice or immediately.

If the contract is concluded for a fixed period, e.g. for one season, its termination requires including an appropriate clause in the contract which will provide for such possibility.

In the clause, the parties may agree on the circumstances, the occurrence of which would entitle one of the parties to terminate the contract.

Determining the circumstances is at the sole discretion of the parties. The above can apply to the termination of the contract both with and without giving notice.

In the case of a contract for an indefinite period of time, the parties may terminate it at any time subject to the indicated notice period. It should be considered to introduce the need to pay a contractual penalty by a party that terminates a contract shortly before the deadline of the delivery, as this puts the business partner in a difficult position.

The parties may also include a clause regarding the right to withdraw from the contract within a specified period.

This is a sort of security for the parties, who may consider, during that time, whether they would like to implement the contract in the described scope. The withdrawal period should not be too long not to create unjustified uncertainty between the parties regarding the continuation of the cooperation.

Summary

"The supplier and the purchaser should be aware of their rights and responsibilities after reading the contract.

It is crucial that the rights and obligations are equal for the farmer and the contractor, e.g. a supplier of fruits and the purchasing entity.

If a large business unit offers to use a ready-made contract template, it should be formulated in such a way that a smaller business partner is not disadvantaged by the content of the contract," says Chróstny.

All matters related to the obligation to conclude a written contract on the purchase of agricultural products from farmers are handled by the National Support Centre for Agriculture.


What to read next

Poland: Fruit and vegetables inspected in supermarket chains
UK government unveils sustainable farming policy
USDA farmers market in Washington, D.C. opened bigger than ever

Excessive rainfall and flooding threat in Puerto Rico and New Mexico

 
A trailing cold front in connection with a low pressure system currently moving east across the Great Lakes toward New England will bring a chance of rain into the eastern U.S. on this first day of November following an exceptionally dry October for this part of the country.
 
 

Latest

U.S. oil and gas rig count unchanged stays at 585
New Jersey Governor Murphy to lead economic mission to UK
Governor Moore commends launch of double-stack rail operations at Port of Baltimore
MEPPI will create at least 200 new jobs in Southwestern Pennsylvania

NEWS

Record heat in southern U.S.

Peru's ex-president Alejandro Toledo sentenced to 20 years in prison over corruption
U.S. weather: Dry in east; active pattern for west
Finland wins European Transport Safety Council’s road safety prize for 2024
Maritime crime and piracy incidents lowest since 1994
Bulgaria: EPPO accuses former mayor and ex-governor in investigation into fishing port in Varna
 

BUSINESS

Iran lifts ban on brand-new Apple phones import

Istanbul provides free public transport for unemployed residents
EIB backs Gran Canaria with €300 million loan for Salto de Chira hydroelectric project
New Zealand concludes high quality trade deal with Gulf Cooperation Council
African Development Bank approves $54 million loan for Mozambique’s first wind energy project
U.S. oil and gas rig count steady
 

Trending Now

Istanbul provides free public transport for unemployed residents

EIB backs Gran Canaria with €300 million loan for Salto de Chira hydroelectric project

Iran lifts ban on brand-new Apple phones import

Stellantis leverages its management organisation


POLITICS

Indonesia bans sales of Google's Pixel smartphones

UK Government ends miners’ pension injustice
Governor Pillen joins letter requesting Biden take action dealing with IV fluid shortage
Canada reduces credit card fees by 27 pct for small businesses
Zambia, China sign MoU to establish African nation's first cholera vaccine plant
Turkey imposes anti-dumping duties on steel imports from China, Russia, India, Japan
 

Today We Recommend

UK Government ends miners’ pension injustice


Highlights 

MEPPI will create at least 200 new jobs in Southwestern Pennsylvania

Solarcycle will create 640 new full-time jobs in Polk County, Georgia

Pennsylvania: GSK will create at least 200 new, high-paying jobs in Lancaster County


COMPANIES

Solarcycle will create 640 new full-time jobs in Polk County, Georgia

Polish Laude Smart Intermodal to build rail terminal in Ukraine
Pennsylvania: GSK will create at least 200 new, high-paying jobs in Lancaster County
Hemlock Semiconductor creating over 1,000 manufacturing and construction jobs in Michigan
Evergy to invest more than $2B in two new high-efficiency natural gas plants in Kansas
New AIG office hub to create 600 Metro Atlanta jobs
 

CAREERS

Stellantis leverages its management organisation

African Development Bank appoints director general for East Africa
Mars announces new leadership within its petcare business
OCI Global announces leadership changes
Ethypharm appoints Éric Chevalier as group human resources director
Exothera appoints Cedric Volanti as CEO
 

ECONOMY

Fraser Institute: Canada’s debt ranking falls from best in G7 to 7th worst

Kuwait reports $5.2 bln budget deficit in FY 2023-24
Eurozone reports modest Q1 GDP growth, stable annual inflation
Italy sees faster economic growth in Q1
Slovenia's economy expected to grow 0.9 pct in Q1
Italy faces deficit infringement procedure
 

EARNINGS

Ericsson Q2 sales down but North America up

Lockton revenue $3.55 billion
Motorcar Parts of America Q4 sales $189.5 million
Limoneira Q2 revenue $44.6 million
Lululemon athletica Q1 revenue increased 10% to $2.2 billion
PVH Q1 GAAP EBIT $205 million
 

OP-ED

Micromanaging is the worst enemy of efficiency and teamwork

Niger set to monetize massive gas reserves through Saharan natural gas pipeline
Putting the brakes on EV folly that choked the market
Oil discovery in Kavango Basin may mean huge benefits for Namibians
Cape Town and Dubai battle over Africa's energy future
Is America going to lose its superpower status?
 

AGRIFISH

U.S. confirms H5N1 bird flu in swine for first time

Bluetongue outbreaks escalate in Czech Republic
French farmers to resume nationwide protests in November
Greece on alert after outbreak of sheep pox
Argentina opened South African market to send porcine hemoglobin powder
Hong Kong suspends import of poultry meat and products from Canyon County, Idaho
 

LEADERSHIP

Employers prefer younger job candidates for AI roles although experienced workers perform same or better

Study finds workers misjudge wage markets
Some organizations may need to expand their hierarchical structures earlier than others
Study finds there's right way and wrong way to deliver negative feedback in workplace
Allyship is critical and its needs appreciation
Generating 'buzz' about new products can influence their success
 

CRIME

BHP, Vale agree to pay $30B damages for Brazil dam disaster

Commission fines České dráhy and Österreichische Bundesbahnen €48.7 million over collusion to exclude common compe
SEC charges Keurig with making inaccurate statements regarding recyclability of K-Cup beverage pod
SEC charges John Deere with FCPA violations for subsidiary’s role in Thai bribery scheme
AG Bonta secures $3.9 million settlement with cryptocurrency company Robinhood
Italy issues $6.4 million fine over Chinese cars badged as Italian
 

Magazine

TRAVEL

Radisson Hotel Group debuts in the heart of Tunisia’s capital city, Tunis

Morocco’s first Radisson branded hotel opens in Casablanca
Buna channels, an unreal and beautiful part of Bosnia and Herzegovina
JW Marriott unveils Mindful Haven with opening of JW Marriott Hotel Nairobi
Sotheby's Sports Week returns with fantastic artifacts
Red Roof properties open in Michigan
 

SEA, LAND, AIR

Citroën C3 Aircross, the most affordable compact SUV with 7 seats

2025 Chevrolet Equinox stands apart with fresh looks and capability
Hill Helicopters HX50, luxury in the sky
Opel Movano becomes fully equipped camper van
Porsche Panamera, new hybrid variants
Dodge Charger, 670 horsepower of electric
 

DESIGN

Cold night, hot fire pit, cool entertainment

Embellish your home with PVC panels
You'll have to hurry if you want one of 20 new Louis Vuitton watches
Luxury duvet looks good, fells good and keeps you healthy
Vacheron Constantin, watches for life and more
Schüller kitchens, where functionality marries design
 

GADGETS

MESA/Boogie Celebrates 40-year partnership with John Petrucci

reMarkable 2, monochrome tablet for your thoughts and your eyes
OnePlus Ace 3V, first with Snapdragon 7 Plus Gen 3
ASUS Zenfone 11 Ultra, flagship with a reason
Samsung Galaxy S24 is photography powerhouse
Casette tapes are making a big comeback, and so are portable players
 

HEALTH

One more barrier to developing vaccine for HIV removed

Rwanda begins world's first clinical trial for treatment of Marburg virus disease
Rwanda restricts gatherings amid Marburg virus outbreak, to begin trials of vaccine
Teksas Attorney General reaches settlement in first-of-its-kind healthcare generative AI investigation
Potentially deadly fungal disease spreading in California
First mpox vaccines arrive in Africa
 

MEANTIME

Einstein Telescope step closer

Exoplanet-hunting telescope to begin search for another Earth in 2026
India to build first phase of its own space station by 2028
Roscosmos chief approves schedule of creating Russian orbital station through 2033
Potentially habitable 'exo-Venus' with Earth-like temperature discovered
Rare species of wild bees discovered in Berlin