ANNEX 3: COUNTRY REPORTS

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ANNEX 3: COUNTRY REPORTS

Table of Contents

Bangladesh .............................................................................................................................. 2

Ghana ..................................................................................................................................... 28

Kenya ..................................................................................................................................... 53

Mali ......................................................................................................................................... 81

Nepal .................................................................................................................................... 116

The Netherlands ................................................................................................................. 141

Senegal ................................................................................................................................ 182

Thailand ............................................................................................................................... 218

Uganda ................................................................................................................................. 250

Zambia ................................................................................................................................. 275

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Starting and Operating a Farm Streamlining the regulatory burden to start and operate a farm reduces the barrier to formalization for small- and medium-scale commercial farms. Decentralized government offices improve rural access to government services. Efficient and well-implemented regulations also require coordinating the activities of multiple government agencies, while balancing policy considerations such as land and resource use, human health, and environmental safety. Indicators:

A. Time, cost, and procedures for business registration and licensing of a mid-sized staple grain farm. Requirements may include national or local trading licenses, chemical storage requirements, workplace or employee registration, environmental permits, and company registration.

B. Index on access to business registration information.

Case Study Farm Crop Rice Farm size 50 hectares Location Rajshahi Legal Form Sole Proprietorship Annual Revenue BDT 29 million Land tenure 50 year lease Market Farm gate, local market

Bangladesh

Procedures, Time, and Cost to Start-up a Farm1

No. Procedure Time (days)

Cost (US$)2

Agency

1 Local Trade License The trade license is a prerequisite to operating any business in Bangladesh and is specific to the union or municipality. Companies with multiple offices across municipalities would need a trade license for each location. Facilitation fees are common.

5-7 36-61 depending on the amount of authorized capital – average of 49 used

Relevant union council in Rajshahil

2 Tax Identification Number (TIN) Certificate The TIN certificate has no official cost. In practice, all respondents noted paying “handling charges” averaging BDT 5,000 (and ranging up to BDT 10,000) in order to facilitate the process. To obtain a TIN, businesses must provide two copies of a passport size photo, the applicant’s national ID card, the company’s local trade license, and proof of a bank account. Additionally, a value-added tax (VAT) certificate is necessary for farms engaged in exporting or food processing (not applicable to the case study farm). The VAT certificate takes an average of seven days to obtain from the National Revenue Board at no

4 0 National Revenue Board

1 Data highlighted in yellow are minimally confirmed by experts 2 Exchange rates as of June 2012 (BDT 81.98 per US). Costs are rounded to the nearest dollar.

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official cost. Unofficial costs average BDT 5,000.

Total 2 procedures 10 days US $49

Access to Business Registration Index (0-5)

Question Index Score: 4

Comments

1. Are registration documentation and information on fees publicly available?

Yes

2. Are registration documentation and information on fees available online?

No

3. Is registration possible in every state/province? Yes The local trade license is issued at the union (local/municipal) level. The TIN certificate is issued by the National Revenue Board, which has offices in each of Bangladesh’s seven divisions.

4. Are registration steps the same regardless of business size (measured by size of workforce or revenue)?

Yes

5. Are registration steps the same regardless of the nationality of ownership?

Yes

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Obtaining Inputs: Seed Strong seed and fertilizer regulations and institutions promote farmers’ access to high-quality seed while making the licensing process for suppliers efficient and transparent. Competition is key: more suppliers and an extensive distribution network ensure a greater supply of affordable, quality seed. Overly-burdensome regulations can stifle the sector by discouraging new entrants and creating incentives for agrodealers to operate informally. Indicators:

A. Time, cost, and procedures to obtain operational licenses for a seed supplier. Requirements may include import license, seed dealer license, license for storage facilities, national or local trading licenses, and inspections.

B. Time, cost, and procedures to register a new proprietary seed variety.

Case Study Seed Supplier Activities Import, Wholesale

Distribution, and Retail Sales (does not grow or multiply seed)

Type of Seed Hybrid Rice Location Dhaka Ownership Domestic, non-state-owned

enterprise

Licenses and Permissions for Seed Provider

No. Procedure Time (days) Cost (US$) Agency 1 Local Trade License

The trade license is a prerequisite to operating any business in Bangladesh and is specific to the union or municipality. Companies with multiple offices across municipalities would need a trade license for each location. Facilitation fees are common.


Dhaka City Corporation or relevant union council

2 Import Registration Certificate (IRC) An IRC is required for any business importing goods into Bangladesh. The agro-input provider must apply to the Export/Import Authority within the Ministry of Commerce. Required documents include: • Membership Certificate to Chamber of Commerce & Industry • National ID card • TIN • Bank solvency certificate The IRC costs a minimum of BDT 5,000 depending on the company’s amount of authorized capital, and is valid for one year.

10 61 Office of the Chief Controller of Import & Export (CCIE), Ministry of Commerce

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Procedures, Time, and Cost to Register a Proprietary Staple Grain Variety


Cost (US$) Agency

1 Application for registration of a new proprietary plant variety for notified crops According to the Seed Act (Amendments in 1997 and 2005), seed companies must register new notified crop varieties with the Seed Certification Agency (SCA). There are five crops “notified” by the Government of Bangladesh – wheat, rice, jute, seed potato, and sugarcane. Notified crops must undergo a mandatory two seasons of field testing in order to be registered, and applicants must provide detailed breeder’s results for the new variety. A company seeking to register a seed variety already in use in another country would apply to the Plant Quarantine department in the Ministry of Agriculture for an import permit. The permit would allow them to procure a maximum 20 kg of seed as a sample. The import permit takes an average of five days to obtain at a cost of US $1. All non-notified crops can be produced or introduced immediately upon obtaining a registration number from the National Seed Board within the Ministry of Agriculture. Registration numbers are issued without testing or cost. Companies typically test the quality of new non-notified varieties themselves before sale, and such seed would be sold as “Truthfully-Labeled Seed.” Seed providers can also opt for a voluntary certification process by the SCA – identical to the testing process for notified seed – which allows them to sell the seed as “Certified Seed.”

10 0 SCA

3 Seed Dealership License All seed dealers must be licensed. The seed dealership license covers all seed-trade related activities, including import, wholesale distribution, and retail sale. About 16,000 licensed dealers currently operate in Bangladesh. The dealership license does not require any inspection, but each application requires the signature of an officer from the Ministry of Agriculture or the Bangladesh Agricultural Development Corporation (BADC) who can vouch that the company is duly engaged in the seed industry.

7 0 Field Offices of Seed Wing, Ministry of Agriculture


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2 Multi-location performance trials The SCA first determines the applicant’s seed sources. The Variety Testing wing then carries out varietal description activities (DUS tests) and conducts multi-location field evaluations (VCU tests). Field tests cost BDT 36,000 per year per variety, which includes one season of testing in nine agro-ecological zones (or two years and BDT 72,000 total). Given Bangladesh’s growing seasons there are limited times of year to conduct field testing. Winter rice (boro) has one season per year, and the company would apply in September or October. Summer rice also has only one season a year, while maize can be grown year-round so two seasons of field tests can be completed in one year.

730 878 SCA

3 Recommendation for release The results of field tests are evaluated by the SCA and a recommendation is made to the National Seed Board for release of the new variety.

30 0 SCA

4 Variety release by National Seed Board The National Seed Board, chaired by the Secretary of the Ministry of Agriculture and whose membership includes the SCA, Bangladesh Agricultural Research Council, Ministry of Agriculture, representatives of seed companies, seed scientists, universities, and research institutes (BIRI for rice, BARI for wheat), meets twice a year to review new seed varieties. Once approved, the Board issues a registration certificate for the new variety.

60 0 National Seed Board, Seed Wing, Ministry of Agriculture

5 Gazette notification To market seeds of notified crops, the new variety must be on the national list of varieties through publication in the official gazette.

30 0 Government Printing Bureau


Question Response Comments 1. Does the authority in charge of seed variety

registration accept testing data from the breeder?

N/A Data for this index was not collected for this country

2. Do current regulations allow for a faster or facilitated registration process for seed varieties that have already been registered or field-tested in another country?

N/A

a. If YES, with which country(s) and what is the facilitated process?

N/A

3. Is Bangladesh party to a regional agreement with respect to common procedures for variety testing, registration, and/or release that is effectively implemented in practice?

N/A

a. Is it implemented in practice? N/A

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Obtaining Inputs: Fertilizer Strong seed and fertilizer regulations and institutions promote farmers’ access to high-quality fertilizer while making the licensing process for suppliers efficient and transparent. Competition is key: more suppliers and an extensive distribution network ensure a greater supply of affordable, quality fertilizer. Overly-burdensome regulations can stifle the sector by discouraging new entrants and creating incentives for agrodealers to operate informally. Indicators:

A. Time, cost, and procedures to obtain operational licenses for a fertilizer supplier. Requirements may include import license, fertilizer dealer license, licenses for storage facilities, environmental permit, national or local trading licenses, and inspections.

B. Index on the legal and institutional framework for the fertilizer sector.

Case Study Fertilizer Supplier Activities Import, Wholesale

Distribution, and Retail Sales (does not manufacture or repackage fertilizer)

Fertilizer Inorganic Compound Fertilizer (e.g. NPK)

Location Dhaka Ownership Domestic, non-state-owned

enterprise

Licenses and Permissions for Fertilizer Provider

No. Procedure Time (days) Cost (US$)

Agency

1 Local Trade License The trade license is a prerequisite to operating any business in Bangladesh and is specific to the union or municipality. Companies with multiple offices across municipalities would need a trade license for each location. Facilitation fees are common.


Dhaka City Corporation or relevant union council

2 Membership in Bangladesh Fertilizer Association (BFA) The agro-input provider must join the relevant national business association for fertilizer in order to obtain an Import Registration Certificate and to initiate registration of a new fertilizer product. The Fertilizer Management Act (2006) stipulates that association membership is necessary “if applicable,” which is not clearly defined. In practice, companies, particularly fertilizer importers, join the BFA.

30 61

Bangladesh Fertilizer Association (BFA)

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3 Import Registration Certificate (IRC) An IRC is required for any business importing goods into Bangladesh. The agro-input provider must apply to the Export/Import Authority within the Ministry of Commerce. Required documents in the application include: • Membership Certificate to Business Association or Chamber of Commerce & Industry • National ID card • TIN • Bank Solvency Certificate The IRC costs a minimum of BDT 5,000 depending on the company’s amount of authorized capital, and is valid for one year.

10 61 Office of the Chief Controller of Import & Export (CCIE), Ministry of Commerce

4 Dealership License – Importing The Department of Agricultural Extension (DAE) licenses fertilizer providers. The DAE has three types of licenses within the dealership license for: importers, manufacturers, and suppliers (both wholesale and retail). An import license covers all activities, including import, repackaging, wholesale and retail sale. A company need only obtain one of the three types of licenses. A supplier license typically takes seven days and BDT 1,000 to obtain. Along with the registration fee, applicants for a dealership license must provide: • Membership in the Bangladesh Fertilizer Association (for importers) • Board of Investment/Board of Small & Cottage Industries Corporation registration (for manufacturers) • Import Registration Certificate • Local Trade License • VAT Certificate • TIN • National ID card Note that fertilizer is also imported and distributed through government channels. The government-owned Bangladesh Chemical Industries Corporation (BCIC) manufactures urea, TSP, MOP, and DAP fertilizer and sells through a network of licensed wholesalers and dealers. A wholesale license from BCIC has no fee, but requires a deposit of BDT 200,000. Retailers place a deposit of BDT 30,000. The wholesale license is issued to up to 10 firms per upazila while there can be up to nine BCIC-licensed retailers at the union level. The BCIC sets the price of fertilizers and distributors make a set profit margin. Respondents noted that fertilizer sales are subsidized, sometimes up to 50% of the total cost. According to one respondent, the BCIC has about 80% market share of total fertilizer sales. The private sector does not actively compete

30 12 DAE

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Fertilizer Distribution Index (0-11)


Comments

1. Is there a fertilizer law(s) and regulations? Yes Fertilizer (Management) Act, 2006 and Fertilizer (Control) Order, 1999.

2. Does the fertilizer law or regulations specify the following:

a. Set truth-in-labeling guidelines? (e.g. fertilizer bag labels must include the Netherland’s official language(s), net weight or volume, “guaranteed analysis” of minimum levels of nutrients claimed, directions for use, and health and safety precautions)

Yes Clause 7 in the Fertilizer Control Order of 1999: Fertilizer bag labels must include the following either in Bengali or English: • Name of fertilizer • Nutritional contents • Net weight • Manufacturer’s name and the country • Guaranteed analysis of minimum levels of nutrients claimed

b. Prohibit the sale of open, mislabeled, or adulterated bags of fertilizer?

Yes

c. Establish rules for the accreditation of third-party certification of fertilizer quality? (e.g. an accredited private laboratory network)

No Certification can only be done by five approved government laboratories.

3. Is there a regulatory body (such as the Ministry of Agriculture) with the mandate to enforce the law and regulations by punitive action?

Yes • Ministry of Agriculture, Fertilizer Wing • DEA • Fertilizer and Seed Monitoring Committees at the Upazila level (Sub-district)

4. Does the regulatory body have the authority to inspect:

a. Fertilizer production and storage facilities? Yes b. Fertilizer at the point of sale (e.g. at retail shops)?

Yes

5. Does the regulatory body(s) have the authority to take fertilizer samples and conduct laboratory analysis? (e.g. to measure nutrient content)

Yes

a. Do sampling and analysis methods follow international standards? (e.g. ISO standards or

Yes Bangladesh Soil Resource Development Institute (SRDI) has a published testing methodology book

with the BCIC in selling the four main fertilizer types, and instead provides other fertilizer products. Fertilizer manufacturers (not applicable to this case study) would additionally require an Environmental Clearance Certificate from the Department of Environment. There is no inspection or cost to the certificate. In practice facilitation fees common – respondents listed costs of BDT 5-10,000.

Total 4 procedures 76 days US$183

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International Fertilizer Association guidelines) which should follow international standards.

6. Is there a tiered licensing system for fertilizer suppliers that sets license and fee requirements in proportion to the activities and risks of business in each stage of the supply chain (e.g. importers, distributors, and retailers)

No All fertilizer suppliers must obtain a Fertilizer Dealer License regardless of the size of the business or the business activity.

7. Is there a government monopoly or major public sector role in procurement, importation, or distribution of fertilizer?

Yes

For Urea, only the private sector is involved in procurement, production, and distribution. For TSP (phosphate) and MoP (potash – potassium) fertilizers, government and private sector importers procure fertilizers from international markets.

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Accessing Rural Land Farmers must have a secure interest in land to invest in the long-term success of their farms. Yet the transfer of rural land is often lengthy and unpredictable, reflecting poor property systems: fake or non-existent titles, decaying paper records, inaccurate land surveys, and lack of surveyors. As a result, rural land transfers are costly and inefficient, and may not provide farmers with the security they need. Indicators:

A. Time, cost, and procedures to transfer farmland. Requirements may include cadastral survey, title and encumbrances search, valuation and inspection, government consent to transfer, stamp duty and transfer tax, and registration of deed of sale.

B. Index on access to property registration information.

C. Index on legal framework for leasing farmland, including customary land.

Case Study Land Transaction Buyer & Seller Both Buyer and Seller are

LLCs Farm size 50 hectares Purchase Price US$35,148 Location Rajshahi Land Tenure Titled land

Procedures, Time, and Cost to Register the Transfer of Agricultural Land


Cost (US$) Agency

1 Verify title documents and ascertain title The first step is to test/verify the title deed. A title deed may be tested in the concerned Sub-registry office to show that the deed provided by the Seller is in order, and all Bia deeds (proof of previous owner(s)) tested to prove a chain of ownership. Time required depends on availability of information/docs, access, co-operation of concerned office, etc. Speed money may be required; otherwise the timeframe will be longer. Property ownership may be shown by way of a record of rights (RoR) kept in the concerned land office (i.e. Union Land Office (Union level), Office of Assistant Commissioner of Land (Upazila level) or District Record Room (District level), as necessary). RoR is locally known as Khatian/Parcha, and includes a Khatian Number, District and Upazila name, Mouza (a particular constituency) name, Jurisdictional List (JL No.) number, name of the owner who possesses the land, plot number, total area of land in a plot, exact area of land, etc. To get a certified copy of the RoR, a minimal amount of BDT 100 is required (plus extra fees from BDT 2,000-3,000). It takes 10-30 days; if facilitated, it can take 1-2 days. These are typically obtained at the District level.

10-30 9 Union Land Office, Office of the Assistant Commissioner of Land, District Record room, settlement office (for land survey at Upazila or Divisional level), concerned Sub-registry office

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It must also be confirmed that the proposed land has not been mortgaged with any bank or financial institution; is not securing payment with any other institution or individual; has not been leased out to others; and has no legal claim or any litigation case against it and the deed has not been tendered as evidence before any jurisdictional court of litigation.

2 Mutation in Seller’s name The Seller must get the land mutated in his/her name with the concerned land office, otherwise one cannot sell. The Seller has to apply to the Land Office, and the Land Office has to see that the Seller purchased the land using proper methods, then they will mutate his/her land. After receiving an application from the Seller, the Land Office gives notice to concerned persons. Around 15-30 days are given for filing any objections. If there are no objections, the Land Office mutates the land in the name of the Seller; registers his name in the Record of Rights, giving him a new title; and issues a holding number to the Seller, by which government collects rent. This process takes 3-6 months (3 months if no objections), and involves a minimal fee of BDT 700-1,500. To register in a Sub-registry office, a certified copy of a mutation Khatian in the name of the present owner (Seller) is necessary. It is the Buyer’s duty to check that the land is mutated in the Seller’s name.

90-180 9-18 Land Office

3 Obtain non-encumbrance certificate and other documents and assess potential claims The Buyer must make sure that there is no valid claim from adjacent land owners, government authorities or other individuals; perform physical verification regarding access to the land; collect a Mouza Map published by the Office of the Land Survey; collect up to date rent receipts from the Union land office that has been paid by the Seller; obtain a non- encumbrance certificate from the concerned authority (though this step does not often occur in practice); obtain a Duplicate Carbon Receipt (DCR) regarding the land at the Upazila land office (~BDT 250); and obtain other documents relating to the property. These steps may require speed money up to BDT 1,000. Note that because the land described in the case study exceeds the maximum limit of holding land, permission will be required from the concerned Office of Assistant District Commissioner of Land (Revenue).

5-10 5 Multiple land offices

4 Registration of deed of sale and payment of stamp duty Before formal registration, a Contract for Sale is created and executed between the Seller and Buyer (locally known as “Baina-nama”). To give legal effect to a Baina-nama, it has to be registered. When a Baina-nama is registered, then the formal Deed of Sale is submitted to the concerned Office of Sub-register under the Ministry of Law in the applicable Upazila for final registration within 30 days after execution of

2-5 1054 (3% of consideration for stamp duty)

Sub-registry office

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the Baina-nama. The deed must be prepared in a government-prescribed form. After registration, the Office of Sub-register will issue the Buyer a receipt to collect the new title deed. It takes two to three years to obtain a new title. The Buyer can get a certified copy of the title deed in the meantime, while waiting for the official document.

5 Payment of taxes and fees The 2% registration fee is payable to the bank in favor of the sub-registry office and the receipt is to be presented at the moment of applying for registration.

1-2 1054 (1% for local government tax, 2% for government registration fee)

Bank designated by sub-registry office

6 Submit application to local land office After completing registration, Buyer has to submit an application to the local Land Office to claim title/ownership of land and submit a copy of the deed for record correction and mutation in his/her own name, presenting the receipts of payment for registration fees. The application also includes a schedule of the property and a copy of the Parcha. The land office then sends a proposal letter for mutation to the land office at the Union level.

45 61

Office of Assistant Commissioner of Land

7 Pay land tax at Union land office Buyer pays land tax and collects a rent receipt certificate, which is taken back to the land office at the Upazila.

2-3 38 (BDT 25 per acre of agricultural land)

Union Land office

8 Mutation in Buyer’s name After receiving the rent receipt certificate, the land office will mutate the name, open a book, give the Buyer a holding number without which Buyer cannot pay local land tax, and provide a duplicate carbon receipt.

2-3 Included in Procedure 6

Office of Assistant Commissioner of Land

Total 8 procedures 157-278 days

US $2,235

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Access to Property Registration Index (0-7)


Comments

1. Is real property registration possible in every state/province?

Yes There are no barriers for registration except specific reasons, i.e. government property.

2. Can real property registration be accomplished via an automated, online process?

No Manual process.

3. Is information and documentation about the process of real property registration available on the Internet?

No There is limited information available.

4. Are real property registration steps and timeframes clear?

Yes If there is a registered contract (“baina”), then the property has to be registered within 30 days of execution (Sec 17A, Reg. Act, 1908)

5. Are real property registration steps the same regardless of property size?

Yes

6. Are real property registration steps the same regardless of the nationality of ownership?

Yes When the purchaser is of different nationality, permission is required from the proper authority, i.e. Ministry of Land.

7. Is quality of data in the land registry reliable, with few cases of dual or fake titles?

No Data is not reliable.

Leasing Rural Land Index (0-9) Responses Based on Titled Land


Comments

1. Do formal domestically-owned entities (i.e. corporations, partnerships, cooperatives, sole proprietorships) have a legal right to lease land?

Yes Constitutional and statutory right.

2. Do formal entities have a de facto right to lease land?

Yes Subject to prior consent of the entity’s partner or partners, and if the activity is covered by the objective of the corporation or cooperative.

3. Is approval required from a governor or similarly high-level ministerial official to enter into a lease for land?

Yes For freehold property, no approval is required. For leasehold or any authoritative property holder prior approval required from original lessor or proper authority.

4. What is the statutory maximum duration, if any, for a lease of land?

No statutory maximum

A government lease has a maximum of 99 years. There is no specific provision for individual entities regarding the time period of a lease. It is advisable not to enter into any lease more than 99 years and customary practice in Bangladesh is to not exceed 99 years.

5. What is the statutory maximum amount of land, if any, that a formal entity can acquire?

801 hectares (60 bigha)

The maximum amount of land an entity can acquire depends on type of property (i.e. residential, commercial) and type of public body. For agricultural lands, the maximum is 60 bighas (1 decimal= 0.4046 hectares; 33 decimals = 1 bigha). Reference Section 4 of the Land Reforms Ordinance, 1984.

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6. Are there often statutory restrictions on the right to produce on the land based on the leaseholder’s own preferences that impede the leaseholder’s ability to undertake agricultural production?

No There is no statutory restriction - as per law, in agricultural land (under land classification as “agricultural”) one can produce any agricultural product. However, there may be environment and other social issues to be considered.

7. Are there often statutory restrictions on the leaseholder’s ability to subdivide, sublease or rent the land?

No If nothing is mentioned in the lease agreement, then the lease holder is free to subdivide or sublease or rent. It is advisable that every lease include terms for sublease in the agreement. When you lease out a land from any government authority it you must obtain approval from that authority.

8. Can a long-term (50+ years) leasehold interest in land be transferred to another formal entity?

Yes Again it depends on the terms and conditions of lease agreement.

a. Without lessor approval? No Lessor shall be fully informed the reason. In terms of government land, prior approval is mandatory.

9. Can a long-term (50+ years) leasehold interest in land be registered and recorded in a manner that protects such registered interests?

Yes Formal registration and mutation conduction take place. For a long term lease, registration of the lease is mandatorily required to protect the interest on the land leased.

10. Does the legal framework allow long-term leaseholders (50+ years) to obtain mortgages on land?

Yes If there is no dispute related with that land.

a. Do such mortgages occur in practice? Yes In urban areas this is normal practice. For agricultural leases it seems difficult to mortgage the land.

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Access to Finance Access to finance is one of the largest obstacles faced by agribusinesses everywhere. Agribusinesses, particularly farms, often have few assets beyond their land and movables such as farm equipment, crops in the field, and inventory. A secured transactions framework – the focus of this topic – allows agribusinesses to unlock the value of their assets, particularly movable assets, to obtain a loan. Building blocks of a secured transactions system such as a movables collateral registry or warehouse receipts system facilitate access to finance for the agricultural sector. Indicators:

A. Types of agricultural collateral allowed by the legal and regulatory framework and accepted by financial institutions in practice.

B. Quality of existing collateral registries for movable collateral.

C. Strength of legal framework for warehouse receipts systems.

Agricultural Collateral Index (0-10). Index Score: 8

Type of Collateral Allowed by Law

Comments

1. Farm equipment Yes Movable property can be encumbered through a fixed charge. Typically only tractors and vehicles are accepted.

2. Crop in field Yes Crops not typically considered movables and most banks do not accept as collateral except ag-oriented banks such as Krishi Bank. For sole proprietors (which are not registered entities), hypothecation is used where borrower maintains ownership over pledged collateral through contractual agreement between parties.

3. Crop in warehouse No Crops not typically considered movables. No law in place. Currently only available through BADC-funded pilot of warehouse receipts system.

4. Livestock No Livestock not typically considered movables. Not done in practice due to issues with managing collateral.

5. Inventory Yes Allowed under a general floating charge for registered companies.

6. Patented plant variety

No

7. Futures contract No 8. Accounts receivable

Yes Allowed under a general floating charge for registered companies.

9. Buy/sell agreements

Yes Allowed under a general floating charge for registered companies, though doesn’t happen in practice.

10. Land and water rights

Yes Land only, not water rights. Land is taken as a mortgage and is the preferred and primary means of collateral.

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Movables Collateral Registry Index (0-11)

Question Index Score: 4 Comments

1. What type of registry exists for registering movable collateral? Please specify the name of the movable collateral registry(s).

Multiple registries for different types of assets or security interests

No specific movables collateral registry exists. Land (mortgages), hypothecation for fixtures, and general charges for movables are registered with the concerned Office of Sub-Registrar. Charges from sole proprietorships, which are not registered companies, are not registered. Mortgage deeds, general charges and hypothecation to Registrar of Joint Stock Companies (RJSC) for loans to LLCs and other registered companies. Mortgages also to Office of Assistant Commissioner of Land for registering land. Offices of Sub-Registrar for RJSC and Office of Assistant Commissioner of Land are located in every upazila (about 500 branches). The RJSC has four branches in the country. Office of Assistant Commissioner of Land is at the district level.

2. Can security rights for a broad range of tangible and intangible movables (i.e. equipment, crops, livestock, accounts receivable, inventory, futures, etc.) be registered in the movable collateral registry?

Yes In theory, general charges cover a broad range of movables. Livestock and crop are not typically considered movables.

3. Can security rights for all types of debtors, including sole proprietors, be registered in the movable collateral registry?

No Collateral from sole proprietors not registered.

4. Does the movable collateral registry have a centralized database that consolidates information on all types of security interests (charges, chattel mortgages, etc.) and all types of debtors from registry branches across all geographic regions of the country?

Yes The Office of Sub-Registrar has Upazila-level offices but is centralized at the national level. Country-wide information is searchable only from the national- level office.

5. Does the movable collateral registry operate a fully electronic database system (as opposed to paper-based)?

No Physical files.

6. Can registration and searching in the movable collateral registry be performed online?

No

7. Is data from the movable collateral registry reliable?

No Physical files are not all up to date.

8. Is real-time information from the movable collateral registry widely accessible to the general public without any restrictions, including by

No

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those located in commercial centers outside of the capital?

9. Can registration in the movable collateral registry be performed within a reasonably rapid time frame and with flat, reasonable fees?

Yes Registration takes two to three days and charges are reasonable. Registration costs depend on the value of the land or other collateral.

10. Can a search of the movable collateral registry be performed within a reasonably rapid time frame and with flat, reasonable fees (i.e. free or less than US$5)?

No Searching takes two to three days (depends on how old the company is) and charges are reasonable. Cannot search all four RJSC branches from one location, so may need to search in multiple locations.

11. Does the secured lending system provide for priority based on order of filing?

Yes

Warehouse Receipts System Index


Comments

1. Are there any laws or regulations pertaining to warehouse receipts systems currently in force?

No

2. Do such laws or regulations specify an entity tasked with registration, licensing, and oversight of warehouses?

2.a. Is such entity private or public? 3. Does the legal and regulatory framework

provide clearly established criteria for registering a warehouse, such as specifications for the physical facility and equipment (ex. silos, cleaners, fumigators)?

4. Does the legal and regulatory framework require warehouse operators to be licensed and establish clear requirements for obtaining an operator license?

5. Does the legal and regulatory framework provide for commodity standards and grading systems?

5.a. Are such commodity standards and grading systems enforced effectively?

6. Are there established procedures and standards for handling the commodities in warehouse storage?

7. Does the legal and regulatory framework provide for regular inspections by the regulating entity or licensed third-party inspectors?

8. Does the legal and regulatory framework provide for consequences/penalties for non-compliance of the handling of commodities in storage?

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9. Does the legal and regulatory framework clearly specify who bears the risk of loss, destruction, spoilage or damage?

10. Does the legal and regulatory framework specifically recognize warehouse receipts as a document of title and a security instrument that is negotiable, transferable, and subject to encumbrance?

11. Are warehouse receipts registered in a centralized registry with an electronic database that is easily accessible to the general public?

12. In case of liquidation or bankruptcy, does the legal and regulatory framework clearly specify that commodities stored in the warehouse are immune from the reach of warehouse operators’ creditors?

13. Under the legal and regulatory framework, which of the following items are warehouse receipts required to contain:

13.a. Name and address of licensed warehouse operator

13.b. Designation and grade of warehouse 13.c. License number of warehouse

13.d. Name and address of depositor 13.e. Relationship between warehouse operator and depositor if not a strictly

disinterested custodianship

13.f. Description and quality of goods 13.g. Whether goods are insured or not

13.h. Net weight of goods 13.i. Other: [ ]

14. Does the legal and regulatory framework provide for a specific forum to resolve disputes relating to warehouse receipts systems?

20

Trading Agricultural Goods Trade is a key component of economic growth and regional food security. However, specific regulatory controls unique to the agriculture sector such as SPS inspections, trade licensing, and export controls, can restrict trade. These requirements are often driven less by the interests of the agricultural sector than by political or social concerns. Fewer requirements, improved coordination between government agencies, reduced inspection and wait times, and better physical infrastructure and electronic systems all contribute to a fast and reliable trade system. Indicators:

A. Time, cost, and documents to export a widely-traded agricultural commodity.

B. Index on legal framework for phytosanitary certificates for export.

C. Time, cost, and documents to import hybrid seed.

D. Index on trade facilitation measures.

Product Jute, aromatic rice, coconut, frozen vegetables, frozen fish and shrimp

Export Consignment

Consignment is exported in a standard, non-refrigerated 40-foot container.

Value US $20,000 Point of Exit Chittagong Port Product Hybrid Rice Seed Import Consignment

Seed is transported in a standard 40-foot container, packed in 20kg sacks.

Value US $20,000 Point of Entry Chittagong Port Company Private LLC, majority

domestically-owned, with 40 employees

Carrier Logistics or freight forwarding company providing point-to-point service to many international destinations

Exporting an Agricultural Commodity

Documents to Export Commodity

Time (days)

Cost (US)

Licenses and Documents Preparation

18 $153

Customs Clearance and Inspection

1 $ 200

TOTAL 19 days

$ 353

Documents to Export Commodity Letter of Credit

GSP

Phytosanitary Certificate

Fumigation Certificate

Certificate of Origin

Commercial Invoice EXP Form

Packing List

Bill of Lading

TOTAL: 9 documents

21

Importing Hybrid Seed Procedures to Import Hybrid Seed

Time (days)

Cost (US)


19 $114


10 $400

TOTAL 29 days

$514

Trade Facilitation Index (0-7)

Documents to Import Hybrid Seed Pro forma Invoice

Import Permit

Letter of Credit

Phytosanitary Certificate Certificate of Origin

Bill of Lading

Commercial Invoice

Packing List

Certificate of Conformity

TOTAL: 9 documents

Question Index Score: 1.5

Comments

1. Can the documents required to import/export agricultural goods be submitted in advance of the consignment’s arrival at Customs?

All documents

Provisions in Bangladesh Customs law allow: (a) submission of manifest prior to the arrival of conveyance/ goods, and (b) lodging and processing of Customs declaration (e.g. bill of entry) documentation prior to the arrival of the goods. The only condition for allowing advance lodgment of the declaration is that the vessel or the aircraft by which the goods have been shipped for importation into Bangladesh is to arrive within thirty days from the date of such presentation. ASYCUDA++ is in place in Bangladesh and can provide for pre-arrival treatment. With the current introduction of ASYCUDA World Bangladesh hopes to facilitate a full pre-arrival regime.

2. Can the documents required to import/export agricultural goods be submitted electronically?

Some documents

ASYCUDA World has recently been introduced in Chittagong Custom House, which handles the bulk of international trade in Bangladesh. Scanned copies of documents can be sent electronically at Chittagong Custom House as attachments to Bills of Entry/Bills of Export. All other customs stations currently use ASYCUDA++, and therefore, only Bills of Entry/ Bills of Export can be submitted electronically. Other documents need to be submitted manually. There is an aggressive ASYCUDA World roll out plan and the new system may be in place by 2017.

3. Do Customs and other agencies utilize a risk management system to screen goods for physical inspection?

No There is currently no single, standard risk management system in place. Risk management systems exist in Bangladesh and are implemented by different Customs stations. However, Bangladesh Customs has not yet established any

22

Index on Phytosanitary Certificates for Export (0-9)

elaborate procedure that could ensure introduction of a common risk management system across the country. In the case of other agencies, the use of risk management is not evident. This is because sanitary and health inspections are specific to particular categories, such as food products, and therefore, are applicable to all imported consignments of such categories.

a. If YES, is the risk management system electronic?

N/A

4. Does Customs use audit-based controls to reduce the frequency of cargo inspections for trusted traders?

No Currently there is no system of Post Clearance Audit (PCA)-based clearance controls. An authorized economic operator system has not yet been introduced in Bangladesh. In the absence of an efficient PCA system, the link between PCA and risk management is yet to be established in Bangladesh.

5. Are all required physical inspections of goods (by Customs and any other relevant agencies) carried out at the same place and time?

No For agricultural goods, Customs does not require any physical inspection and will only rarely carry out such inspections. Other agencies, such as Plant Quarantine Department (for quarantine testing) and Bangladesh Atomic Energy Commission (for Radiation testing) collect samples from all relevant consignments of agricultural goods. These agencies can only collect samples after obtaining permission from Customs and do not do their inspections and sample collection at the same time; however, the sample collection is carried out at the same location.

6. Are consignments of imported seed allowed to enter Bangladesh (and remain in storage) while samples undergo laboratory analysis?

No Goods are released only after quarantine testing, which is conducted after the importation. During testing the goods are held in a secure Customs area. The Department of Agricultural Extension’s Plant Quarantine Department tests germination rates of samples from each imported seed shipment. Germination tests reportedly take three to seven days depending on the type of seed and germination conditions.


Comments

1. Is Bangladesh a signatory of the International Plant Protection Convention (IPPC)?

Yes https://www.ippc.int/ countries/Bangladesh

2. Does the National Plant Protection Organization (NPPO) follow international guidelines (ISPM 7 and 12) on the issuance of phytosanitary certificates and requirements for

Yes Per Bangladesh Plant Protection Act, 2011 (not available online). New regulations are currently being drafted. The current rules are still in force: Destructive Insect and Pest Rules, 1966 (Amended 1989).

23

phytosanitary management?

3. Does the NPPO provide information to exporters on destination country phytosanitary requirements? (e.g. import document requirements, list of quarantine pests)

No Requested from the Plant Protection Wing, Department of Agricultural Extension (DAE).

4. Does the NPPO provide information on obtaining a phytosanitary certificate for export (e.g. documents and fee schedules for sample collection, testing, and issuing the certificate)?

No As per the official fee schedule. Fees vary for different commodities.

5. Can exporters request a phytosanitary certificate on the internet?

No

6. Can exporters make an electronic payment for phytosanitary export certification?

No

7. Can inspection to obtain a phytosanitary certificate for export be conducted at:

a. The exporter’s warehouse or storage facility?

Yes

b. Bonded warehouses? Yes However, food and agri-products are not typically stored in local bonded warehouses.

c. All points of exit from Bangladesh (including land, air, and sea ports)?

Yes Two seaports (Chittagong, Mongla), three airports (Dhaka International Airport, Chittagong, and Sylhet), and the National Board of Revenue (Customs) maintains land ports with India, Myanmar, and Nepal.

8. Does the NPPO notify exporters of the reason(s) for rejecting an application for a phytosanitary certificate?

Yes Exporters are notified accordingly.

9. Does the NPPO enter into mutual equivalence agreements with main trade partners when phtyosanitary measures are demonstrated to achieve an equivalent level of protection?

No

24

Enabling Contract Farming Contract farming can integrate smallholder farmers into the value chain, guarantee markets and prices for farmers, and improve farmer access to mechanization and inputs. However, the contract farming system poses risks to both farmers and buyers. The Enabling Contract Farming topic measures key legal components that facilitate contract farming and mitigate the risks. For example, effective public grades and standards enable arms-length transactions and standardize trade, while dispute resolution mechanisms allow agribusinesses to resolve conflicts in a timely and affordable manner. Indicators:

A. Index on legal framework for contract farming. B. Index on system for establishing public grades

and standards for a widely-traded staple crop. C. Index on access to expedited or alternative

mechanisms to the formal court system to resolve contract disputes.

Legal Framework for Contract Farming (0-7)


Comments

1. Does the legal framework provide the freedom of contract to all parties that may seek to engage in contract farming, including cooperatives, farmers associations, agribusinesses, and women?

Yes Section 11, Contracts Act (1872). The Land Reform Ordinance (1984) deals specifically with contract farming. There is also a prescribed contract for entering into contract farming, see Schedule 2 (CHA) of the Land Reform Rules (1984).

2. Are there legal impediments to entering into tripartite contractual arrangements, for example between banks, farmers, and buyers?

No There are no specific provisions on tripartite arrangements in the relevant laws.

3. Are the parties to a contract freely allowed to establish prices for payment?

No Under the Land Reform Ordinance (1984), the parties to a contract farming agreement share the produce. Section 12 states: 1) The produce of any barga land shall be divided in the following manner, namely: a) One-third shall be received by the owner of the land; b) One-third shall be received by the bargadar for their labor; c) One-third shall be received by the owner or the bargadar or by both in proportion to the cost of cultivation, other than the cost of one.

4. Does the legal framework recognize force majeure (i.e. unpredictable events such as natural disasters or pest outbreaks that are beyond the parties’ control) and its use as a reason for non-performance?

Yes/No There is no such provision in the Land Reforms Ordinance (1984). The Contract Act (1872), Section 56 however stipulates that in cases of frustration of contract, the contract will become void. This may not occur commonly in practice, however.

5. Does the legal framework recognize the right Yes Equitable remedies are available under the Specific

25

of recovery of damages in the case of breach of contract and equitable remedies such as specific performance and injunctions?

Relief Act (1877) and damages for breach of contract is provided under Sections 73, 74, and 75 of the Contract Act (1872).

6. Are duress/coercion, misrepresentation, or fraud recognized as legal defenses that can be used to void contracts?

Yes Section 19 of Contract Act (1872) stipulates that when consent to an agreement is caused by coercion, fraud, or misrepresentation, the contract is voidable at the option of the party whose consent was obtained initially.

7. Does the legal framework allow for expedited sale of seized goods or expedited legal proceedings for enforcement of contracts where perishable goods are involved?

Yes Under Order 39, Rule 6 of the Code of Civil Procedure, the court may, upon application by either party to the suit, order interim sale of moveable property which is subject to speedy and natural decay.

Grades and Standards Index (0-12) This index is scored for rice.


Comments

1. Does the legal framework provide a clear institutional mandate and authority for the development and management of public grades and standards?

Yes There are some options, like the Bangladesh Standards and Testing Institute (BSTI), the Ministry of Industry, and mobile courts.

2. Are grades and standards used to classify or describe the commodity listed above? (e.g. based on quantifiable attributes such as shape, size, weight, color, taste, texture, odor, uniformity, moisture content)

Yes Bangladesh Standard Specification for Grades on Milled Rice, 1981.

3. Are grades and standards for quality attributes consistent with guidelines issued by international standards-setting bodies (e.g. Codex Alimentarius, ISO UNECE), where appropriate?

Yes BSTI has adopted 153 Codex standards for food testing and Bangladesh has adopted 40 Codex standards as the national standard. Bangladesh has also adopted HACCP standards for domestic food processing and export industries.

4. Does a regulatory agency conduct regular inspections to ensure the commodity listed above is consistently and correctly graded/classified?

No BSTI and the Department of Agricultural Extension (DOAE) make surprise inspections and test samples in the BSTI lab.

5. Does the legal framework provide a clear institutional mandate and authority for the development and management of grades and standards pertaining to contamination and chemical residues? (e.g. Standards Authority, Ministry of Agriculture)

Yes Pure Food Ordinance, 1959. Authority: National Food Safety Advisory Council established under Section 4A of the Pure Food Ordinance, 1959.

6. Are there mandatory standards for microbial contamination and chemical residue for the commodity listed above?

No Under Sections 6 and 6A of the Pure Food Ordinance (1959), persons are prohibited from sale or use of poisonous or dangerous chemicals, toxic food colors, etc., but there is no specific provision for the commodity listed above.

7. Are standards for contamination and chemical residues consistent with guidelines issued by international standards-setting bodies (e.g. Codex Alimentarius, ISO), where appropriate?

No There are no specific provisions regarding contamination and chemical residue for the commodity as specified. But BSTI has adopted 153 Codex Alimentarius standards.

26

8. Does a regulatory agency conduct regular inspections to ensure that the commodity listed above conforms to standards on microbial contamination and chemical residues?

Yes BSTI, the Ministry of Agriculture, and City Corporations conduct regular inspections but not specifically for the commodity listed above.

9. Do regulatory agency(s) convene technical committees with relevant private and public sector stakeholders to facilitate and coordinate standards-setting?

No Technical committees are generally formed with researchers and university professors, along with officers of BSTI.

10. Does the process to develop new public grades or standards for agricultural commodities include the following types of public outreach and input?

N/A

11. Are there laboratories with the equipment to accurately measure and test attributes of agricultural commodities? (e.g. electronic scales, moisture meters)

Yes, both public and private labs

a. Are there ISO accredited laboratories in Bangladesh?

Yes

12. Are there uniform units of measurement across all food and agriculture-related commerce

Yes The Standards of Weights and Measures Ordinance, 1982.

13. Do traders have access to standard tools for weighing, measuring, and sorting agricultural products?

Yes

Dispute Resolution Mechanisms Index (0-8)


Comments

1. Do expedited or more accessible mechanisms exist within the formal court system to resolve contract disputes (i.e. commercial courts, small claims courts, village courts)?

Yes Small Cause Courts and Village Courts are both part of the formal court system. Small claims court is available in metropolitan areas. If the dispute arises outside metropolitan areas (and therefore cannot go to a Small Cause Court), the parties have discretion to go to the Village Court under the Village Courts Act 2006 where the claim is for up to BDT 25,000. Village courts are formal institutions operating at the union level and are a primary step in the dispute resolution process. They are very active in Bangladesh, with around 60% of cases resolved by Village Courts, and the most accessible option at the local level, assuming both parties are from the same union.

2. Do alternative mechanisms to the formal court system exist to resolve contract disputes (i.e. mediation, arbitration)?

Yes Arbitration and mediation. ADR is only applicable when the parties have agreed upon an ADR method for resolving any dispute. Under the Arbitration Act 2001, both parties must agree in writing that any dispute will be resolved through arbitration. Many contracts in Bangladesh include arbitration clauses. Alternatively, if the parties

27

apply for mediation or arbitration during the Court proceeding, the Court must refer the dispute for mediation or arbitration under Section 89(A) & (B) of Code of Civil Procedure 1908. There are also sector-specific associations that provide dispute resolution mechanisms. Additionally, Village Mediation (also known as Salish) is available. Village Mediation is conducted by local influentials/elites in an informal way. Many NGOs in Bangladesh also assist and conduct such mediation at village level.

3. Do expedited or alternative mechanisms adequately apply standard contract law principles or arbitration/mediation principles (as applicable) when resolving disputes?

Yes Yes for arbitration. Not necessarily for Village Mediation (Salish).

4. Are the costs entailed in using such expedited or alternative mechanisms reasonable and not prohibitive (ex. total costs do not exceed the amount in dispute)?

Yes

4.a. Are the costs entailed typically less than that of the traditional court system?

No

5. Is there a minimum threshold to the monetary amount being disputed that must be met in order to use expedited forums?

No Village Courts have a maximum claim size of BDT 25,000.

a. If YES, does this threshold amount pose a barrier to claims brought by small or medium-sized agribusinesses?

N/A

6. Are expedited or alternative mechanisms typically faster than the traditional court system, with streamlined and simplified procedures?

Yes Village Courts are faster and cheaper than Magistrate or Civil Courts. Arbitration and mediation are also quicker.

7. Are expedited or alternative mechanisms readily available outside of Dhaka?

Yes Village Courts.

8. Are rulings through expedited or alternative mechanisms upheld in and enforced by the traditional court system?

Yes Arbitral awards are recognized and enforced by civil court, but enforcement can take a long time and the process can drag on.

28


C. Time, cost, and procedures for business registration and licensing of a mid-sized staple grain farm. Requirements may include national or local trading licenses, chemical storage requirements, workplace or employee registration, environmental permits, and company registration.

D. Index on access to business registration information.

Case Study Farm Crop Maize Farm size 10 hectares Location Eastern Region Legal Form Limited liability

company Annual Revenue GH₵ 20,000 Land tenure 50 year lease Market Farm gate, local

market

Ghana

Procedures, Time, and Cost to Start-up a 10-hectare Maize Farm

No. Procedure Time

(days) Cost (GH₵)3

Agency

1 Name Search and Obtain Company Registration of Forms Applicants purchase a set of Limited Liability Forms (GHC 15) and conduct a name search (GHC 10 per search). Forms can also be printed for free from the Registrar General’s Department website. The Registrar General’s Department has regional offices in Kumasi, Takoradi, and Tamale. However, business name search and issuance of certificates can only be done at the central office in Accra because the Companies Registry maintains paper records. Time for Procedure 1 includes submission of documents to/from Kumasi to Accra. In practice, respondents noted that the total time for company registration ranges from five-30 days depending on location and use of facilitation payments.

7 13 Registrar General’s Department

3 Exchange rates as of May 2013 (GHC 1.97 per US). Costs are rounded to the nearest dollar.

29

2 Authentication by Commissioner of Oaths Company registration Form 4 (Registration and Declaration of Compliance with Companies Act, 1963) must be signed by all company directors, the company secretary, and authenticated by a Commissioner of Oaths located at the Registrar General’s Department office.


3 Lodgment of Forms and Payment of Registration Fees The company must lodge the following documents at the Registrar General’s Department:

• Limited Liability Company forms • Form 3 (Registration Form: Particulars of the Company

Limited by Shares) • Form 4 (Registration and Declaration of Compliance

with Companies Act , 1963) • Company Regulations (or use of standard form

Regulations) • Consent letter from a qualified auditor • Tax identification number form

All fees can be paid in person at the in-house bank at the Registrar General’s Department office. Company registration costs GHC 175 total: Incorporation (GHC 120); Certification (GHC 15); Registration of Business Name (GHC 40). There is a 0.5% stamp duty on the company’s stated capital. The minimum amount of stated capital for a 100% Ghanaian-owned company is GHC 500, which was used to calculate the cost for this procedure. Relevant Act: Companies Code, 1963 (Act 179)


4 Obtain Certificate to Commence Business and Registration Certificate Collection of original copies of Certificate of Registration and Certificate to Commence Business, signed by the Registrar General. Registration certificates can only be issued in Accra and can be obtained through the regional offices. Company registration is subject to renewal annually at GHC 15. Company registration includes issuance of a Tax Identification Number (included in the time required to obtain business registration certificates. In practice farmers and processors are eligible for five-10 year tax holidays. Once the farm has received their company registration certificates they may begin operations. Foreign companies must additionally register with the Ghana Investment Promotion Centre (GIPC).

7

0 Registrar General’s Department

5 Register with National Social Security Pension The farm must register with SSNIT for all permanent workers

1 0 Social Security and National Insurance Trust (SSNIT)

30

(casual workers are not covered under SSNIT). The business must provide business registration certificate and employee information, including: name, age, sex, next of kin, and salary. SSNIT registration is free.




Comments


Yes


Yes On Registrar General’s Department website. http://www.rgd.gov.gh/

9. Is registration possible in every state/province? No The Registrar General’s Department office is located in Accra. There are regional offices in Kumasi, Tamale, and Takoradi which serve as document transmission points to Accra.


Yes


No Fees and stated capital requirements are different for foreigners. Joint venture with Ghanaian participation: US $10,000. 100% foreign ownership: US $50,000. Company engaged in trading activities: US $300,000 regardless of whether the shares are wholly held by foreigners or not. Relevant Law: Ghana Investment Promotion Centre Act, 1994 (Act 478).

31


C. Time, cost, and procedures to obtain operational licenses for a seed supplier. Requirements may include import license, seed dealer license, license for storage facilities, national or local trading licenses, and inspections.

D. Time, cost, and procedures to register a new proprietary seed variety.



Type of Seed Hybrid Maize Location Accra Ownership Domestic, non-state-owned

enterprise


No. Procedure Time (days) Cost (US$) Agency 1 Obtain Seed Dealer’s License

Seed suppliers register with the Plant Protection and Regulatory Services Division (PPRSD) of the Ministry of Agriculture (MOFA) to obtain a Seed Dealer’s License. The license covers all commercial activities (import, export, production, cleaning, wholesale, and retail). The seed business completes and submits an application form to the nearest regional PPRSD office, along with their business registration certificate and registration fees, which vary based on the activity (GHC 500 for an importer and GHC 20 for a dealer engaging in distribution or retail sales of seed). Approval includes inspection (see Procedure 2 below). The Seed Dealer License is valid for a period of two years and may be renewed. Relevant law: Plants and Fertilizers Act, 2010 (Act 803)

45 263 Plant Protection and Regulatory Services Division of the Ministry of Agriculture (PPRSD-MOFA)

2 Inspection for Seed Dealer’s License Prior to issuance of a seed dealer’s license, PPRSD will inspect the business’ premises to confirm that storage facilities, packages and labels, and seed quality conform to the law. Standard seed testing procedures include: Sampling (GHC 5), Moisture Test (GHC 5), Purity Test (GHC 5), Number Count Test (GHC 5), Germination Test (GHC 5), Seed Health Test (GHC 15), Tetrazolium Chloride Test (GHC 15).

Simultaneous with previous procedure

27 PPRSD-MOFA


32

Procedures, Time, and Cost to Register a Proprietary Staple Grain Variety4

Step Details Time (days)

Cost (US$) Agency

Application The Ministry of Agriculture maintains an official list of seed varieties which are approved for sale in Ghana. Seed varieties must display distinctness, uniformity, and stability (DUS) and value for commercial use (VCU), requirements which are managed by public research organizations. The requirements and procedures for variety testing, release, and registration are prescribed in the Regulations, which have not yet been enacted. Most variety development is undertaken by the national agricultural research institutes and universities for maize and rice. A few private firms are beginning to develop and introduce new hybrid maize and sorghum varieties. There is no registration process for vegetable seed varieties. Most vegetables (e.g. cabbage, carrots, and lettuce) cannot produce seed under Ghanaian ecological conditions and must be imported. Relevant law: Plants and Fertilizer Act, 2010 (Act 803)

30 0 MOFA

Field Testing

Is the Distinctness, Uniformity, and Stability (DUS) test required?

Yes

Number of Seasons Minimum of 2 Number of Testing Locations Minimum of 5 Is the Value for Cultivation and Use (VCU) test required?

Yes

Number of Seasons Minimum of 2 Number of Testing Locations Minimum of 5 Can VCU test be undertaken simultaneously with the DUS test?

Yes

The Crops Research Institute (under the Council for Scientific and Industrial Research), Savanna Agricultural Research Institute (SARI), and university researchers are mandated to carry out field testing of potential new hybrids and open-pollinated varieties. Field trials occur in for a minimum of two seasons in five or more locations. Ghana has two growing seasons per year in the southern area of the country, and one growing season per year in northern Ghana, which allow for multiple growing seasons in the same year and the potential to complete field trials in one year. Respondents noted that in practice, field trials take on average two years to complete

730 days Roughly 7,614 per entry of field testing for private sector applicants.

National Agricultural Research Institutes (NARIs)

4 As of August 2013, the time, cost, and procedures associated with new variety registration in Ghana are not well defined. Prior to the new seed law (Plants and Fertilizer Act, 2010), variety development could only be undertaken by public-sector national agricultural research institutes (NARIs: Crops Research Institute and the Savannah Agricultural Research Institute). Recently, a limited number of recent private sector efforts to introduce new varieties have been arranged and funded, but in an ad hoc manner. The new seed law establishes a national Seed Register and multiple oversight committees to evaluate and approve applications for new seed varieties. Formalization of the procedures for variety registration and release are pending the enactment of new Regulations to accompany the Law. The Regulations have been drafted but are yet to be ratified by Parliament.

33

due to backlogs within the research institutes and a lack of coordination between the research institutes and MOFA. Cost assumes two seasons of field testing and includes transport and lodging costs for inspectors. Total cost for field testing depends on number of entries, seasons of field testing, and sites.

Technical Review

After the Crops Research Institute or SARI completes the DUS and VCU tests, test results and a report are submitted to the National Variety Release Technical Committee (NVRTC). The NVRTC conducts an additional season of field testing, during which they conduct on-farm evaluations. The breeder must maintain a demonstration plot during this period. Two official visits to the test plots are made by the Committee, at cobbing stage (for maize) and at harvest. A technical presentation on the varieties to be proposed for release is made on both occasions.

365 days 0 National Variety Release Technical Committee (NVRTC), Ministry of Agriculture

Approval and Official Release

The NVRTC meets to review the application and testing results and to approve the new seed variety. Respondents noted delays in approving a new seed variety due to difficulties in scheduling NVRTC meetings for the review and release of varieties. As a result, the total time to register a new seed variety can take three to four years and incur significant additional costs. Consistent follow-up is required to accomplish this procedure. The new Seed Law establishes a National Seed Council to develop procedures for seed variety registration and to set policies and fees for the inspection, sampling, and testing of seeds. However, respondents noted that the National Seed Council is not yet in force. The Council is to be comprised of representatives of the Ministry of Agriculture, national agricultural research institutes, university faculty, and seed and farmer representatives. There are no official costs to official release. In practice, the breeder covers the allowances to Committee members, which is dependent on the number present and their places of residence.

90 days 0 NVRTC

Listing in National Gazette

New approved seed varieties must be listed in the monthly national Gazette before sale can be made.

30 0 Ghana Gazette (Ghana Publishing Company Ltd.)

Total 5 steps 1,245 days

US $7,614



Yes

34


Yes

There is a faster process for varieties already introduced in the Economic Community of West African States (ECOWAS) region with similar ecologies.


- One season’s validation is the only requirement for seed materials introduced from within the ECOWAS region. To date, respondents noted that no new seed varieties have been introduced in Ghana through this facilitated process.

6. Is Ghana party to a regional agreement with respect to common procedures for variety testing, registration, and/or release that is effectively implemented in practice?

Yes There are harmonized procedures which were facilitated by the West and Central African Council for Agricultural Research and Development (CORAF/WECARD) and are now in place.

a. Is it implemented in practice? Yes

35


C. Time, cost, and procedures to obtain operational licenses for a fertilizer supplier. Requirements may include import license, fertilizer dealer license, licenses for storage facilities, environmental permit, national or local trading licenses, and inspections.

D. Index on the legal and institutional framework for the fertilizer sector.




Location Accra Ownership Domestic, non-state-owned

enterprise



Agency

1 Obtain Certificate of Registration as a Fertilizer Importer Companies engaged in import or manufacture of fertilizer in commercial quantities must register with the Plant Protection and Regulatory Services Division (PPRSD) in the Ministry of Agriculture (MOFA). All imported fertilizers must be listed in the Fertilizer Register maintained by MOFA. An application for a certificate of registration must include the applicant’s location and all wholesale distribution outlets, a description of the business premises, the firm’s business registration certificate, and payment of registration fees. Certificates are subject to renewal every two years. Relevant Law: Plants and Fertilizer Act (Act 803) Section 68

30 507 PPRSD, MOFA

2 Application for Licenses to Distribute and Retail Fertilizer Acquire, complete, and submit application forms. Application includes description of business premises, description of wholesale distribution or retail outlets, business registration certificate, and payment of fees. Fees are GHC 260 for a distribution license (per distribution outlet) and GHC 110 for a retail license (per retail outlet). A company can put in


188 PPRSD-MOFA

36



Comments

1. Is there a fertilizer law(s) and regulations? Yes Plants and Fertilizer Act (Act 803) Section 68. Regulations are forthcoming as of August 2013.


d. Set truth-in-labeling guidelines? (e.g. fertilizer bag labels must includes the Netherland’s official language(s), net weight or volume, “guaranteed analysis” of minimum levels of nutrients claimed, directions for use, and health and safety precautions)

Yes Fertilizer containers must include a label in English that includes the: type, grade, guaranteed analysis, net weight, sources of nutrients, and the name/address of registrant. Applicable Law: Plants & Fertilizer Act 2010 (Act 803)

e. Prohibit the sale of open, mislabeled, or adulterated bags of fertilizer?

Yes

Act 803 prohibits the distribution of adulterated, mislabeled, or short weight fertilizer and includes definitions of these terms.

f. Establish rules for the accreditation of third-party certification of fertilizer quality? (e.g. an accredited private laboratory network)

Yes There are roughly a half dozen accredited public and private laboratories that conduct fertilizer quality tests.


Yes PPRSD


a. Fertilizer production and storage facilities? Yes PPRSD inspectors have the authority to enter business premises without prior notice for the purpose of inspection, take samples, and issue fines, stop sale orders, or prosecute individuals or firms found to be in violation of the law.

applications to import, distribute, and retail at the same time and pay fees per distribution or retail outlet. Licenses subject to renewal every two years.

3 Inspections to Register and Obtain Licenses Before issuing licenses PPRSD will inspect the business and its premises to ensure the firm is operating in conformance to the law. When firms start operation, routine checks are conducted by inspectors to ensure that quality fertilizers are sold. Inspections includes checks of: • Guaranteed levels of nutrients in fertilizers • Product packages and labels • Handling and transport of fertilizer • Storage and warehousing PPRSD sampling and testing fee is GHC 10 per ton of fertilizer.


0 PPRSD-MOFA


37

b. Fertilizer at the point of sale (e.g. at retail shops)?

Yes See above.


Yes See above.

a. Do sampling and analysis methods follow international standards? (e.g. ISO standards or International Fertilizer Association guidelines)

Yes PPRSD testing is outsourced to other accredited labs in Ghana which follow international standards.

6. Is there a tiered licensing system for fertilizer suppliers that sets license and fee requirements in proportion to the activities and risks of business in each stage of the supply chain? (e.g. importers, distributors, and retailers)

Yes Separate licenses and fee structure for importers, distributors, and retailers.


Yes

The Government of Ghana funds a fertilizer subsidy program that operates through six large import companies. The government issues tenders to private companies to procure a set amount of fertilizer at a negotiated retail price. Import, distribution, and retail sales are then left up to the private sector. Open market sales are allowed.

38


D. Time, cost, and procedures to transfer farmland. Requirements may include cadastral survey, title and encumbrances search, valuation and inspection, government consent to transfer, stamp duty and transfer tax, and registration of deed of sale.

E. Index on access to property registration information.

F. Index on legal framework for leasing farmland, including customary land.


LLCs Farm size 10 hectares Purchase Price US$ 60,914 Location Eastern Region Land Tenure Long term leasehold in

stool or skin land



Agency

1 Cadastral site plan preparation and approval This procedure is necessary to assure the prospective buyer of the real owner of the property as confirmed by the State. A cadastral site plan is prepared by a licensed private surveyor engaged by the buyer and takes around three weeks. Surveyors typically charge fees of 2-3% of land value. The site plan is then taken to the Survey Department in the regional office of the Lands Commission and mapped against the master cadastral plan under the name of the tribe or other owner of customary land (assuming one exists). If there are any disputes regarding overlapping plans, they are identified at this time. The regional surveyor at the Land Commission must stamp and sign the site plan indicating approval. This step of the process takes about a week, and costs GHC 500 in total (which is included in the private surveyor’s charges). Regular, consistent follow-up is required to accomplish this procedure.

30 1,523 Survey Department in Lands Commission, licensed surveyors

2 Conduct search in deeds registry Lessee conducts search in the regional Deeds Registry. Fees are determined based on land size – GHC 18 is the official fee for one acre, with additional fees per acre, and express searches cost up to GHC 100. Although not definitive, the search allows lessee to determine if there are any existing records on the desired parcel of land in the registry.

30 51 Deeds Registry

39

3 Obtain consent and consent/concurrence for customary land For customary land, consent and consent/concurrence is required as part of the process of acknowledging the grant of a lease as valid for plotting in the State records. The family head (for family land) or chief (for skin or stool land) signs the lease agreement. Consent/concurrence is required from principal elders who serve as witnesses. Where chiefs or elders are not literate, an educated person such as a lawyer must be present to provide jurat, a certificate saying that the uneducated person understands and agrees with the document. A fingerprint signifies a signature.

1 0

4 Obtain oath of authorization The lease documents must be taken to the Commissioner for Oaths to obtain a court stamp, which can be done by the court registrar or judge.

1 15 Commissioner for Oaths at High Court

5 Submit lease documents for presentation and processing The lease documents, including the signed and stamped lease agreement and cadastral site plan, are submitted to the regional Lands Commission for presentation and processing. Internal processes at the Lands Commission include comparing the application against existing land records to check for conflicts, conducting a site inspection (see next procedure), and notifying the Office of the Administrator of Stool Lands of the application in the case of stool lands. An application fee is charged, though actual fees could be much higher than official fees reported. The total time required for Procedures 4 and 5 varies significantly and can take more than one year – respondents noted there is no reliable time frame. An average of 90 days assumes no litigation arises. Regular, consistent follow-up is required to accomplish this procedure.

90 254 Lands Commission

6 Site inspection and dispute settlement (if any) The Survey Department ensures that the physical site matches the description in the application documentation. Site inspection occurs regardless of if an area is titled or untitled and is more likely to occur if issues are perceived in the application. If there are no disputes, this process should take six weeks. If there is a dispute, this process could take multiple years.

Included in previous procedure

Included in previous procedure

Survey Department in Lands Commission

7 Obtain tax clearance certificate This certificate must be obtained to prove that the buyer owes no taxes. Obtaining the certificate takes 60 days, but can be undertaken simultaneously with Procedures 5 and 6.

Simultaneous with Procedures 5 and 6

1 Ghana Revenue Authority

40


Question Index

Score: 1

Comments


No Registration of title can only occur in registration districts located in the capital areas of regions.


No Registration must be done in person using physical documents.


No


No


Yes


No Foreigners are restricted in certain types of interest they can hold. A foreigner cannot hold a freehold interest in land or a lease exceeding 50 years. If a person who is not a Ghanaian buys a freehold interest in land it would be converted to a 50 year lease.


No Most land is not titled and hence not in the land title registry. The deeds registry is incomplete, with many deeds not formally registered.

8 Assessment and payment of stamp tax The nature and adequacy of the consideration (rent) would be reviewed to ensure compliance with law. Stamp tax is calculated based on the higher value of the amount of consideration or government rates regarding market land values. Where the amount of the value of consideration for the sale does not exceed GHC 10,000, stamp duty is 0.25%. Where the amount of the value of consideration exceeds GHC 10,000 but does not exceed GHC 50,000, stamp duty is 0.5%. Where the amount of the value of consideration exceeds GHC 50,000, stamp duty is 1%. (Stamp Duty Act, 2005 (Act 689)) A processing fee of GHC 55 is also charged.

11 637 Land Valuation Division in Lands Commission

9 Registration of deed Registration in the Deeds Registry is concluded after submission of a tax clearance certificate and payment of stamp duty. A number is allocated to the deed in the registry. An interest registered in the Deed Registry acts as notice against later parties, providing priority over competing interests.

10 0 Deeds Registry in Lands Commission

Total 9 procedures 173 days US $2,481

41

Leasing Rural Land Index (0-9) Responses Based on Customary Land

Question Index Score: 7.5

Comments


Yes


Yes


No However, stool lands require consent from the stool and concurrence from the Lands Commission.


50 99 years for residential and indigenous use. 50 years for all other uses and for foreigners even if residential (1992 Constitution).



No current statutory maximums.


No Zoning and land use planning by local governments may affect right to produce, but this is rarely a problem with agricultural land.


No Any restrictions are typically found in the lease itself.


Yes Through a sublease or assignment and with consent of the lessor.

a. Without lessor approval? No


No Registration provides a form of notice of the leaseholder’s interest to all other parties. But in general, the Deeds Registry system does not adequately protect long-term leaseholders’ interests.


Yes

b. Do such mortgages occur in practice? Yes Although financial institutions typically require additional collateral, such as buildings and equipment.

42


D. Types of agricultural collateral allowed by the legal and regulatory framework and accepted by financial institutions in practice.

E. Quality of existing collateral registries for movable collateral.

F. Strength of legal framework for warehouse receipts systems.

Strength of Legal Right Index (0-10) Index Score: 8

Types of Collateral

Allowed by Law

Used in Practice

Type of Charge

Is charge registered?

Comments

1. Farm equipment

Yes Yes Type of charge is at the option of the lender to select and describe in the filing. Can be fixed on a specific piece of equipment, or floating over all equipment or all movables.

Yes Very few restrictions on types of collateral allowed by law – can be any corporate asset and charges can broadly cover all assets, movable and immovable. Land, buildings, and equipment are the main forms of collateral.

2. Crop in field Yes No - -

3. Crop in warehouse

Yes Yes See Question 1 response.

Yes Grains may be registered with the Ghana Grains Council, which is piloting a warehouse receipts system.

4. Livestock Yes No - - In practice, some livestock may be accepted in support of government programs.

5. Inventory Yes Yes Floating charge

Yes More relevant to agro-chemical dealers than to farmers.

43



Comments

12. What type of registry exists for registering movable collateral? Please specify the name of the movable collateral registry(ies).

Multiple Registries

Registrar General (for companies) and Collateral Registry (for all movables and immovables of companies and individuals). There is a lack of clarity regarding how the collateral registry interacts with Registrar General and the Land Title Registry. By law, companies have to register all charges in Companies Registry. Mortgages and security interests in land registered in Land Title Registry. Banks also file charges in the Collateral Registry, so the same charge may be filed in multiple registries.


Yes A charge can cover any corporate asset. Registration of a charge in the Companies Registry is required of companies under the Companies Code 1963, Act 179. Registration appears to also be required in the Collateral Registry, though the law is not entirely clear.


Yes Charges against sole proprietors and individuals can be registered in the Collateral Registry, but not with the Registrar General.


Yes


Yes The Collateral Registry is electronic. The Registrar General and other registries are paper based, and documents are only located in Accra.


No Online searches can be performed in the Collateral Registry, but not the Companies Registry.

18. Is data from the movable collateral registry Yes But not as reliable as it could be. Double registrations


No No - -

7. Futures contract

No No - - Ghana Cocoa Board (COCOBOD) sometimes undertakes this form of contract, but otherwise banks consider this type of collateral too risky.

8. Accounts receivable

Yes Yes See Question 1 response.

Yes More applicable for cocoa.


Yes No - No These are usually ‘loose agreements’ that are not intended to be legally enforceable.


Yes Yes Mortgage Yes Land must be officially registered in the title or deeds registry. Land, buildings, and equipment are the main forms of collateral.

44

reliable? can occur, and quality depends on if consistent descriptions are used in filings of charges, which is not always the case.

19. Is real-time information from the movable collateral registry widely accessible to the general public without any restrictions, including by those located in commercial centers outside of the capital?

Yes Collateral Registry data is real time and accessible. Presently, real-time information is not easy to come by for the Companies Registry, particularly outside of Accra.


Yes Registration in the Collateral Registry is real-time, and the fee for registration is GHC 7 (US $3.5). It may take around five working days at the Registrar General (filing takes a day while receipt of certificate of registration of charge takes longer). Registration of a charge in the Registrar General is GHC 30.

21. Can a search of the movable collateral registry be performed within a reasonably rapid time frame and with flat, reasonable fees (i.e. free or less than US $5)?

Yes Some fees are flat while other fees (such as stamping) are a percentage of the transaction amount. Searches in the Collateral Registry are GHC 5.


No Registration within a registry is based on order of filing, but it is unclear which registry has priority over the other(s) in case of conflicts.



Comments


No Appropriate laws are in the formulation stage. The Ghana Grains Council has recently started operating a warehouse receipts system for its members using a self-regulatory system, with five certified warehouses and receipts issued for 29,418 MT of maize as of August 2013.







45
















46


E. Time, cost, and documents to export a widely-traded agricultural commodity.

F. Index on legal framework for phytosanitary certificates for export.

G. Time, cost, and documents to import hybrid seed.

H. Index on trade facilitation measures.

Product Cashew, Shea Nut Export Consignment


Value US $20,000 Point of Exit Tema Port Product Hybrid Maize Seed Import Consignment


Value US $20,000 Point of Entry Tema Port Company Private LLC, majority





Time (days)

Cost (US)


12 $500


4 $230

TOTAL 16 days

$730

Documents to Export Commodity Customs Export Declaration Form

COCOBOD Quality Assurance Certificate (for Shea nut. Not required for cashew) Certificate of Origin (EUR1 or GSP Form)

Packing List

Invoice

Phytosanitary Certificate Bill of Landing

TOTAL: 7 documents

47

Importing Hybrid Seed

Procedures to Import Hybrid Seed

Time (days)

Cost (US)


15 $580


12 $258

TOTAL 27 days

$838

Documents to Import Hybrid Seed Original Bill of landing

Invoice

Packing List

Phytosanitary Certificate Import Permit

Final Classification and Valuation Report (FCVR)

Provide Tax Identification Number and Tax Clearance Certificate Import Declaration Form (IDF)

TOTAL: 8 documents

48

Trade Facilitation Index (0-5)5

5 This index was used in Ghana, the Netherlands, and Thailand and subsequently refined. The questions and scores therefore differ slightly from the remaining AGRI Index countries. For more information on revisions to the index, see “Appendix: Methodology” in the 2014 AGRI Index report.


Comments

1. Is pre-shipment document submission available? No Pre-shipment inspection is not available in Ghana. The Destination Inspection Scheme is in place.

2. Do customs and other agencies utilize risk management techniques and audit-based controls to reduce the frequency of cargo inspections?

Yes With the audit based control. Importers are awarded the Gold Card which entitles them to speedy clearance at the ports, since they have proven over-time that they comply with all the customs procedures. Customs builds up the historical records of frequent importers over a year before they are awarded the gold card. The holders are randomly checked for continued compliance.

3. If goods must be inspected by customs as well as by other agencies, do customs ensure that the inspections are coordinated and, if possible, carried out at the same time?

Yes Customs Division, National Security, and Narcotics Control Board (NACOB) carry out the inspections in a coordinated manner.

4. Are consignments of imported seed allowed to enter the Netherlands (but remain in storage) while samples undergo laboratory analysis?

Yes Consignments may enter but must await a report from PPRSD confirming positive germination results (avg. four days) before sale can commence.

5. Is timely and accurate trade and customs information made publicly available?

No

49

Phytosanitary Index (0-8)6



Comments

1. Does the National Plant Protection Organization (NPPO) follow international guidelines (ISPM 7 and 12) on the issuance of phytosanitary certificates and requirements for phytosanitary management?

Yes The NPPO of Ghana is referred to as the Plant Protection and Regulatory Services Department (PPRSD). PPRSD is regulated by the Plants and Fertilizer Act, 2010 (Act 803). Ghana is a member of the International Plant Protection Convention (IPPC) and is bound IPPC regulations.

2. Does the NPPO make information on the requirements to apply for a phytosanitary certificate easily accessible to exporters?

Yes This information is available at any PPRSD office.

3.Does the NPPO provide information to all relevant stakeholders on: importing country phytosanitary requirements; pest status and distribution; and operational procedures (e.g. inspection and sampling methods)?

No

4. Can a phytosanitary certificate be obtained in a reasonably rapid timeframe and with reasonable fees?

Yes

5. Are all fee schedules (for sample collection, testing, certificate, administrative) publicly available?

Yes Not easily accessible. Fees are only listed in the Fees and Charges document (Amendment Instrument 2012 (LI 2191), which is updated annually and can be purchased (for a fee) at the Ghana Publishing Company in Accra.

6. Do phytosanitary inspectors have sufficient knowledge to issue phytosanitary certificates that meet importing country requirements?

Yes Phytosanitary inspectors obtain service training. They also follow the importing country’s requirements strictly. For example, the Hand Book of the Plant Health Legislation of the European Community is followed strictly by the phytosanitary inspectors.

7. Does the NPPO notify exporters of the reason(s) for rejecting an application or refusing to issue a phytosanitary certificate?

Yes This is done verbally. However, contentious ones may be done by a written communication.

8. Does the NPPO enter into mutual equivalence agreements with main trade partners when phytosanitary measures are demonstrated to achieve an equivalent level of protection?

No

50


D. Index on legal framework for contract farming. E. Index on system for establishing public grades

and standards for a widely-traded staple crop. F. Index on access to expedited or alternative



Question Index

Score: 7 Comments


Yes Outgrower farms often lack capacity with respect to formal contracting.


No Except the Ghana Cocoa Board (COCOBOD) may need to be involved for cocoa.


Yes Except in the case of the cocoa, where COCOBOD sets buying price.


Yes In common law.

12. Does the legal framework recognize the right of recovery of damages in the case of breach of contract and equitable remedies such as specific performance and injunctions?

Yes In Contracts Act (Act 25), Courts Act (Act 459), and common law.


Yes Based on level of proof.


Yes Judge can decide this is necessary for perishable goods. Falls under rules of preservation of rules of court.

51

Grades and Standards Index (0-9)7


Comments


Yes The Ghana Standards Authority has been established for this purpose, though its effectiveness is questionable and grades and standards are currently voluntary.

13. Are standards based on product requirements in terms of performance rather than design or descriptive characteristics, where appropriate?

No Descriptive characteristics are used. Standards for important crops are currently being upgraded to more detailed regulation.

14. Are there grades segmenting the most widely traded staple crop in Ghana that are based on quantifiable attributes (e.g. weight, size, shape, density, firmness, color, taste, odor, maturity, blemishes, moisture content)?

Yes

15. Are public standards consistent with good scientific practices and with guidelines issued by international standards-setting bodies (e.g. Codex Alimentarius, ISO)?

Yes Though not all public standards are elaborate enough. For example, current standards for maize only have three grades, but are in the process of expanding to five grades.

16. Is there a transparent and inclusive participatory process in setting public grades and standards that work fairly for all market participants?

No Not enough transparency, though the Ghana Standards Authority does have committees with members from other agencies, research institutions, and producer associations.

17. Is there a dedicated, competent regulatory body in charge of grades and standards, or coordinated efforts where multiple agencies are involved?

Yes Though Ghana Standards Authority lacks capacity to fully develop and manage public grades and standards.

18. Are there sufficient guidelines and regulations issued with respect to grades and standards, and are these guidelines and regulations made accessible to all market participants?

No More detailed regulations are being worked on.

19. Are grades and standards effectively monitored and enforced through adequate procedures and infrastructure (e.g. public laboratories for testing, accreditation procedures for private laboratories, expeditious and impartial inspections)?

No Capacity is currently limited.

20. Does the government implement a weights and standards system to ensure uniformity of measurement across all food and agriculture-related commerce?

Yes


52



Comments


Yes Commercial courts exist in regional capitals, though they are overloaded and not expedited. District courts exist as well.


No ADR Act 798 has been enacted. However, there are few trained arbitrators and mediators in the country, particularly outside of commercial centers, and an overall lack of awareness regarding ADR.


Yes Normally considered if it is part of the issues for ADR.


Yes Cost normally reflects the total amount in dispute and is not prohibitive.


No


No

5.a. If YES, does this threshold amount pose a barrier to claims brought by small or medium-

sized agribusinesses?

-


No Commercial courts and arbitration can take just as long or longer. District courts and mediation are faster. Rules and procedures in district courts are less formal and sometimes unclear.

25. Are expedited or alternative mechanisms readily available outside of Accra?

No Not readily available, although customary arbitration and facilitated mediation is employed in rural settings.


Yes ADR Act 798 is based on the New York Convention of 1958.

53


E. Time, cost, and procedures for business registration and licensing of a mid-sized staple grain farm. Requirements may include national or local trading licenses, chemical storage requirements, workplace or employee registration, environmental permits, and company registration.

F. Index on access to business registration information.

Case Study Farm Crop Maize Farm size 50 hectares Location Rift Valley Legal Form Sole Proprietorship Land tenure 50 year lease Market Farm gate, local market

Kenya

Procedures, Time, and Cost to Start-up a Farm


Cost (US$)8 Agency

1.

Name Search KES 100 per name. The applicable law is the Business Names Act (Cap 499). Business names are referred to as sole proprietorships. A business name is a trading name which differs from the names of the persons or the company who own the business. Registration of a business does not result in the creation of an entity with separate legal personality from its proprietors. The proposed name must be reserved pending registration. The application for name reservation should be made in writing and accompanied with the prescribed fees. It is advisable to have at least two (2) proposed names.

3 2 Companies Registry-

State Law Office

2.

Business Registration and Issuance of a Business Registration Certificate Once the name has been approved and reserved, the applicant should complete the statement of particulars (form BN2). The particulars to be provided in this form include the approved name, nature of business, address of principal place of business, postal address, particulars of the proprietors/ partners which include full names, nationality and citizenship, nationality of origin, age, sex, usual place of residence and other business occupation.

7 10 Companies Registry - State Law Office

8 Exchange rates as of June 2012 (KES 82.45 per USD). Costs are rounded to the nearest dollar.

54

After filling the form BN2, the applicant or his advocate should take the form together with the registration fee of Shs. 800 to the Companies Registry then lodge the form for registration. The applicant will be issued with a business registration certificate (Form BN 3) after approximately seven days.

3.

Registration for Personal Identification Number/VAT The applicable laws are the Value Added Tax Act (Cap 476) and the Income Tax Act (Cap 470). A business cannot be issued with a PIN number for tax purposes as it is not a legal entity. For purposes of trading, the PIN to be used is that of the owner (proprietor) as he is personally liable for the liabilities of the business. However, the proprietor is required to register for VAT if his expected turnover is more than Shs. 3 million (compulsory registration). The proprietor may still register for VAT even if the business does not meet the threshold so long as he will be making supplies and purchases.

1 0 Kenya Revenue Authority (KRA)

4.

Registration for National Social Security Fund (NSSF) The relevant law is the National Social Security Fund (Cap 258). NSSF provides employees with retirement benefits. Participation of all employees through their employers is mandatory. The employer pays a standard contribution of about 1% of the employee’s salary subject to a maximum of Shs. 400 per month. Half the contribution is deductible from the employee’s salary. This is only applicable to permanent employees and not casuals.

1 0 National Social

Security Fund (NSSF)

5.

Registration for National Hospital Insurance Fund (NHIF) The applicable law is the National Hospital Insurance Fund Act, 1998. The employee contributes a fixed sum to the NHIF which must be deducted by the employer from the employee’s salary. The maximum contribution is Shs. 320 per month. Applicable to permanent employees and not those employed on a casual basis.

1 0 National Social


6.

Registration for Pay As You Earn (PAYE) Every employer is required to deduct income tax (PAYE) from his employees' salaries and remit it to KRA. Registration is mandatory.

1 0 Kenya Revenue Authority (KRA)

7.

Obtain Single Business Permit Annual renewal, KES 200 fee, but fee varies by type, size, and location of business. http://www.businesslicense.or.ke/index.php/news/article/id/7

1 2 Local/City Council

55

8.

Environmental Impact Assessment (EIA) EIA ensures that decisions on proposed projects and activities are environmental. Inspection involved, would occur for new crops, new seeds, infrastructure improvements. Not likely it will occur for many farms.

60 .1% of project

cost NEMA

9.

Registration of Premises for Storage of Pest Control Products No person shall use any premises, or being the owner or occupier thereof permit or allow the premises to be used, for the purpose of manufacturing, formulating, packaging, selling or storing pest control products unless that person is in possession of a license issued under the Regulations of the Pest Control Products Act in respect of those premises.

21 61 Pest Control Board

10.

Water Extraction License Water extraction license is required for tapping a reservoir or using a borehole. Ministry of Water inspects and issues a permit for a set volume, you pay by amount extracted.

1 Pay by volume Ministry of Water

11. Application for Workplace Permit 1 33

Directorate of Health &

Safety (Ministry of Labor)

12.

Pay Training Fee for Employees Employers must pay 50 KES per year per employee for training, this applies for all businesses

1 6 Directorate of

Industrial Training

13. Inspection for Change of Land Use Inspection of premises.

Included in following procedure

0

Physical Planning Department,

Municipal/County Council

14.

Change of Land Use – Agricultural Zoning Apply to local authority under Physical Planning Act (1996), decision is made within 30 days of receipt of application through a Notification of Approval. No exact formula of registration – just go to the Physical Planning Office (district level) to see if the land had been used for another use, zone it for agriculture. Takes about 30 days and the costs differ based on location and physical access, exact cost uncertain but around 150 Shs per acre. Plus transportation cost and fee to hire professional surveyor.

30 225

Physical Planning Department,

Municipal/County Council


56


Question Index Score:

3 Comments

12. Are registration documentation and information on fees publicly available? Yes

These forms are available at the Companies Registry at Sheria House, Nairobi. Information on the fees is also available at the registry and is also indicated on the forms.

13. Are registration documentation and information on fees available online? Yes

Downloadable forms are available on the State Law Office Website (www.attorney-general.go.ke). The fees that are payable are set out in the Registration of Business Names Rules made under section 22 of the Registration of Business Names Act (Cap 499). This Act and the rules are available and can be accessed by the public on www.kenyalaw.org.

14. Is registration possible in every state/province? No National level. Central registry in Nairobi. 15. Are registration steps the same regardless of

business size (measured by size of workforce or revenue)?

Yes

16. Are registration steps the same regardless of the nationality of ownership? No

Private companies that intend to purchase agricultural property in Kenya cannot have foreign shareholders at all.

57


E. Time, cost, and procedures to obtain operational licenses for a seed supplier. Requirements may include import license, seed dealer license, license for storage facilities, national or local trading licenses, and inspections.

F. Time, cost, and procedures to register a new proprietary seed variety.



Type of Seed Hybrid Maize Location Nairobi Ownership Domestic, non-state-owned

enterprise


No. Procedure Time (days) Cost (US$) Agency

1.

Registration as Seed Merchant The company must be a registered company with the registrar of companies and have at least seventy-five per cent of their business in either processing, production or marketing. This also applies to individuals wishing to register as a seed merchant. One has to be familiar with the Seeds and Plant Varieties Act (Cap. 326), this clearly indicates rules and regulations pertaining to seed trade, and is required to fill in FORM SR 3 detailing the areas the company wants to be registered for - production, processing, or marketing (NOT import). Cost is KES 75,000 for the application and 10,000 annual fees. If all application materials are in place, process takes an average of one month (1st week review of application, 2nd week inspection, 3rd week finalize & issue license), but often takes 2 months.

40 910

Kenya Plant Health

Inspectorate Services (KEPHIS)

2.

Inspection for Seed Merchant License An annual inspection of the premises, storage and handling, staff, and competence. Merchant pays for the inspection and is charged for mileage driven by inspector. This procedure is simultaneous with Procedure 1. A seed seller would also require an inspection to certify, with the same cost for mileage.

One Week, Simultaneous with Previous

Procedure

0.35 KES per km

- 1 used

National Seed Quality

Control Service, KEPHIS

58

3.

Recommendation to Act as Seed Sub-agent or Stockist A prospective seed stockist or sub-agent must be appointed by a registered seed merchant and obtain approval from the District Agricultural Committee before applying for a Seed Sellers License from KEPHIS. See following procedure.

1 0 District

Agricultural Committee

4.

Registration as Seed Seller The Seed Act (Cap. 26) states that each seed merchant must appoint a seed agent, subagent, and stockist to sell seed. In practice, wholesalers may choose to do retail sales or work through an agent. The gazetted cost for agent registration is KES 120,000 plus 30,000 annual renewal fee, Sub-agent KES 5,000/3,000, and stockist KES 150/50. However, contributors noted that this is not the cost in practice - the fees for a seed sellers' license are far less than a seed merchant license. Each appointee must apply for a seed sellers' license through form SR 12, list the species to be sold and the storage facilities. To get a seed sellers’ license, must be recommended by both seed merchant and District Agricultural Committee within the specific region, controls imposed to prevent sale of fake seed. After inspection, KEPHIS issues form SR-13, a seed sellers’ license, which mandates the proper care and storage and germination levels of seed sold at the particular premises. Seed sellers’ license takes 1-2 weeks to obtain and is valid for one year. http://www.wipo.int/wipolex/en/text.jsp?file_id=128403#LinkTarget_10855

1-2 weeks 12 KEPHIS

5.

Inspection for Seed Sellers’ License Regional KEPHIS inspectors confirm that the premises and storage facilities are adequate and clean. The cost for mileage is the same as for a seed merchant.

One week, simultaneous with previous

procedure

1 Regional KEPHIS office

6.

Obtain Single Business Permit Annual renewal, KES 200 fee. http://www.businesslicense.or.ke/index.php/news/article/id/7

1

2 but varies by type, size, location of business

Local/City Council


59


No. Procedure Time (days) Cost (USD) Agency

1.

Application to Release a Variety KEPHIS service charter states that entries into the National Performance Trials (NPT) and Distinctness, Uniformity and Stability (DUS) Tests will be receipted not more than two weeks after submission.

14 0

Kenya Plant Health

Inspectorate Services (KEPHIS)

2.

Registration for National Performance Trials Applications are coordinated from Nairobi and mandated under the Seeds and Plant Varieties Act Cap 326. The seed and plant varieties (NPT Regulations, 2009) NPT testing requires a mandatory two seasons which generally means two years, although in theory it could be done in one year if irrigated or if the trials coincide with the proper seasons. NPT for maize seed varieties is divided into ecological zone or seed kits: mid altitude kit, highland kit, coast kit, etc., totaling seven kits. The seed must go through a separate NPT kit if it is to be released across multiple ecological zones.

720 1,000 KEPHIS

3.

Distinctness, Uniformity, and Stability Tests (DUS) Applications are coordinated from Nairobi. Only varieties that are new or have not been previously registered in other countries undergo DUS testing. A variety approved elsewhere would only do NPT, and KEPHIS would purchase the DUS results from such a government on behalf of the seed company. Procedure 3 is recommended to be simultaneous with Procedure 2 to hasten variety release. Without DUS even with excellent NPT data = NO RELEASE. Tanzania and three East African countries trying to harmonize procedures, which are slightly differently.

0 600 KEPHIS

4.

Recommendation for Release The National Performance Trials Committee (NPTC) as per Cap 326 guided by KEPHIS evaluates new seed varieties and issues a recommendation for release. The recommendations would then be evaluated by the National Variety Release Committee (NVRC), chaired by the Ministry of Agriculture, KEPHIS secretariat. NVRC meets at least once a year. NVRC issues the release of the new variety which must be gazetted with 14 days from that meeting. The process takes about two months from crop harvest to release and the variety is finally cleared for commercial production. All maize seed varieties sold in Kenya must still be certified by the National Seed Quality Control Service (KEPHIS) which involves field tests, sampling for varietal purity, multiple inspections in the field and testing germination percentages.

60 240 KEPHIS,

Ministry of Agriculture

Total 4 procedures 794 days US$1,840

60





N/A

a. If YES, with which country(s) and what is the facilitated process? N/A

9. Is Kenya party to a regional agreement with respect to common procedures for variety testing, registration, and/or release that is effectively implemented in practice?

N/A


61


E. Time, cost, and procedures to obtain operational licenses for a fertilizer supplier. Requirements may include import license, fertilizer dealer license, licenses for storage facilities, environmental permit, national or local trading licenses, and inspections.

F. Index on the legal and institutional framework for the fertilizer sector.




Location Nairobi Ownership Domestic, non-state-owned

enterprise

Licenses and Permissions for Fertilizer Provider N/A – No Data


Question Index Score: Comments

1. Is there a fertilizer law(s) and regulations? Yes Fertilizer and Animal Foodstuff Act (Cap 345) and Rules.


g. Set truth-in-labeling guidelines? (e.g. fertilizer bag labels must include the Netherland’s official language(s), net weight or volume, “guaranteed analysis” of minimum levels of nutrients claimed, directions for use, and health and safety precautions)

Yes Rule 3 of the Fertilizers and Animal Foodstuffs (Packing of Approved Fertilizers) Rules, 1972.

h. Prohibit the sale of open, mislabeled, or adulterated bags of fertilizer?

Yes

Mislabeled, misleading, or fraudulent fertilizer may not be sold. Open bags of fertilizer may be sold only if “the fertilizer sold is taken out in the presence of and with the knowledge of the purchaser from a container which is branded or indelibly marked or has a securely fixed label showing the particulars required under rule 3 of these Rules and transferred to an empty container or package.” Rule 3 of the Fertilizers and Animal Foodstuffs (Packing of

62

Approved Fertilizers) Rules, 1972.

i. Establish rules for the accreditation of third-party certification of fertilizer quality? (e.g. an accredited private laboratory network)

No


Yes Ministry of Agriculture – Agribusiness and Market Development Department, and the Kenya Bureau of Standards.


a. Fertilizer production and storage facilities? Yes Same as above. b. Fertilizer at the point of sale (e.g. at retail shops)? Yes


Yes Same as above.

a. Do sampling and analysis methods follow international standards (e.g. ISO standards or International Fertilizer Association guidelines)

-


No


Yes

Government imports subsidized fertilizer through the National Cereals and produce Board (NCPB).

63


G. Time, cost, and procedures to transfer farmland. Requirements may include cadastral survey, title and encumbrances search, valuation and inspection, government consent to transfer, stamp duty and transfer tax, and registration of deed of sale.

H. Index on access to property registration information.

I. Index on legal framework for leasing farmland, including customary land.


LLCs Farm size 50 hectares Purchase Price US$ 44,838 Location Rift Valley Land Tenure Titled land

Procedures, Time, and Cost Transfer Rural Land


1.

Request an Official Investigation of Title The investigation of title is a process aimed at determining whether the buyer is going to ultimately acquire a good marketable title/interest in the property. It is the buyer's advocate's obligation to investigate title. It involves the conducting of searches, pre-contract enquiries and requisitions. The official title search is conducted by a Ministry of Lands official, and involves the purposeful inspection of the register or title records at the relevant registry. These act as a shield to fraud. They are conducted to ascertain ownership of the interest as well as planning, environmental, encumbrances and other matters that may affect ownership which ought to be noted in the register kept by the land and titles registries. The results of an official search are guaranteed by the registries and the government as accurate. Since the land is registered under the Registration of Titles Act (Cap. 281), there are only two registries, one in Mombasa and the other in Nairobi. The search will therefore be conducted in Nairobi, in view of the fact that the land is in the Rift Valley. The buyer may choose to undertake additional searches for other charges that may affect the sale. Chattels transfers, debentures, and other registered charges are found in the Companies Registry at the State Law Office. The buyer may also conduct a search at the High Court of Kenya for bankruptcy proceedings.

14 6 Government Land/

Titles Registry

64

2.

Obtain Consent to Transfer It is the obligation of the vendor to obtain the necessary consents to the transfer. This being agricultural land, it will be necessary to seek the consent of the Land Control Board under the Land Control Act (Cap. 302). The vendor is also required to obtain a rent clearance certificate from the Commissioner of Lands for a leasehold title.

1 0 Land Control Board

3.

Lodge Transfer Instrument at Lands Registry The transfer instrument is lodged at the Lands Registry for stamp duty assessment, pending inspection by a government valuer.

1 0 Government Land/

Titles Registry, Ministry of Land

4.

Valuation and Site Inspection by Government Valuer and Provision of Valuation Report The government valuer visits the property to assess its worth taking into account the developments on the property and the state of the property among other considerations. Once the valuer has assessed the property's value he compiles a valuation report after which the value of the property is endorsed on the transfer instrument and then it is submitted for stamp duty assessment.

30 0 Government Land/ Titles Registry

5.

Assessment of Stamp Duty Stamp duty payable on a transfer of land not situated within a municipality as in this hypothetical scenario is calculated at 2 percent of the value assessed by the government valuer. Stamp duty for transfer of property within a municipality is calculated at 4 percent of the assessed value. The stamp duty form (SD1) is then completed in quadruplet. The land officer at the registry will then assess the stamp duty payable and indicate the amount on the forms.

1 0

Government Land/ Titles Registry

6.

Payment of Stamp Duty and Confirmation of Payment by Kenya Revenue Authority (KRA) After stamp duty has been assessed, payment will be made at any of the commercial banks designated by the KRA which is charged with the duty of collecting stamp duty. If the amount of the stamp duty is assessed at an amount that exceeds KES 1 million, payment by RTGS bank transfer. The KRA will confirm receipt of payment after three days after which the transfer can be lodged for franking as evidence of payment of stamp duty.

4

898 (bank

charges) + 2% of

Property Value (stamp

duty)

Government Land/ Titles Registry

65



3 Comments

1. Is real property registration possible in every state/province? No

If the land is registered under the Registered Land Act (Cap. 300), it is possible to register property in every district. However, for land registered under the Government Lands Act, Registration of Titles Act, there are two registries only in the whole country, one in Nairobi and the other in Mombasa.

2. Can real property registration be accomplished via an automated, online process? No

3. Is information and documentation about the process of real property registration available on the Internet? No

4. Are real property registration steps and timeframes clear? Yes

5. Are real property registration steps the same regardless of property size? Yes

6. Are real property registration steps the same regardless of the nationality of ownership? Yes

7. Is quality of data in the land registry reliable, with few cases of dual or fake titles? N/A Data for this question was not collected for this

country. Leasing Rural Land Index (0-9) Responses are based on titled land. Currently, the Kenya land laws provide that Community Land shall be managed in accordance with the law relating to community land as shall be enacted. A “Community Land Bill” is pending and is yet to be passed into law. As such, respondents were unable to provide input on community land until the new legislation is in place.


Comments


Yes

Formal domestically-owned entities have a legal right to lease land subject to such statutory requirements that are stipulated in the laws governing the incorporation of the entities.

28. Do formal entities have a de facto right to lease land? Yes Formal entities have a right to lease land subject to

the provisions of the Land Control Act (Cap 302).

7.

Registration of Transfer Documents and Issuance of New Title Document or Transfer of Title Document Once the transfer instrument has been stamped, it will be lodged for registration at the relevant registry. The transfer instrument must be accompanied by the original title document. The Registrar will then issue a new title in the name of the buyer in the case of land registered under the Registered Lands Act.

14 6 Government Land/ Titles Registry


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This Act provides that foreign-owned entities cannot lease agricultural land.


Yes

If the Lease is for agricultural land, then Land Control Board consent is required. If the lease is long term for non-agricultural land, consent from the National Land Commission is required, or as stated in the title.



There is no maximum duration for leasing land except for non-citizens and foreign-owned companies, which may lease land for a maximum of 99 years. In all cases the period of a lease must be less than the term of its parent lease.



There is no maximum acreage that an entity can lease.


Yes

The land can only be used as stipulated under the main title. If the user is agricultural, then the leaseholder may undertake agricultural activities/ production subject to compliance with National Environment Management Authority (NEMA) regulations.


Yes

The main title may restrict further subdivision or require certain approvals/consent to be obtained prior to any subdivisions. The Physical Planning Act (Cap 286) also provides guidelines on subdivision. For subleasing, any sublease for a period more than 6 years has to be registered. Long term leases will also require consent from head lessor and requisite government rent and rates to be paid before registration of a lease.

34. Can a long-term (50+ years) leasehold interest in land be transferred to another formal entity? Yes A transfer or assignment of lease instrument in favor

of the new entity has to be registered.

a. Without lessor approval? Yes

Some titles require the head lessor’s consent/approval for a transfer to another entity. Usually this is the case. Consent should not be unreasonably withheld.


Yes The Lease must be registered against the title for the protection of the leaseholder’s interest.


Yes

Provided the lease contains a provision permitting the leaseholder to obtain a charge based on the lease. (Mortgages no longer feature under the new Land Laws, the Land Act 2012 and the Land Registration Act 2012, and instead, only charges are recognized.)

c. Do such mortgages occur in practice? Yes Normal practice.

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G. Types of agricultural collateral allowed by the legal and regulatory framework and accepted by financial institutions in practice.

H. Quality of existing collateral registries for movable collateral.

I. Strength of legal framework for warehouse receipts systems.

Strength of Legal Right Index (0-10), Index Score: 8

Types of Collateral Allowed by Law Comments

1. Farm equipment Yes

The Chattels Transfer Act (Cap. 28). Under this Act, a chattel is defined under section 2 to include farm equipment. However, for farm equipment to qualify as a chattel it must be completely transferable i.e., it must not be permanently fixed on the ground. Floating charge or debenture on movable assets as additional security to the land title deed.

2. Crop in field Yes It is possible to take a chattels mortgage over crops, with crop insurance cover, assigned to the bank. In practice rarely done.

3. Crop in warehouse No Unclear if laid out in laws/regulations. Not done in practice. Warehouse Receipts System bill in Parliament.

4. Livestock Yes

The schedule of livestock secured should contain description of stock by some brand or brands, earmark or earmarks, or other mark or marks upon them or shall be so described or referred to by sex, age, name, color or other mode of description as to be reasonably capable of identification.

5. Inventory Yes Falls under chattels mortgage but not done in practice.

6. Patented plant variety Yes

Falls under chattels mortgage but not done in practice. Whilst you could take security over the crops, you cannot take security over intellectual property as this is not moveable property that can be completely transferred by delivery.

7. Futures contract No Kenyan law is silent on this and there is no existing mechanism to establish futures contracts. Kenya’s law on futures trading is undeveloped.

8. Accounts receivable Yes Under English common law, which is applicable in Kenya, debts can be used as collateral for loan.

9. Buy/sell agreements Yes

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Comments

23. What type of registry exists for registering movable collateral? Please specify the name of the movable collateral registry(s).

Multiple registries

• Chattels Registry (for registration of security interests of chattels such as crops, machinery and stock) • Ships registry • Civil Aircraft Register (for the registration of civil aircraft) • Motor Vehicle Registry • Registry of Industrial Property (for the registration of intellectual property rights).


Yes

The Chattels Registry is the registry most commonly used to register security over movables in Kenya. Security rights over chattels under the Chattels Transfer Act (Chapter 28, Laws of Kenya) can be registered in the Chattels Registry. Chattels are defined as any movable property that can be completely transferred by delivery, and includes machinery, stock, crops, and wool.


Yes

Security rights over movables for all types of debtors, including sole proprietors, can be registered in the Chattels Registry. It should however be noted that the Companies Act (Chapter 486, Laws of Kenya) contains provisions requiring securities created by companies including over movables be registered at the Companies Registry, and in this regard securities created by companies over movables are generally registered at the Companies Registry, rather than at the Chattels Registry.


Yes

There is only one registry situated in Nairobi which is the central database. All instruments creating security over movable assets are registered in one register notwithstanding the exact nature of the security.


No The index kept by the Registrar is manual.

28. Can registration and searching in the movable collateral registry be performed online? No One has to personally visit the Chattels Registry to

make registrations and/or to perform searches.

10. Land and water rights Yes

Under Kenyan law, land can be used as collateral to obtain loan in a bank if the land has no legal encumbrances and is mortgage chartered (this is through the concept of charge or mortgage in conveyancing law). If the land belongs to a third party, a guarantee and indemnity for the amount borrowed is further drawn and the title documents are deposited with the lender. Water rights can as well be used as collateral for bank loan because under real property law, water rights can create proprietary right which by extension can be used to secure a bank loan.

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29. Is data from the movable collateral registry reliable? No

Respondents noted that it can be difficult to find information at the Chattels Mortgages Registry because the records are manual and not well kept. Respondents also noted that the data is unreliable due to issues with recordkeeping (whether records have been properly filed, maintained, kept up-to-date, and whether all relevant registrations are made by the parties involved).


No Information is not available in real time. Rather, all the records are manual and physical inspections need to be carried out.


Yes Registration costs a nominal fee of KES 5. If all the documentation is in order registration can be performed within 5-10 working days.


Yes Searches can also be done within a period of 10 working days. A nominal fee (KES 5) is payable to conduct a search.

33. Does the secured lending system provide for priority based on order of filing? Yes

The Chattels Transfer Act provides that all persons shall be deemed to have notice of an instrument which has been registered. However, in practice it is difficult to ascertain prior registration unless one is in possession of the documents whose time of registration is being queried. Furthermore, registrations are only date stamped and not time stamped so it is impossible to tell hierarchy in same day registration.



29. Are there any laws or regulations pertaining to warehouse receipts systems currently in force? No

Currently there is no warehouse receipts system (WRS) Act in Kenya. The East Africa Grains Council (EAGC), in partnership with the Financial Sector Deepening (FSD) project, is implementing a WRS based on Contract Law where the EAGC rules and regulations on WRS are converted into contractual agreements (warehouse management and commodity care and warehouse receipt protocols) that are signed by the involved parties.

a. If NO, are there are plans to draft a warehouse receipts law? Yes

A Kenya WRS Bill has been drafted by a WRS Steering Committee spearheaded by the Ministry of Agriculture (representing the public sector) and Eastern Africa Grain Council (EAGC) representing the private sector. The WRS Bill 2013 has been presented to the Cabinet Secretary-Agriculture for

70


review before it goes the National Assembly for debate and enactment.

b. In practice, are warehouse receipts used and accepted for the following types of goods

Both agriculture

and industrial

goods

30. Do such laws or regulations specify an entity tasked with registration, licensing, and oversight of warehouses used in warehouse receipts systems?

Yes Since there is no WRS law, EAGC is responsible for licensing warehouses, registering warehouse receipts and enforcing WRS rules and regulations.

a. Is such entity private or public? Private Corporate, with both private and public sector representation.

31. Does the legal and regulatory framework provide clearly established criteria for registering a warehouse, such as specifications for the physical facility and equipment (ex. silos, cleaners, fumigators)?

Yes

EAGC regulatory framework provides a clear warehouse certification process that involves inspection of warehouses using a pre-set certification criterion that mainly covers: structures, equipment (handling and laboratory), staff skills, financial status and insurance covers.


Yes The warehouse certificates are renewed annually. This entails re-inspection of warehouses. (See above).


Yes EAGC-WRS rules and regulations require the operators to apply the EAC Grains and Staple Foods standards.

a. Are such commodity standards and grading systems enforced effectively? Yes


Yes EAGC-WRS has Commodity Care Rules that warehouse operators must adhere to.


Yes

There are two types of inspections: 1. Initial & annual warehouse inspection that is done as part of warehouse accreditation. 2. Periodic checks- these are audits on the grain stocks under WRS –(quality and quantities)


Yes


Yes


Yes

71



No Not yet, but provision for this exists in draft bill.


No It does not currently exist but there is a provision in the draft WRS bill.


a. Name and address of licensed warehouse operator Yes

b. Designation and grade of warehouse Yes c. License number of warehouse Yes d. Name and address of depositor Yes e. Relationship between warehouse operator and depositor if not a strictly disinterested custodianship

No The relationship between the Depositor and Warehouse keeper is done through a Storage Contract.

f. Description and quality of goods Yes g. Whether goods are insured or not Yes h. Net weight of goods Yes

i. Other: [ ] Yes Date of issue and serial number of receipt; whether negotiable or not; signature of warehouse operator.


Yes EAGC set up an arbitration system complete with rules and regulations.

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Product Maize Export Consignment


Value US$20,000 Point of Exit Mombasa Port Product Hybrid Maize Seed Import Consignment


Value US$20,000 Point of Entry Mombasa Port Company Private LLC, majority




I. Time, cost, and documents to export a widely-traded agricultural commodity.

J. Index on legal framework for phytosanitary certificates for export.

K. Time, cost, and documents to import hybrid seed.

L. Index on trade facilitation measures



Time (days)

Cost (USD)

Licenses and Documents Preparation 17 $399

Customs Clearance and Inspection 18 $375

TOTAL 35 days

$774

Documents to Export Commodity Phytosanitary Certificate

Packing List

Terminal Handling Receipts

Department of Agriculture Permit (KEPHIS)

Certificate of Conformity and Test Results

Original Commercial Invoice

Original Bill of Lading

Clean Report of Finding (CRF)

Cargo Delivery Note Certificate of Origin Customs Export Declaration

TOTAL: 11 documents

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Time (days) Cost (USD)



TOTAL 27 days $1,207

Documents to Import Hybrid Seed Import Declaration Form (IDF)

Certificate of Conformity and Test Results


ISTA Orange Certificate

Notice to Import/Export (Form SR14)

Plants Import Permit

Original Commercial Invoice

Original Bill of Lading

Clean Report of Finding (CRF)

Packing List

Inspection Report

Inward Report (Form C2)


TOTAL: 13 documents

74

Trade Facilitation Index (0-7) No data was collected for this indicator.



10. Is Kenya a signatory of the International Plant Protection Convention (IPPC)? Yes https://www.ippc.int/countries/kenya


Yes Per Kenya Plant Protection Act (Cap. 324) and Rules (2009)


By request

Upon request by exporter, the NPPO consults with the NPPO/authority of the destination country on phytosanitary requirements then gives feedback to exporter. KEPHIS has also adopted electronic certification system which contains export requirements to EU.


Published online

www.kephis.org includes information on plant protection and relevant fees.

14. Can exporters request a phytosanitary certificate on the internet? Yes Can be done via e-mail or through Electronic

Certification System. 15. Can exporters make an electronic

payment for phytosanitary export certification?

Yes Electronic payment will be possible when Kenya adopts a single window system. Most exporters currently pay by check.


d. The exporter’s warehouse or storage facility? Yes Particularly for commodities such as Coffee, Tobacco, etc.

e. Bonded warehouses? Yes f. All points of exit from Kenya

(including land, air, and sea ports)? Yes Inspectors are deployed in all exit/entry points, as well as KEPHIS office locations.


Yes This is communicated to the exporters promptly.


-

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G. Index on legal framework for contract farming. H. Index on system for establishing public grades

and standards for a widely-traded staple crop. I. Index on access to expedited or alternative





Yes

The general law on contract (Law of Contract Act, Cap 23) provides for freedom of contract and is based on the English common law. Nevertheless, depending on the agricultural produce, there are certain legal requirements that ought to be observed when entering into a contract.


No

It is a liberalized market although there are a few product-specific legal requirements. For instance, the Sugar Act gives the Minister for Agriculture the power to promulgate regulations on sugar marketing and contracts within the sugar industry. Under the Sugar Act, Kenya has promulgated detailed regulations and a standardized contract for use between growers and millers.

17. Are the parties to a contract freely allowed to establish prices for payment? Yes

This depends on the agricultural product. For instance, maize prices are determined by the normal market forces of demand and supply. However, prices are also affected by the activities and policies of the National Cereals and Produce Board (“NCPB”). Under the Dairy Industry Act, the Minister is given the power to set the price paid to Producers.

18. Does the legal framework recognize force majeure (i.e. unpredictable events such as natural disasters or pest outbreaks that are beyond the parties’ control) and its use as a

Yes

The law on contract is based on English common law principles, which includes frustration or acts of God as defenses for non-performance, although this is usually provided for in the contract for sale.

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reason for non-performance?


Yes

The law on contract is based on English common law principles, which includes frustration or acts of God as defenses for non-performance, although this is usually provided for in the contract for sale.


Yes

The law on contract in Kenya is based on English common law principles, which recognizes duress/coercion, misrepresentation or fraud as legal defenses.


Yes It is possible to apply under certificate of urgency for interim orders for sale and/or preservation of goods.

Grades and Standards Index (0-12) This index is scored for maize.


11 Comments


Yes

The National Cereals and Produce Board (“NCPB”) Act empowers the Minister after consultation with NCPB to make regulations for the better carrying out of the provisions of the Act, which includes providing for the standards to which maize acceptable for delivery to NCPB shall conform and the grading and classification of maize. The NCPB is also a member of the Kenya Bureau of Standards board that develops standards of maize. There are other bodies that are relevant to grading (please see below). It is noteworthy that Parliament has enacted The Crops Act, which was signed into law on 14th January 2013 and shall come into force on notice. It consolidates and repeals various statutes relating to crops and provides for the growth and development of agricultural crops including maize.


Yes

The quality specifications for commodities are based on Fair Average Quality (FAQ) parameters. These parameters where applicable are adopted from the Kenya Bureau of Standards. Kenya also complies with the East Africa Community (“EAC”) Standards. The maize grades document specifies only two maize grades, grade 1 and 2. Each

77


11 Comments

of the grades must have a moisture content of at most 13.5% while the level of Aflatoxins must be in accordance with ISO 16050 (10ppb incl. max 5 ppb B1). There are other EAC Standards on maize besides this. The Kenya Agricultural Research Institute (KARI) works together with the Kenya Seed Company in researching to develop hybrid seed maize varieties that are suitable to the various ecological zones in Kenya. The National Seed Quality Control Services (NSQCS) under KARI is responsible for the certification of maize seed. Kenya Plant Health Inspectorate Service (“KEPHIS”), a regulatory body established under the State Corporations Act (Cap.446) pursuant to Legal Notice No. 305 of 1996 is charged with offering inspectorate services on all matters relating to plant health and quality control of agricultural inputs and produce. The seeds also have to adhere with the standards set by the Kenya Bureau of Standards (“KEBS”) with respect to weight, packaging, manufacture and expiry dates and instructions on use.


Yes

Kenya is a member of Codex Alimentarius Commission and its contact point is the Kenya Bureau of Standards. It adheres to Kenya Codex Standards for edible maize oil (KS CODEX STAN 25). Kenya also complies with East Africa Community Maize quality Standards which specify only two maize grades, grade 1 and 2. Each of the grades must have a moisture content of at most 13.5% while the level of Aflatoxins must be in accordance with International Standard Organisation (ISO) 16050 (10ppb incl. max 5 ppb B1). Kenya also complies with agricultural standards set up by the United Nations Economic Commission of Europe (UNECE).


Yes

Kenya Plant Health Inspectorate Service (“KEPHIS”), is a regulatory body established under the State Corporations Act (Cap.446) pursuant to Legal Notice No. 305 of 1996 is charged with offering inspectorate services on all matters relating to plant health and quality control of agricultural inputs and produce. KEPHIS is empowered in relation to seeds to, among other duties sample and test seeds and

78


11 Comments

certify their quality.

25. Does the legal framework provide a clear institutional mandate and authority for the development and management of grades and standards pertaining to contamination and chemical residues? (e.g. Standards Authority, Min. of Agriculture)

Yes

They include: The Kenya Bureau of Standards is established by the Standards Act, Chapter 496, Laws of Kenya. The National Cereals and Produce Board is established by the National Cereals and produce Board Act, Chapter 338, Laws of Kenya. The other agencies include Kenya Agricultural Research Institute (KARI), Kenya Plant Health Inspectorate Services (KEPHIS), Department of Public Health (DPH), Weights and Measures Department (WMD) and Government Chemist's Department.


Yes

Kenyan Standards are mandated by the Standards Act, Chapter 496, Laws of Kenya. East Africa Community Standards are mandated by the East Africa Customs Union Protocol signed in December 2004 and implementation began on 1st January, 2005.


Yes

Most Kenyan standards are adopted from international ones, such as International Organization for Standardization (ISO) and Codex Alimentarius Commission (CAC) and follows the philosophy of World Trade Organization (WTO) Sanitary and Phytosanitary Standards (SPS) and Technical Barrier to Trade (TBT) agreements.


Yes

Kenya Plant Health Inspectorate Services offers inspectorate services on all matters related to plant health and quality control of agricultural inputs and produce.


Yes

The development of standards passes through various stages where both private and public sectors are involved so that the end result is acceptable to various interest groups as possible.


Other Same as above


Yes, both public and

private

Kenya Bureau of standards testing laboratories are managed in accordance with International standard ISO/IEC 17025 on general requirements for competence of testing and calibration laboratories.

79


11 Comments

labs Kenya Plant Health Inspectorate Services offers inspectorate services by subjecting the plants to tests for compliance in its laboratories. The Kenya Agricultural Research Institute (“KARI”) is the body that is mandated to carry out agro-based research services by the government. Other agencies are such as the Sustainable Agriculture Centre for Research and Development in Africa, International Maize and Wheat Improvement Center and academic institutions such as the University of Nairobi, Jomo Kenyatta University of Science and Technology, Moi University, and Egerton University.

a. Are there ISO accredited laboratories in Kenya? Yes

Kenya Bureau of Standards laboratories are certified under ISO 9001: 2008. Kenya Agricultural Research Institute is also certified under ISO 9001: 2008.

12. Are there uniform units of measurement across all food and agriculture-related commerce Yes

The Weights and Measures Department under the Ministry of Trade recommends the use of weighing and measuring equipment for cereals by traders that have been approved, verified and stamped to ensure uniform units of measurements.


Yes The National Cereals and Produce Board has various networks across Kenya which have weighing, measuring and sorting facilities that traders use.




Yes

Civil claims are allocated to the small, fast and multi-track as appropriate. There are also different levels of court with pecuniary jurisdiction. Urgent applications can be heard under an application made to the court known as Certificate of Urgency.


Yes

Arbitration is formally recognized under the Arbitration Act 1995. There is also a general power to encourage parties to use informal ADR methods including mediation.


Yes

Arbitration is well established as a formal ADR mechanism and would apply the law of the contract. The rules application to informal ADR methods would need to be agreed between the parties.


Yes

The costs of arbitration are within the award of the arbitrator. Since the arbitrator is paid on a time spent basis this generally would not be cost effective for small disputes. Other informal methods such as mediation may be more cost effective. For example, traditional ADR methods are likely to be very

80

reasonable.

a. Are the costs entailed typically less than that of the traditional court system? No

Arbitration is not cheap, but is attractive because it is faster than Court. Other informal ADR methods are likely to be cheaper than Court.


No


N/A


Yes

43. Are expedited or alternative mechanisms readily available outside of Nairobi? No Mostly in Nairobi and Mombasa.


Yes

Arbitration awards are formally recognized and upheld by the Courts. If parties use informal ADR methods they may need to record a Consent Order for the settlement to be formally recognized and become enforceable.

81


G. Time, cost, and procedures for business registration and licensing of a mid-sized staple grain farm. Requirements may include national or local trading licenses, chemical storage requirements, workplace or employee registration, environmental permits, and company registration.

H. Index on access to business registration information.

Case Study Farm Crop Millet, Maize, Sorghum Farm size 10 hectare Location Sikasso Legal Form Limited liability

company Annual Revenue US$10,000 Land tenure 50 year lease Market Farm gate, local market

Mali

Procedures, Time, and Cost to Start-up a 10-hectare Farm

No. Procedure Time (days) Cost (US$)9 Agency

1.

Obtain letter from notary authorizing deposit of capital By law, notaries must undertake the registration of a limited liability company (SARL). The aspiring entrepreneur (founder) typically consults a notary on the choice of the legal form of the business (form juridique), based on the business size and activities. The notary drafts a letter addressed to the bank to ask for a provisional account to be opened for the creation of a new company. This letter indicates the name and address of the new company, because the bank account must be in the SARL’s name. The founder takes this letter to the bank to open an account and deposit the company capital.

1 0 Notary

2.

Open account and deposit company capital at a bank Deposit capital with a bank or notary. Under the uniform OHADA business law, the minimum capital for a limited liability company (SARL) is CFA 1 million. The minimum capital can be cash or in-kind, such as agricultural equipment valued by a financial expert. The minimum capital deposit will remain inaccessible to the business until the registration process is complete.

1 0 Bank or notary

9 Exchange rates as of January 13, 2014 (CFA 479.82 per USD). Costs are rounded to the nearest dollar.

82


The founder’s notary may deposit the funds on their behalf; however, respondents noted that it is faster and more common for the founder to deposit the funds herself and provide the notary with the deposit slip. API-Mali is currently working to get bank representatives located within the one-stop shop (guichet unique) which will further reduce the time to register a business.

3.

Draft Notarial Deed, Register in the Commercial Register (Registre du Commerce) and form the business (Société a Responsabilité Limitée – SARL) Notary fees are set by law at CFA 250,000 for SARL registration. After depositing the minimum capital, the founder returns to the notary and brings the deposit slip. The notary will then draft a Declaration de Souscription attesting that the minimum capital has been paid. Prerequisites to registration. The founder will: • Sign a declaration of honor (Declaration sur l’honneur) that

attests their clean criminal record in order to proceed with business registration. The entrepreneur must later obtain a copy of his or her criminal record (casier judicaire) from the Court of First Instance (Tribunal de Première Instance) in the jurisdiction of birth within two months of registration. Fee of CFA 750 per page.

• Provide a photocopy of each shareholder’s identity card. The notary will: • Draft the articles of incorporation of the company (statuts). • Attest that the minimum capital was paid (Declaration de

Souscription or bank deposit slip). Registration of the company in Bamako.10 In Bamako, business registration is possible through a single-window office (guichet unique) located at API-Mali, the government investment promotion agency. The Trade Register (Registre de Commerce, RCCM), the tax authority (Service des Impots), and the social security office (INPS) are all located within the guichet unique. All required documents (RCCM registration number; NINA and NIF tax identity cards; and social security registration for employees) can be obtained from the

Max. 3 days in Bamako

Est. 5-6 days in the regions

534 Notary

10 See Mali e-Regulations site for detailed data on business registration in Bamako. http://mali.eregulations.org/procedure/185/125/step/556?l=fr

83


guichet unique in a maximum of 72 hours. This requires only one “step” for the founder, who only needs to return to the notary after business registration is complete to pick up the forms. According to API-Mali, 80% of all company creation since API was founded in 2009 has occurred in Bamako. The notary will: • Deposit five copies of the dossier at API-Mali’s Guichet

Unique. • Complete a “Request for Company Creation” form

addressed to the Minister of Industry and Investment (for registration at API-Mali’s Guichet Unique).

• Pay registration fees: o RCCM registration (trade register) – CFA 15,000. o NINA registration – CFA 1,000. o Guichet unique fee – CFA 5,000 for SARL. o Registration of the statuts with the tax authority (Impots)

– CFA 6,000. o Registration of the Declaration de Souscription with the

tax authority – CFA 1,250. o Publication of the statuts in a journal – CFA 20,000. o All fees except the NINA and the guichet unique fee

(total CFA 6,000) are included in the notary fees. • After 72 hours, the notary’s clerk will retrieve the RCCM

registration certificate, NINA number, and Tax ID card (NIF) from the guichet unique. Three copies of the dossier remain at the Commercial Court / RCCM. One copy is provided to the notary, and one to the founder.

• Once registered, publication is made in an official journal. API will publish a listing of the new company on its website on a weekly basis as well as in the Malilex legal journal. The notary may also publish a notice in the newspaper.

Registration of the company outside Bamako. Outside of Bamako, the guichet unique is not yet available. API is currently constructing a branch office in Kayes, and plans to open offices in Sikasso and Segoú within the next two years. Notaries are located in five of Mali’s eight regions. However, a notary’s jurisdiction extends over the entire country – any notary can do work in any area of Mali. The notary will: • Register the company at the Trade Register (Registre de

Commerce). This can occur in one of three ways: o Go to the Trade Register at the Commercial Court in

Bamako, Kayes, or Mopti. Per OHADA law, companies must be registered by the Chief Clerk of the Commercial Court (Greffier en Chef du Tribunal de Commerce). In Mali, there are only three commercial court locations. Where there is no notary the Greffier

84


can assist the entrepreneur with registration. o Go to the Tribunal de Première Instance, the civil court

with jurisdiction over the company’s home location. Although the Tribunal de Première Instance is a civil court, they can act as a commercial court in this matter and register the business.

o Transmit the dossier to Bamako for registration through the API-Mali Guichet Unique. The company must be registered with the tax authorities in its home location, but according to a notary, registration in the Trade Register can occur at any RCCM.

• This step is estimated to take 5-6 days for a business located in Sikasso region. The process reportedly takes “less than a week” at the Court of First Instance. Registration is faster at the Commercial Court or the Guichet Unique, but includes two days roundtrip for travel.

In the regions, the notary’s role ceases after the business is registered. The founder must then go to each office to complete the requirements listed below. Steps 4 and 5 are not required if registering a business in Bamako, since this can be done at the Guichet Unique.

4.

Tax registration (NINA) and obtain a fiscal ID number (NIF) Outside of Bamako, the founder must go to the Tax Authority for tax identification. The founder must go to the district-level (Cercle) tax office (perception) – the district authorities where the company will be based. In the future all corporate or individual tax identification, and social security, will be through a single identification number, the NINA. The NINA will replace other identification numbers. For the time being the NIF is still being issued.

2 0 Tax Authority (Service des Impots)

5.

Registration of employer at the National Retirement office In Bamako, there is an INPS delegate within the Guichet Unique. API-Mali provides all the forms for registration with the INPS. Outside of Bamako the INPS offices are located at the Cercle level. Employers must register with the INPS. Employees must also register individually, which costs CFA 200 for copies of birth and marriage certificates and takes 15-20 days to obtain a social security card. The amount of the social insurance is a percentage of the employee’s gross salary. Details are available at the Mali E-Regulations site: http://mali.eregulations.org/procedure/169/152/step/269?l=fr

1 0 National Social Security Office

(INPS)

85


N/A

Registration with the Chamber of Agriculture (APCAM) Any “exploitation agricole” may register with the local Chamber of Agriculture (Chambre d’Agriculture, APCAM). Until now, only farmers’ organizations have registered, however individual farmers are also starting to register. It remains to be seen if other agribusinesses like seed and fertilizer suppliers are eligible. To register, the head of the farmer organization must meet local APCAM representatives, usually village delegates or customary authorities. The applicant must provide information on the organization’s activities (members, equipment, and area/location under cultivation), a valid identity card such as a NINA, and must complete and sign the registration form. Registration is completed by four village delegates or a district APCAM agent, and a registration certificate is issued within 30 days of registration. Once registered as a recognized farmer organization, APCAM can assist farmers in obtaining financing, entering into legally-binding contracts, receiving subsidies on fertilizers and pesticides, and accessing other extension activities or donor support. Farmer registration at APCAM was reportedly initially low. A World Bank project provided funding to APCAM to increase their support to farmers. At present, respondents noted interest in registering to gain access to various assistance and support provided by APCAM.

30 0

Chamber of Agriculture (Assemblée

Permanente des Chambres

d'Agriculture du Mali, APCAM)




4 Comments

17. Are registration documentation and information on fees publicly available? Yes For instance, at the Single Window (Guichet Unique)

at the API-Mali office in Bamako.


See the API-Mali website: www.apimali.gov.ml www.mali.eregulations.org

19. Is registration possible in every state/province? No

Public services required for SARL registration are not present in most regions. There are only three commercial courts in Mali in Bamako, Kayes, and Mopti. In addition, notaries are located in Bamako and in five of the eight regions (Kayes, Sikasso, Segoú, Mopti, and Gao). In practice, the most common work-around is to come to Bamako.

86


4 Comments


Yes

The registration steps are the same, but there are slightly different documents and obligations for large companies which choose the SA company form rather than the SARL. For instance, the minimum capital for an SA is 10 million vs. 1 million for a SARL, and SA notarial fees are twice as expensive (CFA 500,000). Once operational, the SA must hire a certified CPA to maintain their accounts. The SA company form is advantageous for large firms in that it allows independent shareholders and easily-transferrable shares.

21. Are registration steps the same regardless of the nationality of ownership? Yes

The registration steps are the same. Non-Malians must complete one additional form, a Certificate of Residence for Foreigners (Certificat de Residence pour les Etrangers). Regardless of their nationality, entrepreneurs must provide a criminal record (casier judiciare). Foreigners must obtain the report from their home country, which in some cases can be issued through their embassy in Mali.

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G. Time, cost, and procedures to obtain operational licenses for a seed supplier. Requirements may include import license, seed dealer license, license for storage facilities, national or local trading licenses, and inspections.

H. Time, cost, and procedures to register a new proprietary seed variety.



Type of Seed Hybrid Maize Location Bamako Ownership Domestic, non-state-owned

enterprise

Licenses and Permissions for Seed Provider11

11 Relevant Laws: 1. Mali Seed Act 2010 (Loi No. 10-032 du July 2010: Relative Au Semences d’Origine Végétale) 2. Décret No. 10-428 /P-RM du 9 AUOT 2010 : Fixant les modalités d’application de la loi relative à la législation des semences

d’origine végétale 3. Manual on registration of new seed varieties. (Manuel de procédures pour l’inscription des variétés au catalogue national des

espèces et variétés). May 2010 4. Manual on seed certification and accreditation. 5. ECOWAS Regulation c / reg.4/05/2008 on harmonizing the rules governing quality control, certification and marketing

of vegetable seeds and seedlings in ECOWAS. 6. Loi d’Orientation Agricole du Mali (2006)


1

Register as a seed provider (Inscription) There is a free, one-time registration with the DNA for new seed suppliers. This requirement was put in place in 2012. The company must write a letter to the National Director of Agriculture who will sign and send it to the Division Filiere for processing.

1 0

Division Filière of the National Agriculture Direction

(Direction Nationale de l’Agriculture,

DNA)

2

License for distribution and sale (Agrément de distribution et de vente) A new requirement as of 2013. The DNA issues a license to authorize the supplier to conduct business as a seed dealer. Renewable annually. Seed suppliers in in Mali may only trade in certified seed.

3 104 DNA

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Total time: Maize: 4-5 years Sorghum: 2-3 years Total cost: Maize: CFA 5 million if introduced by private company, or funded by research institution Sorghum: Funded by research institution Varietal development through the research institutions (i.e. sorghum) New varieties are exclusively developed by research institutions (e.g. IER, ICRISAT). Researchers may develop their own lines or may obtain samples from other regional research organizations. No private seed company in Mali is currently developing proprietary seed varieties. The Mali Seed Law (2010) allows private companies to develop their own proprietary varieties. However, doing so is not currently commercially viable for crops like sorghum and millet – due to low market demand, companies could not recoup their R&D investment. Nor do seed companies have breeders on staff to develop new maize or rice varieties, which may be more commercially viable. Research institutions develop new varieties of cereal seed such as sorghum (ICRISAT) and maize and rice (IER). For sorghum, variety development is often done with farmer input throughout the process through on-farm trials (participatory variety development).13 The most promising varieties are selected and tested based on internal controls. This process typically requires a minimum of 2-3 seasons of field testing (2-3 years) at 10-12 sites, at the discretion of the breeder. Once the research institution is satisfied with the results and evidence on the efficacy of the new variety, the breeder produces a technical overview (fiche technique) that describes the variety and lists its characteristics. The breeder submits this document to LaboSEM. Once LaboSEM receives the fiche technique, the variety may be produced, certified, and sold in Mali. LaboSEM will periodically publish the new variety in the national catalogue of varieties (published in 2002 and 2013) which includes a technical description of each approved variety. In practice the catalogue is not kept up to date and may include varieties no longer in use.

12 Note: The regulations specify that seed business licenses are valid for 3 years, however according to the DNA they must be renewed annually. 13 Participatory development refers to testing the variety with farmers throughout the development process to gather data on environmental factors and cultivation methods that affect the variety’s performance. This includes demonstration plots; data collection on farmer preferences and intended adoption of the variety; agricultural extension; and taste tests.

There is a separate license (agrément) for seed producers. There is no annual import license; the import permit and the request to import (intention d’importation) suffice. Note: No import license or permit is required to import seed into Mali. Seed is exempt from Mali’s pre-shipment inspection program. The importer must only submit an Intention to Import form (Intention d’Importation) to the National Direction of Competition (Direction Nationale de Compétition et de Concurrence, DNCC) for each import shipment. This takes three days and is free, although banks often charge fees of around CFA 3,000 to stamp the form. Relevant Law: Chapter 2, Article 5 of Decret 10-428.12


89

The Mali Seed Law (2010) and a technical manual produced by the DNA establish a standard testing protocol that requires a system of national trials (such as DUS and VCU testing), review, and release for all cereal seed varieties. This approach is meant to align Malian requirements with the harmonized ECOWAS seed regulations.14 To approve and release new varieties, a Comite National de Semences de Origine Végétaux (CNSOV) was established. The CNSOV’s membership and responsibilities are described in the Mali Seed Law. As of April 2014, the CNSOV members have been appointed, but no budget has been allocated and the CNSOV reportedly has not met or released any new varieties yet. For the time being, it appears that the CNSOV role in variety release has been delegated to the research institutions, and that the program of national trials is not yet being implemented. Private sector introduction of a new variety (i.e. maize) Seed suppliers may introduce new seed varieties in use outside of Mali. Respondents were aware of this occurring once or twice for hybrid maize seed, but never for rice seed. Maize trials and variety development are managed by IER. 1. After receiving an import permit (Permis d’importation) from the DNA (max. three days, CFA 5,000), the seed supplier may import a small amount of seed for research purposes. 2. Upon arrival in Mali, a seed sample is provided to IER for testing, along with any technical documentation and reports on the variety’s research efficacy, yield, germination rate, purity, and processing. Initial germination tests by IER take 10-15 days, depending on the species of seed. The variety will then be sent for field trials. In practice, some farmers or seed companies may not go through the official registration process and instead bring seeds into Mali directly (by mail or in personal luggage) for immediate use. 3. IER conducts field trials. For maize, respondents reported that the variety is typically tested for four seasons in at least four locations. With one growing season per year, this takes on average four years. Field trials reportedly cost 1-1.5 million CFA per season, depending on the number of testing sites, or a total of approx. CFA 5 million. 4. IER reviews the results of the trials, releases the variety, and notifies the supplier that they may begin sales. 5. By law, research institutions are the only entities in Mali that may produce foundation (souche) and pre-base seed. The seed supplier will then make a request to the relevant research institution for the needed quantity of foundation or pre-base seed.

14 Variety development under ECOWAS harmonized seed regulations. Per ECOWAS seed regulations, new varieties of all cereals must undergo an official release before being listed in the national catalogue. The applicant would first make an application and provide a technical dossier with testing data to the competent authority. The variety undergoes field testing according to the DUS (2 seasons, 1 site) and VCU (2 seasons, multiple sites) protocols. After field testing, a case is filed with the National Seed Committee (CNS); the name of the new variety is specified and the filing fees paid; a technical evaluation and recommendation is made to the national seed committee (CNS), and the variety is released by the Minister of Agriculture. As of April 2014 in Mali, the CNS members have been appointed but no budget has been allocated; therefore CNS is not active and has not been convened.



No Only agricultural research organizations are authorized to do such testing.


No

Once implemented in Mali, the harmonized ECOWAS regulations will allow for establish a common catalogue of seed varieties within the economic community.

a. If YES, with which country(s) and what is the facilitated process? -

12. Is Mali party to a regional agreement with respect to common procedures for variety testing, registration, and/or release that is effectively implemented in practice?

Yes

The ECOWAS community passed harmonized seed regulations in 2009 and Mali is a party to ECOWAS. Mali is considering the publication of the ECOWAS

90

Regulation in its official journal as an endorsement of the regional regulations. ECOWAS regulations have not yet been implemented in Mali. In the meantime, Mali passed a new seed law in 2010 that was meant to adapt Malian law to the ECOWAS regulations.

a. Is it implemented in practice? No

91


G. Time, cost, and procedures to obtain operational licenses for a fertilizer supplier. Requirements may include import license, fertilizer dealer license, licenses for storage facilities, environmental permit, national or local trading licenses, and inspections.

H. Index on the legal and institutional framework for the fertilizer sector.




Location Bamako Ownership Domestic, non-state-owned

enterprise



1

Approval (Agrément) for Fertilizer Distribution This is a new requirement as of 2013. A simple request (demande) is sent to the DNA. This license authorizes the company to sell fertilizer in Mali. The agrément is initially valid for one year. Once the agrément expires, the DNA plans to issue licenses with longer duration that will be valid for five years. This may also increase the fee for this license. Note: No import license or permit is required to import fertilizer into Mali. Fertilizer is exempt from Mali’s pre-shipment inspection program. The importer must only submit an Intention to Import form (Intention d’Importation) to the National Direction of Competition (Direction Nationale de Compétition et de Concurrence, DNCC) for each import shipment. This takes three days and is free, although banks often charge fees of around CFA 3,000 to stamp the form. Relevant law. Article 2 of Decree 08-177 on the control of fertilizer quality states: Any natural or legal person wishing to produce, distribute, or import fertilizer wholesale must register with the National Direction of Agriculture.

1-2 104

National Direction of Agriculture

(Direction Nationale de l’Agriculture,

DNA)

92

15 Office du Niger is a government agency in the Ségou region that administers a large irrigation project.

N/A

Obtain Carte Professionelle The Chamber of Commerce issues a professional card (carte professionelle) that certifies the activities of the business. The fee varies based on the size of the business; there are several classes based on annual turnover. The professional card is not required, but may be useful to bid on large fertilizer tenders. In order to bid companies may be required to provide a photocopy of the carte professionelle as part of the dossier of application documents.

1 0

Chamber of Commerce (Chambre de Commerce)

N/A

Regular Fertilizer Sampling & Testing Starting three years ago, due to concerns over fertilizer quality, the Legislative and Phytosanitary Control Division of the DNA began regularly taking samples to test fertilizers sold in Mali. Warehouses and distribution/sale points are checked at random, while Toguna’s facility (the only fertilizer manufacturing plant in Mali) is checked weekly. Imported consignments of fertilizer are subject to pre-shipment inspection in addition to controls at the border. The DNA periodically notifies fertilizer suppliers of their test results. DNA inspectors send fertilizer samples to the Soil, Water, and Plant Laboratory (LaboSEP) at the IER Sotuba research station. There are no testing fees. Respondents noted that AGRA has supported LaboSEP to improve the quality of the testing by financing upgrades to the laboratory. LaboSEP can now test for the presence of nutrients such as magnesium in fertilizer. AGRA is also supporting the DNA in the development and implementation of fertilizer regulations in Mali. Buyers such as CMDT and the Office du Niger15 issue tenders to procure large amounts of fertilizer. The procurement contracts also stipulate fertilizer analysis. Per Buyer request, LaboSEP will test fertilizer samples to confirm the nature of the product, as well as checking bag weight and labels.

N/A 0

Legislative and Control

Phytosanitary Division of the DNA (Division

Législation et Contrôle Phytosanitaire,

Direction Nationale de l’Agriculture,

DNA)

N/A

Reimbursement through the GoM fertilizer subsidy program Trade in fertilizer is conducted by private suppliers based on farmer demand. Buyers such as CMDT and the Office du Niger issue tenders for large amounts of fertilizer. The Government of Mali subsidizes the price of fertilizer to farmers by reimbursing fertilizer suppliers for the quantity of fertilizer sold to buyers who have hold a certificate (deposit technique) issued by the regional Ministry of Agriculture office (Direction Regionale de l’Agriculture). This certificate determines how much fertilizer the buyer can purchase, based on the amount of land under cultivation. (Purchases through the subsidy program are capped

180-365 0 DNA

93



10 Comments

1. Is there a fertilizer law(s) and regulations? Yes Law no. 08-008 of February 28 2008 on Control and Quality of Fertilizer (Loi N°08-008 du 28 Février 2008 relative au Contrôle de Qualité des Engrais).


j. Set truth-in-labeling guidelines? (e.g. fertilizer bag labels must includes the Netherland’s official language(s), net weight or volume, “guaranteed analysis” of minimum levels of nutrients claimed, directions for use, and health and safety precautions)

Yes

The formula: -Guaranteed nutrient content; and -Weight, name and address of the manufacturer or packer. (Decree No. 2012-0146/MA-SG)

k. Prohibit the sale of open, mislabeled, or adulterated bags of fertilizer?

Yes Decree of Vigor (Arrêtée en vigueur)

l. Establish rules for the accreditation of third-party certification of fertilizer quality? (e.g. an accredited private laboratory network)

No

Inspectors send all fertilizer samples for analysis to the Soil, Water, and Plant Laboratory (LaboSEP). Fertilizer suppliers may have their own labs or send samples to private laboratories for their internal verification, but this does not substitute for official test results.


Yes Legislative and Phytosanitary Control Division of the DNA (Division Législation et Contrôle Phytosanitaire, Direction Nationale de l’Agriculture, DNA)


a. Fertilizer production and storage facilities? Yes

• Decree No. 08-177/P-RM of March 27 2008 (Décret N°08-177/P-RM du 27 Mars 2008) sets out the arrangements for implementing the Law on the Control and Quality of Fertilizers.

• Decree No. 2012/146/MA-SG (Arrêtée N°2012/146/MA-SG). The Decree and Order set

at 5 bags or 250 pounds of NPK per hectare). The subsidy program has allowed the retail price of NPK fertilizer to remain at CFA 12,500 (US $26) for a 50kg bag since 2008. The actual amount of the subsidy depends on international market price of fertilizer each year. At the end of each season, distributors collect the deposit technique documents and submit them to the DNA to receive reimbursement for the quantity of fertilizer sold through the fertilizer program. Reimbursement may take six months to a year.


94


10 Comments

out the conditions. b. Fertilizer at the point of sale (e.g. at retail shops)? Yes Points of sale are regularly inspected by the agents of

the Legislative and Phytosanitary Control Division.


Yes

Each inspection has one sampling for analysis in the presence of the operator. Sampling and analysis occurs regularly and the fertilizer suppliers are periodically informed of the test results.


Yes Respondents noted that LABOSEP is very well equipped due to recent AGRA-financed upgrades.


No


No

Trade in fertilizer is conducted by private suppliers based on farmer demand. Buyers such as CMDT and the Office du Niger issue tenders for large amounts of fertilizer. The Government of Mali subsidizes the price of fertilizer to farmers by reimbursing fertilizer suppliers for the quantity of fertilizer sold to buyers who have hold a certificate (deposit technique) issued by the regional Ministry of Agriculture office (Direction Regionale de l’Agriculture). The subsidy program has allowed the retail price of NPK fertilizer to remain at CFA 12,500 (US $26) for a 50kg bag since 2008. The actual amount of the subsidy varies depending on international market price each year.

95


J. Time, cost, and procedures to transfer farmland. Requirements may include cadastral survey, title and encumbrances search, valuation and inspection, government consent to transfer, stamp duty and transfer tax, and registration of deed of sale.

K. Index on access to property registration information.

L. Index on legal framework for leasing farmland, including customary land.


LLCs Farm size 10 hectares Purchase Price US$ 33,025 Location Sikasso Land Tenure Provisional title (tire

proviso ire)


Note: Almost all rural land in Mali is administered under customary/traditional law. The procedure described here refers to a concession rurale, in which farm land is transferred from a Seller who has customary rights to the land to a Buyer, who then initiates the process of obtaining a formal land title. Customary land is first converted into a temporary title (titre provisoire de concession rurale), which then can be converted into a permanent land title (titre foncier). In order to proceed from a temporary title to a permanent land title, certain conditions (cahier de charge) are established by the Prefect that require the owner to improve the land (by meeting required levels of investment in the land) and to pay an annual land tax. Obtaining a land title (titre foncier) in Mali is a very costly process that can take 5-10 years. Due to the significant time and cost involved in obtaining a land title, it is rare for rural land to be titled. The process that is described here is to obtain a temporary title (titre provisoire). While the formal costs to obtain a titre provisoire are low, the informal costs involved are so varied – and in some instances, so costly – that it is very difficult to measure the true cost of going through the process. Land located in the Office du Niger region is leased by individuals from the government under a separate governance structure; it is therefore not covered here.

96


1.

Act of Recognition (Acte de Reconnaissance) • An act of recognition is completed to establish that the

owner is the rightful owner of the land. • The village chief talks with all the neighbors of the plot

to confirm the perimeters of the plot. • At least two well-respected members of the village need

to witness to that the owner is the rightful owner of the land.

• A document (act of recognition) is established to confirm the owner’s customary right to the land. Two copies are made – one kept by the owner and one by the village chief.

• The fee is small but varies between 2,000-5,000 CFA depending on the location.

The time it takes to complete this step depends on how far away from the center of the village the plot is located, and whether the neighbors are home so that the chief can talk to them.

1-30 8 Village Chief

2.

Sign and witness the Sale Contract (Acte de Vente) • The customary owner and the new buyer establishes a

sales contract • Two witnesses sign the sale contract. Typically the village

chief and a member of the village council act as witnesses, but any villager can serve as a witness.

• There is no cost associated with the sales contract. In some areas, it is common for the Buyer to give the chief a token gift of 10 kola nuts or a chicken.

• It has become more common to make photocopies of the sales contract and leave one with the village chief and one with the mayor/sous-Prefet/Prefet as a proof of the transfer, however, the sales contracts are not registered per se and this is not a required step.

According to customary law, the transfer is now complete. Taxes and Land office (Impots et Domaines).

1 0 Village Chief

3.

To proceed to obtain a temporary title (titre proviso ire de concession rurale) – Hire a surveyor (géomètre) • Hire a surveyor to establish the boundaries of the plot. • The surveyor establishes a map that he/she signs. • The surveyors are private and there are no set fees for

their services. The price is determined by the size of the plot and the travel costs incurred by the surveyor.

• For an additional fee, the surveyor can also handle the submission of the request for a temporary title.

• The assessment team was told that the surveyor fee for a 16 Ha plot of agricultural land in a peri-urban area outside of Bamako was 2.6 million CFA which included

1-2 Private fees set by the surveyor

Private

97

the handling of the request for a temporary title. Another respondent stated that the transportation fee for a surveyor is at a minimum 10,000 CFA/day plus the surveyor’s fee. The surveyor’s fee is reported to be manageable for a Malian with paid formal employment, but costly for small-scale farmers.

4.

Request for a temporary title (Titre provisoire de concession rurale) • A request to acquire a temporary title is made to the

Prefect. The application package needs to be submitted in five copies and should contain the following: o A written request to transfer the land o Act of Recognition o Sales Contract (Acte de Vente) o Photocopies of the Seller and the Buyer ID cards o An official stamp (500 CFA) o Map and coordinates established by the surveyor o Terms and condition form (cahier de charges). The

terms and condition form is a standardized form established by the Préfecture. The form specifies what improvements need to be made to the land and establishes an annual land tax that needs to be paid.

• The total length to get a temporary title (procedure steps 4-6) varies significantly and can take 3 months to two years.

• There is reportedly no official fee for the temporary title. If there is an official fee, it varies by Prefect.

Note that there are different offices in the administration that have the competence to handle a request for a temporary land title. A request for a temporary title for land for up to 2.5 ha should be submitted to the sous-Prefet, for land up to 10 ha should be submitted to the Prefet, and requests for land that is greater than 10 ha should be submitted to the Governor.

3 months-2 years 0 Préfecture

5.

Inspection by the technical services • The Prefet sends the application to the technical services

for review : o Geographic Institute of Mali (Institute Geographique

du Mali) o Rural engineers (Génie rurale) (agricultural engineers

and possible livestock depending on the case) o Regional land and cadaster directorate (Direction

Régionale des Domaines et du Cadastre) o The technical services will make a site visit to

inspect the plot, confirm that the plot boundaries match the plot map, value the land and buildings, and conduct other technical assessments as needed (e.g. on agriculture and livestock).

o If the applicant wants the technical review process

2-3 weeks Included in the

previous procedure.

0

Institute Geographique du Mali, Domaines et Cadastre, Direction

Urbanisme et Construction

98

Transforming Temporary Title to Permanent Title (titre fonciere) A holder of a temporary title has five years to initiate the process to convert the temporary title to a permanent land title. If the owner of the land waits longer than five years, he/she will have to start over with the temporary titling process before being able to proceed with the land titling process. To qualify for a land title, the landowner needs to improve the land in accordance with the conditions (cahier de charges) set forth in the temporary title and pay an annual land tax. If these conditions have been met, the owner then submits the same or a similar application for the land title as he/she did for the temporary title. The application is submitted to the regional land and cadaster directorate (Direction Régionale des Domaines et du Cadastre). The land will again have to be surveyed by a surveyor, a public hearing will be held and advertisements made in the newspaper to ensure that there are no other claims on the land. There are significant fees associated with getting the land titled. The cost of the land taxes varies depending on the location, but ranges from 600 CFA-10,600 CFA/m² (lower in rural areas, more expensive in urban areas). There is also a registration fee and transfer duty. The fees for half a hectare in Bamako can equal $115,000, which even if it is one-tenth or one-twentieth of the cost in rural areas, is a very considerable amount of money for farmers. If there are no objections to the land claim and there are no other issues with the association, a land title can be obtained in 6-8 months. Commonly, however, the owner cannot afford to pay the land taxes, so more than five years elapse and they may owe significant amounts of back-taxes before finally obtaining permanent land title.

to move faster a « transportation stipend » can be paid. The payment of a transportation stipend is the norm but it’s an unofficial payment. With the payment the technical review takes a couple of weeks.

Each technical service writes a report which is compiled and submitted to the Prefet.

6.

Public hearing (Procès-verbal de l’arbre par l’arbre) • The Prefet sets a date for a public consultation (L’enquete

commodo et incommodo) to ensure that there are no other claims to the land.

• The meeting is advertised in the newspaper and on the radio, and posted at the Tribunal, Mayor’s Office, Sub-Prefet, and Prefet’s office. (There is a small fee to be paid for the advertisements).

• The meeting is attended by the Prefet, the village chief, the village councilors, the buyer and the seller, neighbors and others from the general public who are interested in attending.

• A report from the meeting is drafted. • There is a 30 day deadline to challenge the claim to the

land. If there are no objections, the Prefet issues the temporary title.

Included in previous

procedure Préfecture

Total 6 procedures 108 days No cost measured

99

Access to Property Registration Index (0-7) Note: This index is scored for titled land (titre foncière)


3 Comments

1. Is real property registration possible in every state/province? Yes

Yes, the land registry is decentralized to the regions. There is no national land registry – each region maintains its own registry.


The property registry is paper-based and applications to register need to be submitted in hard copy.


There is online information about how to transfer an already existing formal title from a seller to a buyer (See www.eregulation.mali.org). However, this occurs almost exclusively in urban centers. There is no information about how to obtain a temporary title (titre provisoire) which is a prerequisite to obtain a formal title to land held under customary rights. Hence information about the more common forms of rural transfers is not available on-line.

4. Are real property registration steps and timeframes clear? No

The steps are outlined in the Land Code (Code Domanial et Foncier) but the time it takes to process the application varies depending on the existing workloads and the level of informal payments.



7. Is quality of data in the land registry reliable, with few cases of dual or fake titles? No

The regional land registries are workable but there are instances of dual copies of title deeds, and the registry is not kept up to date. The fact that the land registry is not computerized makes it time-consuming to search the land registry, and it can take up to two weeks. Banks hire their own surveyors to survey the land before the bank accepts a title as collateral to ensure that the title is correct.

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Leasing Rural Land Index (0-9) Responses based on land leases in the Office du Niger region.16



Yes

45. Do formal entities have a de facto right to lease land? Yes


No

Most leased land in Mali is in the Office du Niger region, and the Office du Niger approves those leases. In other parts of the country, if the land is owned by a private entity no permission is needed. However, if it is government land, the government will have to approve the lease. For leases concerning more than 10 ha, the governor needs to approve the lease.

47. What is the statutory maximum duration, if any, for a lease of land? 99 years

The maximum number of years is 99 years for emphyteutic leases (leases specifying that the property must be improved). For other forms of leases, 50 years is the maximum.



There is no statutory maximum. In the Office du Niger region, leases of several thousands of hectares have been awarded.


No


Yes Subleasing is possible if the owner is in agreement.

51. Can a long-term (50+ years) leasehold interest in land be transferred to another formal entity? Yes



Yes

Emphyteutic leases and lease agreements to sell (bail promesse de vente) are registered in the land registry, other forms of leases are not. However, lease agreements to sell are not applicable in the Office du Niger.


Yes Emphyteutic leases can be mortgaged, but not other types of leases.

d. Do such mortgages occur in practice? No The banks are very hesitant to lend against a lease.

16 Most leased land in Mali is in the Office du Niger region.

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J. Types of agricultural collateral allowed by the legal and regulatory framework and accepted by financial institutions in practice.

K. Quality of existing collateral registries for movable collateral.

L. Strength of legal framework for warehouse receipts systems.


Types of Collateral

Allowed by Law

Used in Practice

Type of Charge

Is charge registered? Comments

1. Farm equipment Yes No - Yes

Farm equipment is not commonly accepted as collateral. The agricultural development bank BNDA accepts new equipment as collateral only if BNDA is financing its purchase. Equipment can be registered in the RCCM, but since it is unusual for banks to accept equipment as collateral, this is not common practice.

2. Crop in field Yes No - Yes

By law, personal property, tangible or intangible, may be pledged. Existing or future movable properties can also be pledged. In accordance with the OHADA Uniform Act Organizing Securities (Acte Uniforme portant Organisation des Suretés) (article 120 and the following articles), farm products can be used as a collateral and can be registered in the RCCM. A stock can be pledged without transferring it to the creditor if a court clerk (Greffier, who is in charge of the RCCM) issues a collateral inventory list (bordereau de gage de stocks). In practice, crop in the field is not used as collateral. However, sales contracts between a larger processor, a producer organization and a bank concerning crop still in the field is being used as collateral, notably in the cotton sector.

3. Crop in warehouse Yes Yes Fixed Yes

Crops in the warehouse can be used as collateral through the tierce detention system described in more details in Index 3 on warehouse receipt

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systems. However, tierce detention is primarily used for imported goods including input supply, and to a less degree domestic production. There are a few microfinance institutions that partner with farmer groups to finance postharvest storage (for temporal price arbitrage) using crops in the warehouse as collateral (warrantage). In this arrangement, two locks are put on the warehouse and all parties involved in the transaction need to be present to open the warehouse. It appears like NGOs are involved in facilitating these arrangements.

4. Livestock Yes No - Yes

Personal property may be pledged. Livestock is not specifically mentioned as a security in the OHADA Uniform Act Organizing Securities, but it could be pledged. In practice, livestock is not used as collateral as it is perceived as being too difficult to track. It is therefore not in practice registered in the RCCM.

5. Inventory Yes No - Yes

In general, inventory is not used as collateral. However, the agricultural bank BNDA is at a limited scale using the inventory as security to grant trusted wholesalers loans for their working capital. They can keep the stock but the bank checks in on a daily basis. It’s not a frequent practice but reserved for a small group of larger wholesalers with a good track record with the bank.

6. Patented plant variety Yes No -

OHADA Uniform Act Organizing Securities (article 156 and the following articles) provide for intellectual property rights to be used as collateral. However, in practice there is no market for securities in patented plant varieties as seeds are developed by the research institutions.

7. Futures contract

Law is silent No - Yes

There is no commodity exchange in Mali. Nevertheless, there is an annual grain fair that takes place in Segoú organized by the organization Afrique Verte where future contracts can be concluded. However, this occurs at a limited scale and is not an instrument the banks work with.

8. Accounts receivable Yes No - Yes

Banks don’t accept accounts receivable, but could take it into consideration when they evaluate their existing clients’ loan profile.

9. Buy/sell agreements Yes Yes Floating Yes

Buy/Sell agreements between larger businesses or tripartite agreements between the bank, farmer cooperatives and large well-structured buyers like CMDT, OPAM, or the WFP are accepted as securities. Contracts between private enterprises are also accepted if both parties are clients of the bank and in good standing with the bank. In this situation, they establish a three party transfer document (document de cession) specifying the

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Movables Collateral Registry Index (0-11) Responses are for the Collateral Registry at the Companies Registrar



Single Registre de Commerce et de Crédit Mobilier (RCCM)


Yes

The OHADA Uniform Act Organizing Securities regulates the registration of securities. The OHADA Act provides for non-possessory pledges (nantissement) where the collateral is registered in the RCCM but the lender does not take possession of the collateral. In practice equipment is rarely accepted as security, registration in the RCCM is therefore not a common practice. However, some contracts are registered in the RCCM and used as non-possessory pledges.


Yes


No

The registry is decentralized and kept by the Registrar at the commercial courts in Bamako, Mopti, and Kayes, as well as in other locations at the civil courts (Tribunal de Première Instance). According to OHADA regulation, the entries in the decentralized system should be sent to the Ministry of Justice (MoJ) in Bamako and the MoJ should send it to the Communal OHADA court (Cour Commune de Justice et d'Arbitrage) in Abidjan. However, the transmission of the RCCM entries to Bamako and Abidjan is not being implemented in Mali.


No The World Bank conducted in 2011 a study assessing what it would take to create an electronic data base for the RCCM, but it has not been implemented.

39. Can registration and searching in the movable collateral registry be performed online? No The RCCM is paper based.

40. Is data from the movable collateral registry reliable? Yes The RCCM is perceived to be reliable. Upon

registration a certificate and a receipt is issued. 41. Is real-time information from the movable

collateral registry widely accessible to the general public without any restrictions, including by those located in commercial centers outside of the capital?

Yes

The RCCM is decentralized and registrations are done at the court where the person lives, or for a company, where the company is registered. However, the fact that the system is not centralized does not pose much of a practical problem, as the

terms of the contract and that the payment will be deposited into a specific bank account.

10. Land and water rights Yes Yes Fixed Yes

Title deeds can be used and are the preferred type of collateral by the banks. However, as title deeds in rural areas are very unusual, it is very hard to use for agricultural lending unless the borrower has titled land in an urban center.

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search should be done locally. The major issue is that the system is not computerized and it takes a long term to search it.


No

Registration takes normally 1-2 days. The fee is not flat. Registration of an asset worth 3 million CFA ($ 6,300) costs about $235. The fee schedule is the following: a. 1 – 500,000 CFA – 3% b. 500,001 – 2,000,000 – 1.5% c. 2,000,001 – 6,000,000 – 0.75% d. More than 6,000,001 – 0.5%


No

The fee is 5,000 CFA (about $10). As the register is paper based it takes a long time to search, especially if the registration was not done recently. Depending on how far back the search need to go, it can take anywhere from 1-3+ weeks.


The OHADA Uniform Act provides priority to creditors based upon the order of registration in the RCCM. However, salary claims have priority over lenders with claims registered in the RCCM. See art. 226 of the OHADA Uniform Act Organizing Securities.


In Mali, there is no full-fledged warehouse receipt system in place. However there is a system referred to as tierce détention – a licensed third party holder – which has several similarities, but also a number of key differences from a warehouse receipt system. The Index below relates to tierce détention. Tierce détention is primarily used by large and well established processors, wholesalers or importers in Mali. Tierce détention is a three party agreement between an economic operator, the bank and the third party holder (tierce détenteur). Unlike a classical warehouse receipt system, where producers deposit their produce or commodities after the harvest, a typical situation use of tierce détention is that the bank pre-finances the importation of input or goods to Mali. The goods are stored in an agreed upon warehouse with two set of keys, one for the operator and one for the third party holder. The warehouse can only be opened when both parties are present. As the operator repays the bank a part of the loan, the bank instructs the third party holder to release an equivalent amount of goods from the warehouse to the operator. The third party holder confirms the release to the bank. Hence, the operator will get access to the goods after the repayment to the bank, which can be done in several installments. The third party holder is licensed. However, the warehouse is not licensed, so any warehouse may be used, such as the third party holder’s warehouse or the operator’s warehouse. Tierce détention receipts are not transferable and not negotiable. Although the goods stored in the warehouse are measured and identified (type of product, number of bags etc.), there is no regulation specifying the grades or standards that should be applied. The products are therefore not interchangeable. The exact same products that are being stored will be released.

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Yes

Tierce détention is regulated in three different laws and regulations: OHADA Uniform Act Organizing Securities; The Commercial Code (Loi 92-002 du 27 août 1992 portant Code de Commerce en République du Mali); Decision to create and regulate the third party holder profession (Arrêté n°07-0222/MIC-SG du 31 Janvier 2007 portant création et règlement de la profession de tiers détenteur).

a. If NO, are there any plans to draft a warehouse receipts law? No

The World Bank is planning to undertake a mapping exercise to assess mechanisms already in place, and to gauge the interest and feasibility of a warehouse receipt system.

b. In practice, are warehouse receipts used and accepted for the following types of goods?

Both agricultural

and industrial

goods

Tierce détention is primarily used for imported goods, including fertilizers. Local agricultural goods are to a more limited extent held in tierce détention.


No

Warehouses are not registered or licensed. There is no specific oversight over warehouses that are used for tierce détention. However, Arrêté n°07-0222/MIC-SG du 31 Janvier 2007 stipulates that the National Direction for Commerce and Concurrence (Direction Nationale du Commerce et de la Concurrance (DNCC) has the mandate to register and license the third party holders (tierce détenteur).

a. Is such entity private or public? N/A 44. Does the legal and regulatory framework


No Warehouses are not registered or licensed.


Yes

The operator needs to: 1) be registered at the RCCM as a trader 2) be the owner or a lease holder of a warehouse 3) hold the appropriate insurance policies 4) deposit a 50 million CFA guarantee at the Treasury.


No

a. Are such commodity standards and grading systems enforced effectively? N/A


No

48. Does the legal and regulatory framework provide for regular inspections by the regulating entity or licensed third-party

No The DNCC has the authority to inspect tierce détention operations, but there are no specifics about how often this should take place, and in practice the

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inspectors? DNCC does not inspect tierce détention.


No

There are no specific rules or procedures for handling agricultural goods in storage. The DNCC can sanction the third party holders (tierce détenteurs) that are not complying with applicable rules but in practice the DNCC provides little oversight of the operation of tierce détention.


Yes

The third party holder has the exclusive responsibility to maintain and conserve the goods. In addition, the third party holder has to hold an insurance policy covering the goods. (Arrêté n°07-0222/MIC-SG du 31 Janvier 2007).


No


No


Yes


a. Name and address of licensed warehouse operator Yes

b. Designation and grade of warehouse No c. License number of warehouse No The warehouse is not licensed. d. Name and address of depositor Yes e. Relationship between warehouse operator and depositor if not a strictly disinterested custodianship

No

f. Description and quality of goods Yes g. Whether goods are insured or not Yes h. Net weight of goods Yes

i. Other: [ ] Yes The loan amount that the tierce détention guarantee is for.


No

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M. Time, cost, and documents to export a widely-traded agricultural commodity.

N. Index on legal framework for phytosanitary certificates for export.

O. Time, cost, and documents to import hybrid seed.

P. Index on trade facilitation measures

Product Oilseeds (groundnuts, sesame, shea nuts)

Export Consignment


Value US$20,000 Point of Exit Tema Port Product Hybrid Maize Seed Import Consignment


Value US$20,000 Point of Entry Tema Port Company Private LLC, majority



Exporting an Agricultural Commodity Number of Documents, Time and Cost to Export Agricultural Goods


Time (days)

Cost (USD)



TOTAL 13 days $565

Documents to Export Commodity Receipt payment of consumables

Request to Export (Intention d’Exportation)


Certificate of Origin Customs Export Declaration (Declaration de produits d’Exportation) Commercial Invoice Packing List

Bill of Lading

TOTAL: 8 documents

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Importing Hybrid Seed Number of Documents, Time and Cost to Export Agricultural Goods





TOTAL 20 days $1,075

Documents to Import Hybrid Seed Import Permit

Request to Import (Intention d’Importation) Seed certification certificate (Certification du Produit) Phytosanitary Certificate

Pest List

Packing List

Commercial Invoice

Bill of Lading

Cargo Release Order (Bon a Enlever)

Insurance Certificate

Customs Import Declaration

ECOWAS road transit document (Carnet TRIE)

TOTAL: 12 documents

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Some documents

Bill of lading, commercial invoice, Attestation de verification (from BIVAC, for applicable goods), certificate of insurance, certificate of origin.


Some documents Customs Import/Export Declaration only.


Yes

b. If YES, is the risk management system electronic? Yes

Malian Customs currently has a computer information system, SYDONIA++ (Système Douanier Automatique, or AYSCUDA in English)


No


No

22. Are consignments of imported seed allowed to enter Mali (and remain in storage) while samples undergo laboratory analysis?

Yes

At the border, only a document check is done on an imported seed shipment. The seed arrives to its final destination before samples are taken by regional agricultural directorate officers for laboratory testing. In practice, even this may not occur.

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Phytosanitary Index (0-9)


4 Comments

19. Is Mali a signatory of the International Plant Protection Convention (IPPC)? Yes https://www.ippc.int/countries/mali


Yes Legislative and Control Phytosanitary Division of the DNA (Division Législation et Contrôle Phytosanitaire, Direction Nationale de l’Agriculture, DNA).


No


No

23. Can exporters request a phytosanitary certificate on the internet? No


No


g. The exporter’s warehouse or storage facility? Yes

Upon request from the district-level Regional Direction of Agriculture (Direction Regionale d’Agriculture).

h. Bonded warehouses? No i. All points of exit from Mali (including

land, air, and sea ports)? No


Yes


No

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J. Index on legal framework for contract farming. K. Index on system for establishing public grades

and standards for a widely-traded staple crop. L. Index on access to expedited or alternative





Yes

There is freedom of contract In accordance with art. 53 of Loi N° 87-31/ANRM du 29 Août 1987 fixant le régime général des obligations au Mali. OHADA is currently developing a uniform contract law. The new law will harmonizes contract laws in all the member states in accordance with international best practices.


No Tripartite contractual arrangements take place in the agricultural sector.

24. Are the parties to a contract freely allowed to establish prices for payment? Yes

The price setting is free for all goods and services. However, in the case of a crisis situation or excessive price increases in the market, the Government may, by decree of the Council of Ministers, regulate prices. In practice, certain goods including sugar and rice can be regulated during the month of Ramadan, but this has reportedly not happened in the last couple of years.


Yes

Force majeure is recognized as a reason for non-performance in accordance with la Loi fixant le régime général des obligations au Mali and the OHADA Uniform Act to General Commercial Law. For instance, following the 2012 coup in Mali, force majeure was invoked as a reason for non-performance.

26. Does the legal framework recognize the right of recovery of damages in the case of breach of contract and equitable remedies such as

Yes The Loi fixant le régime général des obligations au Mali and the OHADA Uniform Act relating to General Commercial Law recognizes this right.

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specific performance and injunctions?


Yes

According to the Loi fixant le régime général des obligations au Mali contracts concluded as a result of fraud or extortion involving violence can be rendered void.


Yes Yes, a special expedited procedure referred to as “procédure en référée ou arbitrage” can be invoked for perishable goods.

Grades and Standards Index (0-12) This index is scored for rice.



No

Law No. 92-013/AN-RM of 17 September 1992 on the establishment of a system of National Standardization and Quality Control (Système National de Normalisation et de Contrôle de Qualité) provides the legal framework for grades and standards in Mali. There are three institutions involved in grades and standards, but there is overlap in their mandates and their relationships and hierarchy are not clear. The Malian Agency for Standardizations and quality (Agence Malieene de Normalization et de promotion de la Qualité, AMANORM) under the Ministry of Industry coordinates the government’s normalization efforts and supports businesses seeking certification. The National Directorate for Agriculture (Direction Nationale de l’Agriculture, DNA) provides technical input in the development of legislation concerning grades and standards of agricultural products. The National agency for standardizations and food safety (L’Agence Nationale de la Sécurité Sanitaire des Aliments, ANSSA) under the Ministry of Health supports the development of grades and standards and legislation related to food standards.


Yes

Norms are voluntary unless a specific decision (ârret) has been issued. There is a specification for rice (PMN-01-03/003: 2 000-Rév.1-2007); however the application decisions making the specification mandatory are obsolete and need to be updated (Decision N°347/MP from 03/06/65 –Paddy) and (Decision N°573/S.E.A.E.F from 29/06. 1962 for rice). However, mandatory grades and standards are being

113


developed. ]


Yes Yes, the rice specification for rice (PMN-01-03/003: 2 000-Rév.1-2007) is based upon the Codex Alimentarius.


No

The DNA has inspectors at the regional level and the cercle level. However, there are no resources allocated for inspections and the inspectors are therefore not very motivated. The domestic control is therefore weak and sporadic.


No

The institutional mandate and the issues are the same as for the development and management of grades and standards pertaining to quality/trade discussed above.


No There is a norm for contamination of cereals, but it is not mandatory.


N/A Not applicable (See Question 2).


N/A Not applicable (See Question 2).


Yes

Both ANSSA and AMANORM have technical working committees including the private sector and research institutions. ANSSA coordinates committees for the Codex (international standards) and AMANORM for the development of national standards. DNA is currently chairing AMANORM’s technical committee for agricultural products.


No public

outreach, public

comment period

AMANORM has introduced a public comment period, but as AMANORM is a new institution, this is not yet a well-known practice.


No, not available

There are a number of different laboratories to conduct tests, but there is a lack of adequate equipment to accurately measure and test agricultural commodities. The National Health Laboratory (Laboratoire National de la Santé) was recently ISO-accredited, but the lab is primarily used for testing plant health and only to a limited extent food products. Tests that require greater precision

114


including testing of virus are sent to laboratories in Europe or the USA.

a. Are there ISO accredited laboratories in Mali? Yes Laboratoire National de la Santé was ISO accredited

in 2013.


There are uniform standards for measurements, but the controls are weak. The National Direction of Competition (la Direction Nationale du Commerce et de la Concurrence, DNCC) controls uniformity in measuring units, notably scales, but there are few inspectors. The DNCC is trying to address this issue and the AMANORM would like to take over this function from the DNCC.


Yes




Yes

There are commercial courts in Bamako, Mopti and Kayes. The procedures for commercial cases takes about the same time as other civil cases, but the main advantage of bringing a case to commercial court is that the judge is specialized in commercial law. There are not as many cases filed in commercial court as in the trial courts so it could be faster to get to a hearing. The hearings can be conducted and a decision made in as little as one to two months. However, due to the lack of personnel, it can take another 6-12 months after the hearing for the judge to write the decision. About fifty new judges have been trained in order to mitigate this problem, but due to the lack of funds the judiciary has not been able to hire the newly trained judges. As a result of the shortage of personnel, the commercial courts are not systematically faster.


Yes

This index is scored based on arbitration through CECAM. The Conciliation and Arbitration Center of Mali (Centre de Conciliation et d’Arbitrage du Mali, CECAM), established in 2004, has had a slow start in Mali. The relatively high cost of arbitration, the lack of information and visibility of the center, some concerns with the organization’s structure of the center and the perceived long time it takes to adjudicate cases are cited as issues with the center. The center commissioned recently an assessment to evaluate how the center can be strengthened. The center is currently training mediators to mediate

115


commercial disputes, which is a service that previously has not been available. Legal experts were of the opinion that arbitration at the OHADA arbitration center in Abidjan (Cour Commune de Justice et d'Arbitrage) or the arbitration center in Paris are more neutral and are therefore more advantageous.


Yes

CECAM adheres to the OHADA Uniform Act on Arbitration (1999), which governs arbitration in the OHADA member states. Under the regulation, the parties are free to agree upon what laws should be applied. Mali has also ratified the New York Arbitration Convention.


Yes

There is a 50,000 CFA fee to start a case at CECAM. The fee schedule for the administrative fee and an arbitrator fee(s) is dependent on the disputed amount. The parties can choose if they want to have one arbitrator or three arbitrators. For arbitration concerning a dispute of 5 million CFA- to 20 million CFA, the administrative fee is 1% and the arbitrator fee is 2% per arbitrator.

a. Are the costs entailed typically less than that of the traditional court system? No


No

CECAM does not have a minimum threshold. For the commercial court there is no minimum amount, but disputes concerning less than 5 million CFA cannot be appealed.


N/A


Yes

Arbitration takes typically 3-6 months, but does not exceed 6 months. The commercial court could be faster, but typically is not as it is unpredictable how long it will take the judge to write the decision.

60. Are expedited or alternative mechanisms readily available outside of Bamako? No

CECAM is only based in Bamako and does not currently have a presence outside the capital. However, there are commercial courts in Mopti and Kayes.


Yes

In accordance with the OHADA Uniform Act on Arbitration, the trial courts (Tribunal de Première Instance) can issue an execution decision for rulings by CECAM.

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I. Time, cost, and procedures for business registration and licensing of a mid-sized staple grain farm. Requirements may include national or local trading licenses, chemical storage requirements, workplace or employee registration, environmental permits, and company registration.

J. Index on access to business registration information.

Case Study Farm Crop Maize Farm size 50 hectares Location Eastern Region Legal Form Sole Proprietorship Annual Revenue USD 317,647 Land tenure 50 year lease Market Farm gate, local market

Nepal

Procedures, Time, and Cost to Start-up a 50-hectare Maize Farm17


Cost (US$)18 Agency

1 Company Registration – Sole Proprietorship A sole proprietorship with an annual turnover of less than NPR 50 million can register as a small business with the DCSI. Sole proprietorships under the DCSI can register charges. DCSI has offices located in most districts. It is possible to register a company with minimal capital – as little as NPR 1,000 (US$15). The Nepali government has tax incentives for small businesses. Companies registered at the DCSI with less than NPR 1 million need not submit audit reports to the tax authorities (all companies at the Companies Registry must do so). Sole proprietorships at the DCSI pay no corporate tax (flat rate of 25% for all Companies), only individual income tax. Companies wishing to register with the DCSI must provide citizenship certificate, copy of land agreement, and a 4-5 page business scheme. Nominal annual renewal fees apply.

1

225 depends on asset capital level

Department of Cottage and Small Industries (DCSI)

17 Data highlighted in yellow is based on incomplete/unconfirmed data 18 Exchange rates as of June 2012 (88.99 NPR per US$). Costs are rounded to the nearest dollar.

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2 Permanent Account Number (PAN) Every business in Nepal must obtain a tax identification number (PAN) for income tax and VAT purposes. There are three types of applications for PAN depending on the taxpayer type (Individual; company: partnership, LLC, corporation, etc.; and Tax Deduction at Source). Proprietors, partners, or CEOs of the concerned firm must apply in person or send a representative to the Inland Revenue Department office with power of attorney. In addition to the application form, the proprietor must submit citizenship certificate, two passport photos, and the business registration certificate. PAN has an annual fee of NPR 3,000. Information, documents, and filing is available online at http://www.ird.gov.np

2 0 Inland Revenue Department

3 VAT Registration Primary producers are exempt from VAT. Large farms, however, would register for VAT in order to get refunds for agricultural inputs including live animals, machinery, fertilizer, seed, and pesticide. Current threshold for VAT registration is NPR 2 million, and firms with annual turnover below the threshold can choose to register voluntarily.

1 0 Inland Revenue Department

4 Register for Employee Provident Fund Provident Fund contributions apply to firms with 10 or more permanent staff. According to the law employers should deduct 10% from the employee’s basic salary per month and add 10% from the company as an old-age pension contribution. The employer should deposit pension contributions in any commercial bank or with the Employees Provident Fund, an autonomous national pension plan.

2-3 0 Employees Provident

Fund


118



Comments


24. Are registration documentation and information on fees available online? No

25. Is registration possible in every state/province? Yes 26. Are registration steps the same regardless of

business size (measured by size of workforce or revenue)? No

Depending on the size and type of company, firms may choose to register with the DCSI or the Companies Registry. Fees vary based on level of authorized capital. In addition, firms with 10 or more employees fall under the labor law, which may trigger additional compliance procedures.

27. Are registration steps the same regardless of the nationality of ownership? No

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Obtaining Inputs: Seed Strong seed and fertilizer regulations and institutions promote farmers’ access to high-quality seed while making the licensing process for suppliers efficient and transparent. Competition is key: more suppliers and an extensive distribution network ensure a greater supply of affordable, quality seed. Overly burdensome regulations can stifle the sector by discouraging new entrants and creating incentives for agro-dealers to operate informally. Indicators:

I. Time, cost, and procedures to obtain operational licenses for a seed supplier. Requirements may include import license, seed dealer license, license for storage facilities, national or local trading licenses, and inspections.

J. Time, cost, and procedures to register a new proprietary seed variety.



Type of Seed Hybrid Maize Location Kathmandu Ownership Domestic, non-state-owned

enterprise


No. Procedure Time (days) Cost (US$) Agency 1 Recommendation for Seed Business License

Before applying for a seed business license, companies must obtain recommendation from their local District Agricultural Office. Note: There is no import license for seed suppliers in Nepal. However, importers must obtain an import permit issued by the National Plant Quarantine Program (NPQP) on a per-shipment basis (This procedure included in the "Import of Hybrid Seed" section of the Trading Agricultural Goods survey). To obtain an import permit, importers must first obtain a recommendation letter from Seed Quality Control Center (SQCC) of the Department of Agriculture (DOA), to be submitted to the NPQP which grants permission to import. The company must provide an application form with company certificate, Tax Identification Number (PAN) certificate, pro forma invoice, and agreement letter from international seed supplier. Applicable laws Plant Protection Act, 2064 (2007), Section 7 to 11; Plant Protection Rule 2066 (2010), Rule 5 to 7. The permit is valid for up to three months for one shipment of seed. The recommendation to import from SQCC and the import permit take two days and cost NPR 200. http://licenseportal.nitc.gov.np/index.php/browse_license/license

1 0 Department of

Agriculture (DOA)

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No. Procedure Time (days) Cost (US$) Agency 1 Application for New Variety Release

Importer must apply to the SQCC for permission to import a small sample (amount varies by crop) of a new seed variety for research purposes. The seed supplier provides a sample of the new variety to SQCC for evaluations. They also submit company registration certificate, PAN certificate, and any addition documents of the seed's prior use in other countries and intended use in Nepal.

7-31 depending on seed

inspection time

1

Seed Quality Control Center (SQCC)

2 Recommendation for Field Trials SQCC reviews the application and recommends the variety for field tests. Time to approve depends on the time until the next cropping cycle and the availability of the Nepal Agricultural Research Council (NARC) research stations to conduct trials.

30 0 Technical

Committee, SQCC

3 Field Trials Variety performance evaluation trial fees include two seasons of trial data from testing in an average of three locations (the variety must be tested in the agro-ecological zones where it is to be sold). NARC coordinates and conducts the trials.

730 2,248 for up to five varieties of one cereal crop

National Agricultural Research Council (NARC)

_details/185

2 Obtain Seed Business License Application includes firm registration certificate, PAN Certificate, receipt of fee payment, recommendation from District Agricultural Office, proof of proprietor’s citizenship and two passport photos. SQCC provides mandatory one day training for seed dealers in Kathmandu, after which applicants must pass an exam to be duly registered. SQCC conducts regular inspections of seed dealers. The Seed Business License is valid for two years and renewable at NPR 200. http://licenseportal.nitc.gov.np/index.php/browse_license/license_details/239

30 500 SQCC, DOA


121

The field trial procedures currently apply to new varieties of cereal crops. Registration regulations for vegetable varieties are currently under review. Seed companies have requested a less-intensive registration process for vegetable seeds compared to cereal crops. Current practice in lieu of any clear regulations involves companies undertaking proprietary field testing for vegetable varieties with oversight from district offices of the Department of Agriculture (DOA). The typical process costs roughly NPR 65,000 and includes: • Plant sample seed with farmers for an average of one season in 1-2 locations (2-6 month season depending on crop) • DOA oversight with two inspections during the season – at flowering and at harvest • DOA submits efficacy report to SQCC (1 week, free) • Recommendation by SQCC and Approval by National Seed Board (see below) Companies report that due to the lack of a regulatory framework for vegetable variety registration, the National Seed Board has not released any new vegetable varieties in the past year.

4 Technical Committee Review Technical Committee comprised of agronomists, pathologists, entomologists, and other scientists evaluates field trial results and recommends release to the National Seed Board.

60 0 Technical

Committee, SQCC

5 Variety Approval The National Seed Board, chaired by the Secretary of MOAD, is comprised of scientists and other stakeholders. The National Seed Board typically meets twice a year depending on applications and crop cycles. However, the National Seed Board apparently has not met or approved new varieties in the past year.

60, highly variable 0

National Seed Board,


Development (MOAD)

6 Gazette Notification After the variety is released it must be published in the national Gazette, which must be reviewed by the Ministry of Law and may take over a year. As per regulations seed companies may not sell a new variety until it has been listed in the national Gazette, and companies report that the SQCC will not issue import permits without Gazette notification. The Seed Entrepreneurs Association has been lobbying on behalf of seed companies to request the ability to begin sales immediately upon variety approval.

365, highly variable 0 Department

of Printing

Total 6 procedures 1,264 days US$2,249


registration accept testing data from the N/A Data for this index was not collected for this country

122

breeder?


N/A

a. If YES, with which country(s) and what is the facilitated process? N/A

15. Is Nepal party to a regional agreement with respect to common procedures for variety testing, registration, and/or release that is effectively implemented in practice?

N/A


123

Obtaining Inputs: Fertilizer Strong seed and fertilizer regulations and institutions promote farmers’ access to high-quality fertilizer while making the licensing process for suppliers efficient and transparent. Competition is key: more suppliers and an extensive distribution network ensure a greater supply of affordable, quality fertilizer. Overly burdensome regulations can stifle the sector by discouraging new entrants and creating incentives for agro-dealers to operate informally. Indicators:

I. Time, cost, and procedures to obtain operational licenses for a fertilizer supplier. Requirements may include import license, fertilizer dealer license, licenses for storage facilities, environmental permit, national or local trading licenses, and inspections.

J. Index on the legal and institutional framework for the fertilizer sector.




Location Kathmandu Ownership Domestic, non-state-owned

enterprise



Agency

1 Fertilizer Dealer License Per Chemical Fertilizer Directive, 2057. Fertilizer companies who sell to farmers must be licensed by a District Agricultural Officer from the Ministry of Agriculture Development (MOAD). This license does not apply to importers or wholesale sales by importers. Time and cost are as listed on Nepal’s Business License Portal. http://licenseportal.nitc.gov.np/index.php/browse_license/license_details/259 There is no license or permit system for fertilizer import. Procedurally, a fertilizer company need only open a Letter of Credit (L/C) to initiate the import process. Nepal Customs treats the L/C as an import permit. In practice there is a large shortage of fertilizer in Nepal – the government subsidizes roughly 100,000 tons of fertilizer but market demand is estimated to be closer to 700,000 tons per year. Most fertilizer imports unofficially cross the border from India. MOAD monitors all chemical fertilizer imports. Upon arrival at Nepal Customs, every chemical fertilizer shipment must be

7 1


Development (MOAD)

124



Comments

1. Is there a fertilizer law(s) and regulations?

Yes

Chemical Fertilizer Control Order, 2055 (1999) per Essential Commodities Act (1961), and Chemical Fertilizer Directive, 2057 (2001). There is also a National Fertilizer Policy (2002).


m. Set truth-in-labeling guidelines? (e.g. fertilizer bag labels must includes Nepal’s official language(s), net weight or volume, “guaranteed analysis” of minimum levels of nutrients claimed, directions for use, and health and safety precautions)

Yes

There are certain relevant truth-in-labeling guidelines, e.g. fertilizer bags must carry importing company’s details (this is in Nepali language), gross and net weight markings, minimum levels of nutrients claimed, country of origin, year of manufacture, lot no., manufacturer/supplier details, directions of use (if any), etc.

n. Prohibit the sale of open, mislabeled, or adulterated bags of fertilizer?

Yes

The chemical fertilizer regulation 2057 prohibits the sale of bags not labeled correctly or if adulterated.

o. Establish rules for the accreditation of third-party certification of fertilizer quality? (e.g. an accredited private laboratory network) Yes

Chemical fertilizer regulation has specified seven government laboratories where chemical fertilizer can be tested. Furthermore, as per secretary-level decision dated 2069/10/26, the government has appointed two companies to survey all chemical fertilizers entering Nepal: Astha Scientific Research Service (Kathmandu); and GCT Scientific Research and Development Lab (Parsa).


Yes Ministry of Agricultural Development (MOAD).


inspected by a company appointed by MOAD. Inspections cost NPR 15-50 per ton depending on the inspection company. The inspector verifies both fertilizer quality and quantity through a physical inspection of the consignment. Samples are taken and sent to a laboratory for testing, which takes 3-4 days. In the meantime, the shipment clears customs and can proceed to Kathmandu. The importer is not allowed to sell the fertilizer until MOAD approves the inspection report. For organic fertilizer, no inspections are necessary. Importers of organic fertilizer note that they must pay a 20% duty on imports, while chemical fertilizers enter duty-free. There is no warehousing or storage license for fertilizer. The Fertilizer Control Order sets no specifications for warehousing or storage. Inspections and sampling do occur periodically.

Total 1 procedure 7 days US$1

125

a. Fertilizer production and storage facilities?

Yes

Nepal does not have its own production facility for chemical fertilizers, however, MOAD has the mandate to inspect the stored fertilizers and make corrective actions, if any.


Yes

MOAD has the mandate to inspect fertilizer at the point of sale and make recommendations for punitive actions on the basis of the samples collected as well as on any other misrepresentation of the required regulations, if any. Inspections are conducted by a District Agricultural officer and/ or officers appointed by Ministry of Agriculture (if required).


Yes The regulatory body has the authority to collect samples and conduct laboratory analysis to measure nutrient content of the chemical fertilizer.


Yes

The Chemical Fertilizer Control Act 2055 (Annexure 9) has set guidelines for the collection of samples and the inspectors must strictly follow these guidelines A.1 Samples must not be collected from where there is sunlight or water. A.2 The sampling instrument must be clean and dry A.3 The samples collected and the sample bag should also be free from foreign elements A.4 The samples must be from collected by mixing the fertilizer in the bags properly. A.5 The samples collected must a minimum of 400 grams, sealed and sent to approved laboratory along with annexure 10 (details of samples collected, sample no., etc.) A.6 The sample must be labeled correctly giving details of type, brand, seller/manufacturer/importer as well as name and details of inspector.


No The Ministry of Agricultural Development (MOAD) issues a Dealer License. http://licenseportal.gov.np

7. Is there a government monopoly or major public sector role in procurement, importation, or distribution of fertilizer? Yes

The government issues tenders to procure fertilizer through the government-owned Agriculture Inputs Company Ltd. (AICL). The distribution of subsidized chemical fertilizer is handled by AICL and the Salt Trading Corporation Limited. Government-subsidized fertilizer creates a de facto monopoly in certain products such as Urea, DAP, and potash.

126


M. Time, cost, and procedures to transfer farmland. Requirements may include cadastral survey, title and encumbrances search, valuation and inspection, government consent to transfer, stamp duty and transfer tax, and registration of deed of sale.

N. Index on access to property registration information.

O. Index on legal framework for leasing farmland, including customary land.


LLCs Farm size 50 hectares Purchase Price US$ 26,404 Location Eastern Region Land Tenure Titled land

A.

B. C.



Cost (US$) Agency

1

Confirm title of Seller Land cannot be registered/transferred without confirmation by the Seller that he has duly maintained his right/title over the land and has paid the regular land revenue to the government (Country Code Section 17 Chapter on Registration). The Buyer cannot apply to obtain copies of the official records of the said land, so must get such official records from the Seller who can apply for the same (verification of ownership title, number of plots and their codes, topographical maps of the land being transacted). Fees include cost of photocopying or map printing (ex. NPR 10 stamp in application, NPR 2 per page). Facilitation fees are common.

1-2 4 Land Revenue Office (LRO)

2

Obtain verification letter and other certificates The Seller must go to the VDC to certify the boundaries of the land (char kila) and what types of roads and buildings are on the land (ghar bato), as well as to obtain verification that land tax has been duly paid. The Seller receives a verification letter from the VDC, the costs for which vary depending on the particular VDC’s rules and the size and types of improvements on the land. For the case study farm, estimated costs are NPR 3,000 for road and NPR 5,000 for house.

1-2 90 Village Development Committee (VDC)

127



3 Comments

1. Is real property registration possible in every state/province? Yes

National Code (Muluki Ain) Mahal 21. But it can be a lengthier process if done outside the district level.


The land records of Nepal have not been computerized.


Some information is available at the website of the Ministry of Land Reforms, but this information would not be enough for such a transaction.

4. Are real property registration steps and timeframes clear? Yes National Code (Muluki Ain) Mahal 21. Timeframes

may be less clear.

5. Are real property registration steps the same regardless of property size? Yes National Code (Muluki Ain) Mahal 21.

3

Submit application for transfer When buying or selling land, a transfer deed must be drafted in the form provided by the LRO. An application is then submitted to the LRO that includes the following: citizenship certificates of Buyer and Seller, land ownership certificate, tax clearance certificate from VDC, verification letter from VDC, and documents showing the dimensions of the land. The LRO uses the information contained in the VDC verification letter to determine the land valuation, based on a set schedule with values for different types of roads and buildings, and checks its records for encumbrances on the land. A 2.5% registration fee is then applied to the LRO’s land valuation if it is above the consideration indicated in the sale contract.

3-4 0 LRO

4

Pay registration fee The Buyer goes to the bank to pay the registration fee, and obtains a bank voucher which is submitted to the LRO. 1

630 (2.5% of consideration

or land valuation -whichever

higher)

Bank

5

Effectuate transfer deed Both Seller and Buyer or their representatives must be physically present in the LRO to confirm that they fully comprehend and are willingly entering into the transaction. Once payment has been made, LRO staff have confirmed that all formalities are in order, and the chief of the LRO puts the seal on and signs the deed, the deal is done. Then, the LRO gives the accordingly modified land ownership certificate to the Buyer. The Seller has to surrender all documents mentioned in Procedure 1 to the Buyer.

1-2 0

LRO

Total 5 procedures 9 days USD $724

128

6. Are real property registration steps the same regardless of the nationality of ownership? No Foreigners cannot purchase land in Nepal (Section

2 of Country Code Chapter on Others).

7. Is quality of data in the land registry reliable, with few cases of dual or fake titles? No

Land registry data is not completely reliable, as the records are not in good physical shape and are not always accurate due to old survey data.

Leasing Rural Land Index (0-9) Responses Based on Titled Land. Privately owned land (raikar land) is the most common form of landholding.



Yes

As per, the Companies Act, 2063 (2006) Sec 7(2). Subject to this Act, a company, like an individual, may acquire, hold, sell, dispose of or otherwise deal with, any movable or immovable property.



No

For freehold property, no approval is required. For leasehold or any authoritative property holder prior approval required from original lessor or proper authority.



No specific provision regarding time frame. The duration of the lease depends on the contract. Government-owned lands usually have fixed lease durations while it is not so for privately owned land.



As per the Land Reform Act 1964, there is specified limit for land ownership in Tarai (Plan land) region, Kathmandu valley, and Hill region. But the Act has not restricted the maximum amount of land for lease hold.


No


No There are no statutory restrictions but the leaseholder will only have the right to subdivide, sublease, or rent the land if it is specified in the contract.


Yes There are no statutory restrictions. Can be sublet only if permitted by the lease agreement.



Yes

The lease agreement, like any other agreement, may be registered at the land registry office by paying a fee of 1%. Registration of the agreement is for records. This is not commonly done in practice.


No

However, the legal framework allows the registered lease to be assigned (note: not mortgaged) to the bank as security. If specified in the agreement, the bank may re-assign such lease to a third party if the borrower defaults.

e. Do such mortgages occur in practice? N/A

129


M. Types of agricultural collateral allowed by the legal and regulatory framework and accepted by financial institutions in practice.

N. Quality of existing collateral registries for movable collateral.

O. Strength of legal framework for warehouse receipts systems.

Strength of Legal Right Index (0-10), Index Score: 6

Types of Collateral

Allowed by Law

Comments

1. Farm equipment Yes

Such collateral is allowed as per Sections 34 and 35 of the Secured Transaction Act 2006 (“STA”). However, regulations under the STA have yet to be issued and a registry established. Equipment such as tractors, milling equipment, and dryers are accepted as collateral in general banking transactions (Section 47 (1) (g) of Banking and Financial Institution Act, 2006 (“BAFIA”)) and such assets can be used for collateral purpose via a contractual pledge on all movables (hypothecated). However, no priority is provided.

2. Crop in field Yes Same as above. Under the STA, farm products and other movables assets can be used as collateral, but cannot be registered until the STA comes into full force. This type of security is rarely used in practice.

3. Crop in warehouse Yes Same as above. In practice, this type of security is hypothecated.

4. Livestock Yes Same as above. There is little practice of taking this type of security in Nepal.

5. Inventory Yes Same as above. In practice, this type of security is hypothecated.


Law is silent

Such collateral is not used in practice.

7. Futures contract

Law is silent Such collateral is not used in practice.


Law is silent

Assignment of receivables happens sometimes in practice. It remains to be seen how courts will interpret disputes regarding this type of security.


Law is silent Very rare except in exceptional cases.

130




Multiple registries

A movables registry is supposed to exist under the Secured Transactions Act 2006 (“STA”); however, it is yet to be established. As such, such assets can be used for collateral purposes, but do not provide priority. Charges over land and buildings are registered in the Land Revenue Offices (with specifications on class of lien) at District level, charges on vehicles are registered in the Transportation Management Office at Zonal level, and companies are registered in the Office of the Company Registrar (two offices located in Kathmandu and Lalitpur). A registry for movable assets does not exist yet.


No Movables cannot be registered since the registry under the STA is yet to be established.


No

N/A for movables registry. Sole proprietors, both those registered as companies as well as small cottage industries, can register charges on land and vehicles the same as other debtors.


No

N/A for movables registry. Land Revenue Office and Transportation Management Office records cannot be searched by name or company without going to each district/regional branch. Companies Registrar is centralized.


No N/A for movables registry. Land Revenue Office and Transportation Management Office records are all physical files.

50. Can registration and searching in the movable collateral registry be performed online? No

N/A for movables registry. Land Revenue Office and Transportation Management Office records cannot be searched online.

51. Is data from the movable collateral registry reliable? No

N/A for movables registry. Land Revenue Office and Transportation Management Office records are usually reliable.


No

N/A for movables registry. Land Revenue Office and Transportation Management Office records are generally up to date, though Land Revenue Office records can only be searched by the landowner.

10. Land and water rights Yes Land is widely used as collateral through mortgages in the Land Revenue Office. Water

rights are not used.

131


No N/A for movables registry. Land Revenue Office and Transportation Management Office have reasonable registration times and costs.


No N/A for movables registry. Land Revenue Office and Transportation Management Office have reasonable registration times and costs.

55. Does the secured lending system provide for priority based on order of filing? No When the registry is established under the STA,

priority based on order of filing will be provided. Warehouse Receipts System Index

Question Index

Score: 0 Comments


No


a. Is such entity private or public? 58. Does the legal and regulatory framework




a. Are such commodity standards and grading systems enforced effectively?





65. Does the legal and regulatory framework specifically recognize warehouse receipts as a document of title and a security instrument that is negotiable, transferable, and subject to

132

encumbrance?




a. Name and address of licensed warehouse operator

b. Designation and grade of warehouse c. License number of warehouse d. Name and address of depositor e. Relationship between warehouse operator and depositor if not a strictly disinterested custodianship

f. Description and quality of goods g. Whether goods are insured or not h. Net weight of goods


133


Q. Time, cost, and documents to export a widely-traded agricultural commodity.

R. Index on legal framework for phytosanitary certificates for export.

S. Time, cost, and documents to import hybrid seed.

T. Index on trade facilitation measures

Product Pulses and grains Export Consignment


Value US$20,000 Point of Exit Kolkata Port, India via

Birgunj or Biratnagar Post

Product Hybrid Maize Seed Import Consignment


Value US$20,000 Point of Entry Kolkata Port, India via

Birgunj or Biratnagar Post

Company Private LLC, majority domestically-owned, with 40 employees




Time (days)

Cost (US$)

Licenses and Documents Preparation 4 $ 184

Customs Clearance and Inspection 5 $ 850

TOTAL 9 days $1,034

Documents to Export Commodity Customs Export Declaration

Commercial Invoice

Packing List

Certificate of Origin or GSP Form A Bill of Entry

Phytosanitary Certificate Copy of L/C or Advance Payment Certificate

Bill of Lading

Customs Transit Document

Cargo Release Order

TOTAL: 10 documents

134



Time (days) Cost (US$)


Customs Clearance and Inspection 8 $ 625

TOTAL 16 days $ 751

Documents to Import Hybrid Seed Recommendation for Import

Import Permit


Cargo Release Order

Commercial Invoice

Packing List

Bill of Lading Customs Import Declaration

Letter of Credit or TT (Telex Transfer)


Insurance Policy

TOTAL: 11 documents

135





No documents

Documents can be submitted through the ASYCUDA system, but not in advance of arrival.


No documents

Documents can be submitted electronically but must still be printed out and submitted in hard copy to be reviewed by Customs.


No

There is a risk management system in theory, with red/yellow/green channels, but in practice risk management techniques are not applied and the vast majority of shipments are subject to physical inspection.

c. If YES, is the risk management system electronic? N/A


No

Nepal customs law provides for customs procedures such as post-clearance audit and an authorized economic operator program. However, a recent USAID-EAT assessment in 2013 found that these systems are not yet in place.


No

28. Are consignments of imported seed allowed to enter Nepal (and remain in storage) while samples undergo laboratory analysis?

Yes

Can be done with permission of the Nepal Plant Quarantine Unit. The importer provides a sample to Plant Quarantine once the shipment arrives to the warehouse in Kathmandu.


2

Comments

28. Is Nepal a signatory of the International Plant Protection Convention (IPPC)? Yes https://www.ippc.int/countries/nepal


Yes Per Nepal Plant Protection Act (2007) and Rules (2010).


No

31. Does the NPPO provide information on obtaining a phytosanitary certificate for export (e.g. documents and fee

No

136

schedules for sample collection, testing, and issuing the certificate)?



No


j. The exporter’s warehouse or storage facility? No

k. Bonded warehouses? No l. All points of exit from Nepal

(including land, air, and sea ports)? No


No Yes by law but not in practice.


No

137


M. Index on legal framework for contract farming. N. Index on system for establishing public grades

and standards for a widely-traded staple crop. O. Index on access to expedited or alternative





Yes Contract Act 2000, Section 4. With the exception of statutory tenants covered by the Land Act 1961 whose rights are not based on any contract.


No There are no obstacles to entering into a tripartite contract. (Contract Act 2000, Section 4).

31. Are the parties to a contract freely allowed to establish prices for payment? Yes It depends on goods. Agricultural products are OK.


Yes Section 79 of Contract Act, 2000 specifies force majeure.


Yes Contract Act, 2000 allows for recovery of damages.


Yes There is a one year limitation period to void a voidable contract.


No

There is no expedited process. The seller may sell the goods to a third party if the prior counterparty refuses to purchase, and may claim the profit lost as damages.

138

Grades and Standards Index (0-9) This index is scored for tea.



No Governed by the international tea market.


Yes

Yes, industry standards. The grades and standards are based on quantitative and qualitative attributes, governed respectively by both the tea industry and by buyers.


N/A International buyers usually check these at their own independent labs following the standards of their own respective countries.


No No government grades and standards.


Yes Phytosanitary certificate by the Food Control lab under the Government of Nepal


Yes As per Government of Nepal standards


Yes

By meeting international food safety management standards (ISO 22000:2005). Additionally, producers can be certified organic to international specs (ie. “USDA Organic”).


No


No


No public

outreach

139



private labs

a. Are there ISO accredited laboratories in Nepal? No



Yes Yes, for tea.




Yes

There are no separate judicial mechanisms to exclusively deal with contract-related disputes. However, the Supreme Court and Appellate Courts have commercial benches, which deal with commercial disputes related to the Competition Act, Secured Transaction Act, and other areas of commercial law. Commercial benches do not exist in district courts. Small claims courts and village courts do not exist.


Yes

Court-referred mediation is available (Mediation Act, 2011 and Rule 32 of District Court Rules, Rule 53 (D) of Appellate Court Rule, 1992 and Rule 65 (D) of Supreme Court Rules, 1993), and most likely to be used for an agricultural dispute. A separate Arbitration Act, 1999 is in force to deal with matters related to commercial law. No small claims court or specialized agricultural court exists in Nepal.


Yes Strict legal principles are not as applicable to alternative dispute resolution such as mediation.


Yes Nominal costs may be incurred in mediation.

a. Are the costs entailed typically less than that of the traditional court system? Yes

For mediation. It may not be the same situation for arbitration. Arbitration is costly compared to mediation. However, such costs do not exceed the amount in dispute.


No

140


N/A


Yes Alternative mechanisms are faster than the formal court system.

77. Are expedited or alternative mechanisms readily available outside of Kathmandu? Yes


Yes

Generally, rulings through alternative mechanisms are upheld in and enforced by the formal court system. However, courts may decline to uphold and enforce rulings of arbitrators where arbitrators exceed their authority or their rulings are in apparent error of law.

141

Starting and Operating a Farm Streamlining the regulatory burden to start and operate a farm reduces the barrier to formalization for small- and medium-scale commercial farms. Decentralized government offices improve rural access to government services. Efficient and well-implemented regulations also require coordinating the activities of multiple government agencies, while balancing policy considerations such as land and resource use, human health, and environmental safety Indicators:

K. Time, cost, and procedures for business registration and licensing of a mid-sized staple grain farm. Requirements may include national or local trading licenses, chemical storage requirements, workplace or employee registration, environmental permits, and company registration.

L. Index on access to business registration information.

Case Study Farm Crop Wheat Farm size 40 hectares Location Assen Legal Form Limited liability

company Annual Revenue US$ 40,108 Land tenure 50 year lease Market Farm gate, local

market

The Netherlands

A. Procedures, Time, and Cost to Start-up a 40-hectare Wheat Farm

19 Exchange rates of $1.315 to the euro


Cost (US$)19

Agency

1 Trade name search Entrepreneurs can conduct a search to select a trade name for their business at the Chamber of Commerce (Kamer van Koophandel, or KVK) website. The trade name must be unique in the sector and region in which the business will operate. Searching in the Trade Register of the KvK is free, and companies are searchable by trade name, address, or KvK number. Relevant Law: Trade Name Act (Handelsnaamwet)

Less than one hour

0 Chamber of Commerce

(Kamer van Koophandel, or KVK)

2 Draft Articles of Incorporation and register business with the KvK Incorporation of a B.V. (Besloten Vennootschap met beperkte aansprakelijkheid, a private company similar to an LLC) requires the services of a Dutch public notary. The notary must prepare and check the legal contents of the firm’s articles of incorporation. The articles of incorporation must be prepared in Dutch.

1 1,315 Public Notary, KvK

142

After the articles are prepared by a notary, farms must be registered with three bodies: the Chamber of Commerce (KvK)1, Dienst Regelingen (DR-Loket) in the Ministry of Economic Affairs (MINEZ), and the Product Board for Arable Crops (Productshap Akkerbouw, or PA). This can be accomplished in one procedure. Upon registration with the KvK, a farm is automatically registered with DR-Loket and listed at the PA. All businesses must be registered in the Trade Register of the KvK. Registration must occur within one week of the start of business. As of January 1, 2013, there is no fee to register in the Trade Register and no annual fee to register with the KvK. Registration of a B.V. (private limited company) is undertaken by a civil-law notary. Registration includes submission of a registration form in Dutch, a declaration from the notary stating that they have been charged with incorporation of the B.V., notarized identification documents of the incorporator(s) and any future directors of the B.V., and proof of business address. Additional documentation is required to register authorized persons or to list branches of the company. These documents must be lodged in person at the nearest regional KvK office, which often requires scheduling an appointment. Once the forms are received and approved by the KvK, the business will be registered in the Trade Register and issued a registration number. The KvK will pass the farm’s registration details to the Tax and Customs Administration (Belastingdienst) for automatic registration and issuance of a tax identification number at no cost. A B.V. may be established with one share and € 0.01, and a bank declaration is no longer required during incorporation.

3 Register employees with the national pension plan Employers must register all employees with the Company Pension Funds for Agriculture (Bedrijfspensioenfond voor de Landbouw, or BPL).1 Registration must occur within one month of hiring an employee.

1 0

Company Pension Funds for Agriculture

(Bedrijfspensioenfond voor de Landbouw, or BPL)

4 Register employees with social insurance Registration of employees with the Tax Authority (Belastingdienst)1 and the national Institute for Employee Insurance (Uitvoeringsinstituut Werknemersverzekeringen, or UWV)1 is required one day before an employee starts working.

1 0

Tax and Customs Authority (Belastingdienst) and Institute for Employee

Insurance (Uitvoeringsinstituut

Werknemersverzekeringen, or UWV)

143

5 Submit annual “Combined Registration” for farm census and agricultural subsidies Farms with annual revenue equal or greater to € 3,000 are required to complete the annual DR-Loket Agricultural Census. The Census document includes automatic registration with DR-Loket. Below this revenue threshold, registration may apply depending on the sector:

• Owners of any livestock regardless of farm size must complete the Agricultural Census for animal registration purposes

• Farms eligible for subsidies through the EU Common Agricultural Policy may apply through the Combined Registration

Farmers complete the Combined Registration (Gecombineerde Opgave), a single form which combines the Census questionnaire, application for agricultural subsidies, and registration with DR-Loket and the PA. As of 2012, the form is fully electronic and is sent to farmers between April 1 and May 15 (paper copies can still be requested from DR-Loket). Farmers must submit data on area and types of crops cultivated, size and type of all livestock, number of workers, other farm activities, and specifics such as if they use greenhouses, are certified organic, or use of manure fertilizer.

1 0 DR-Loket, MINEZ

6 Pay Annual Product Board Levies The Product Board for Arable Crops (Productschaap Akkerbouw, or PA) is a public company body with regulatory powers. The PA sets binding rules for companies and draws legal authority from the Law on Business Organization of 1950.1 The organization’s mandate covers the arable crops sector, including grains, potatoes, beets, onions, and agricultural seed. The PA is directed by a board comprised of representatives of the sector’s producer associations and employee unions.1 The PA represents both the business and public interests, giving the private sector a voice in their own rule-setting. The PA maintains a register of producers.1 Producers are automatically registered with the PA based on data submitted to the PA from DR-Loket. The PA administers levies on agricultural producers which are paid at the end of each calendar year. There are two levies: a Financing Charge of € 2.15 per hectare (ha) of cereals, sugar beets, and other arable crops, and a variable Fund Charge, currently € 3.20 per ha of cereals. The Financing Charge covers PA overhead while the Fund Charge is designed to fund activities requested by the industry.1 Respondents noted that more than 50% of the PA budget is for scientific research. The cost listed above is based on the case study farm of 40 hectares growing a

1 281 PA

144

widely-traded grain. As of January 1, 2014, the PA and all 17 product boards are scheduled to disband and cease to exist. Respondents noted that the timeframe and transition of PA duties has yet to be determined. Regulatory authority may return to MINEZ, and inspection authority to the Netherlands Food and Consumer Product Safety Authority (Nederlandse Voedsel-en Warenautoriteit, or NVWA). Research and promotion activities may be taken on by sector-specific business associations.

7 Obtain spraying license for plant protection chemicals Anyone wishing to use chemical pesticides as a professional in the Netherlands must obtain a ‘certificate of professional competence’ issued by the Accreditations Office (Bureau Erkenningen).1 The most basic certification for buying, using, or storing chemical products is the ‘Implementation’ certificate. Several schools offer studies/courses to learn the basic skills. Courses take six weeks to three months, depending on the amount of weekly course hours (for instance, a six week course has 1.5 days of classes per week). A course is recommended but only the examination is required. In practice, farmers reported that they take the course as well as continuing education trainings. Fees include: • Course (optional): € 346 to € 576, based on course.

Self-study: € 225. • Exam: € 275 for farmers running a farm. Exam fee for

farm employees is € 198. Cost listed above is based on an average course cost (€ 461). Certificates of professional competence are valid for 5 years and may be withdrawn if plant protection products are used carelessly or incorrectly.

60 969 Accreditations Office (Bureau Erkenningen )

8 Obtain inspection certificate for field-crop spraying equipment The PA sets regulations to ensure the use of well-maintained and well-tuned (approved) spray equipment. Farmers who own their own spraying equipment (common for arable crops but not for livestock farms) and third parties such as contractors are required to have chemical spraying equipment inspected every three years. The PA coordinates with the Foundation for Quality Control of Agricultural Equipment (SKL) to implement the equipment inspection scheme. SKL organizes, supervises, and sets the testing protocol for inspections. Uniform inspection of the field-crop spraying equipment is carried

1 231 Certified testing station

145

out by certified testing companies at testing stations located throughout the country, at a local level. The inspection determines if the sprayer has an even distribution pattern, has no leaks or other deficiencies and is in good working condition.1 Inspection fees vary by inspection company from € 40-90 for certification plus € 35-45 per working hour, excluding the cost of repairing any defects in the machinery. SKL is currently working to implement EU Directive 128/2009. The Directive will make the testing of all equipment mandatory in the EU in 2016. Relevant Laws: http://www.productschapakkerbouw.nl/files/ Overzichtsnotitie_spuitkeuring_2008.pdf

N/A Re-zone land for agricultural use The farm in this case study owns rural land that has not been zoned for agriculture. (In practice, all land in the Netherlands is zoned, and a farmer would only purchase agricultural land). Land use in the Netherlands is governed by zoning laws which are set at the local (municipal) level. The company must apply to the municipality for a dispensation or amendment to the zoning plan. Before changes are adopted, the municipality is obliged to organize a consultation period for the draft zoning plan. The applicant will have 6 weeks to study the draft plan and provide feedback. After studying the responses, the municipality will draw up the amended zoning plan, which must then be adopted by the municipal council.1

0 0

N/A Compliance with fertilizer use and storage requirements Rules on the application and storage of fertilizer are set on a national level through the Dutch Fertilizer Law and Regulations (Meststoffenwet, Uitvoeringsbesluit Meststoffenwet, and Uitvoeringsregeling Meststoffenwet) and the Act on Manure and Fertilizer, 1986 (No. 598).1 These rules are enforced on both a national and local level. Nationally, there is a maximum standard for nitrogen usage per hectare. The maximum nitrogen allowed is a total from all fertilizer sources, both inorganic and organic (such as manure). DR-Loket monitors the amount of inorganic and organic fertilizer purchased by farmers each year through reports provided by suppliers at the point of sale. The maximum usage standard has been put in place to minimize the amount of mineral runoff into the water system. On a local level, the Gemeente (municipal authority) enforces compliance with storage requirements. Fertilizer must be

0 0 DR-Loket and the

Gemeente (Municipal Authority)

146

stored at least 5m from all water sources and 50m from a place of residence. Farmers may not store fertilizer in one location for more than 6 months.

N/A Wastewater discharge Wastewater runoff into surface water is closely regulated in the Netherlands. Farms must comply with regulations set by regional public water management authorities, or Waterschappen. Farms are automatically registered with the Waterschap through the Kadaster (land registry) system. Requirements include using a wastewater cleaning system before water may be returned to the natural water system. This includes environmental mitigation strategies for runoff from the fields. Farmers must pay annual water taxes to the Waterschap based on the amount of water used and the size of the farm.

0 0 Water Board (Waterschap)

N/A Building Permit Construction of new buildings (farmhouses, barns, or other storage facilities) or changes to existing buildings require the permission of the local Gemeente (municipal authority). Respondents noted that this can take 6-9 months as the permit requires the approval of the municipal council and the submission of an environmental impact report.

0 0 Gemeente (Municipal Authority)

N/A Voluntary Certification of Arable Crops As of January 1, 2005, farms must meet the requirements of the EU General Food Law,1 which includes provisions for primary agricultural producers. To meet these requirements as well of those of consumers and of purchasers, many Dutch farmers choose to register with a certification scheme. Certification has been described as “voluntary, but also not voluntary.” Certification offers proof that growing, harvesting, and storage of plants and plant products complies with food and feed safety and environmental sustainability. The majority of Dutch farms belong to a certification scheme. Certification may be acquired from a cooperative or product-specific industry body, through internationally-recognized schemes like GlobalGAP, or through a uniform “grains, seeds, and legumes” certification (GZP certificate) issued by the PA.1 The specific certification system a farmer chooses depends on their client, product, and level of industry concentration. For instance, purchasers (wholesalers, traders, processors, or retailers) with large market share may set their own certification requirements (e.g. potato starch company AVEBE, sugar beet processor Cosun, and cooperative Agrifirm for wheat). The cost of certification under the PA scheme is € 80 per crop in the first year and € 35 per crop in subsequent years.

30 0 Certification Organization

147





Additionally, trade name search can be done online on the KvK website. Registration of some types of businesses can be done remotely, but most (including BV) require in-person appointments with the KvK.

31. Is registration possible in every state/province? Yes


Yes


Dutch law recognizes foreign legal entities. In other words, the foreign legal entity wishing to start activities in the Netherlands need not be converted into a Dutch legal form. The organization and structure of the legal entity is governed by the foreign law under which it was formed. National law of the state of origin applies, however European Regulations 68/151EEG and 89/666 EEG are specific rules on how to register companies formed in the European Economic Region.

If the farm plants three crops (wheat, barley, and potatoes), they must pay three separate certification fees. Certification is obtained through one of three private certification organizations: NAK Agro, SGS Agro, and Control Union Certification. Certification entails one inspection prior to harvest during the first growing season and one random inspection in the next three years. For GlobalGAP certification, farmers reported an annual audit of farm records and a random inspection of 1% of farms per year.


148


K. Time, cost, and procedures to obtain operational licenses for a seed supplier. Requirements may include import license, seed dealer license, license for storage facilities, national or local trading licenses, and inspections.

L. Time, cost, and procedures to register a new proprietary seed variety.



Type of Seed Wheat Location Amsterdam Ownership Domestic, non-state-owned

enterprise


No. Procedure Time (days) Cost (USD)

Agency

1 Register with the Dutch General Inspection Service for Agricultural Seed and Seed Potatoes (NAK) Under the terms of EU trade directives and Dutch legislation (Seeds and Planting Materials Act, 2005, Sections 42-45), producers and traders of propagating material must register with an authorized body. This authority monitors companies for traceability of seed and may attach requirements to the company’s registration to demonstrate compliance with the law. Field Crop Seed Suppliers NAK, the Dutch General Inspection Service for Agricultural Seed and Seed Potatoes, has been appointed by the Minister of Economic Affairs, Agriculture and Innovation (MINEZ) to perform the official seed inspection and seed certification in the Netherlands. NAK also carries out phytosanitary inspections for seed potatoes and field crop seeds. All growers and importers/exporters of seed must register with NAK (Approximately 3,700 growers and companies). A company only undertaking domestic distribution or marketing of seed does not need to register. Registration is one-time and free. Seed companies must submit to NAK their business identification number issued by the Chamber of Commerce (KvK) during company registration. Registration with NAK is required in order for NAK to certify seed produced in the

1 0 NAK

149

Netherlands. All seed marketed in the European Union must be certified. Horticultural and Vegetable Seed Suppliers Approximately 3,500 horticultural and vegetable seed companies in the Netherlands are registered with Naktuinbouw.20 Companies include breeders, propagators, producers, processing companies and traders. Naktuinbouw registers seed companies and issues plant passports for products which must be accompanied by a plant passport to be traded within the EU.21 Seed companies registered with Naktuinbouw must submit information regarding the technical organization of the enterprise, the production process, storage, and delivery. Naktuinbouw conducts company audits at least once a year to ensure compliance. Naktuinbouw may impose additional conditions in order to make assessing the phytosanitary status of a company easier, and will take into account the company’s production circumstances and operational management.

2 Pay Product Board taxes Seed companies involved in growing, treating, processing, or marketing of seeds of cereals, legumes, and other field crops must pay an annual basic sales tax to the PA: Annual Sales Sales Tax € 20,000 to € 200,000 ! € 54.45 € 200,000-1,000,000 ! € 272.27 € 1,000,000-2,000,000 ! € 544.54 € 2,000,000-4,000,000 ! € 1,089.07 > € 4,000,000 ! € 5,445.36 Calculation of the basic sales tax is done in the third quarter and does not include revenue earned on the trade of imported products from other EU Member States. Seed sellers must pay two additional annual fees to the PA. The financing charge covers PA overhead and operating costs, while the fund charge contributes towards a fund that is spent on activities such as research or international marketing of Dutch agricultural products. Use of the fund is determined by the PA members, the agribusinesses themselves. • Financing charge: €130 per company and €1.74 per

hectare purchased of agricultural seeds sold (except flax seed)

• Fund charge: € 5.59 per hectare purchased of seeds of cereals, legumes, and other crops (except flax seed). (2012 rates)22

1 725

Product Board for Arable Crops (Productschap

Akkerbouw, or PA)

20 See more at: http://www.naktuinbouw.nl/en/topic/registered-‐companies-‐naktuinbouw-‐inspections#sthash.LzyiCB9M.dpuf 21 http://www.naktuinbouw.nl/en/article/plant-‐passport-‐guide-‐companies#sthash.sShTGo1w.dpuf 22 http://www.productschapakkerbouw.nl/handel/heffingen

150

As of January 1, 2014, the PA and all product boards in the Netherlands are scheduled to be disbanded and this requirement made no longer in effect.

N/A Seed certification (3 procedures)23 All seed marketed in the EU must be certified. NAK is the certification body for all seed of arable/field crops produced in the Netherlands. Seed certification varies by type of crop – for instance, seed potatoes require additional quality and quarantine measures. NAK charges cost-recovery fees for certification services. All fee schedules are listed online.24 Companies can reduce the costs if they are licensed by NAK for inspection activities and do this work under official supervision of NAK. 1. For wheat seed production, certification involves one

inspection during the growing season to check for varietal identity, purity, weeds (wild oat contamination, etc.), and diseases. NAK field inspection costs € 32.20 per ha.

2. After harvest, the seed lot is sampled and tested for

purity, weed contamination, disease, germination rate, and moisture content. Testing follows ISTA standards. A one-kilogram sample is taken for each 30 tons of seed produced. Sampling and testing fees include: • € 16.70 per sample (handling/administration fee) • € 17.60 for manual sampling (per sample) or € 13.20

for automatic sampling • € 13.20 per sample for moisture test • € 13.30 per sample for purity test for grains • € 23.40 per sample for germination test for cereals

by NAK method, or € 29.20 by ISTA method • Additional health and purity tests (as requested by

the grower)

3. NAK provides inspection results to the company. Based on the inspection results, the company may request certification labels. Seeds are then processed (treated with chemicals), packaged, and the bags are sealed with NAK-issued labels. Labels provide official proof of certification. Labeling fees include: • € 11.30 per ton • € 3.70 per 100 labels/certificates (one per bag)

NAK seed certificates specify information on the seed type,

Minimum 3 days 0 NAK

23 Seed certification is not applicable in this scenario, as the case study seed company is engaged only in the distribution and sale of agricultural seeds and not seed production or multiplication. However, all seed marketed in the European Union must be certified, so the requirement must be met during the production phase. 24http://www.nak.nl/public/upload/2012/Zakelijke%20informatie/Tarieven/Keuringstarieven%20zaaizaden%202013-‐2014.pdf

151

location, and identification for traceability purposes. The certificate is issued in the form of a label which is affixed to the bags of seed at the time of packaging. Labels are color-coded according to EU regulations. For seed varieties that require a plant passport for trade within the Netherlands and within the EU, the NAK label lists the plant passport as proof that the material in question complies with the relevant phytosanitary requirements (i.e. that it is free from quarantine organisms). No additional certification is needed to obtain a plant passport.25 The following items are listed on NAK seed bag labels: 1. Class (pre-basic, basic, or certified seed) 2. Species 3. Variety name 4. Number under which the grower is registered with the

NAK 5. Date of certification 6. Country and area in which the seed originated 7. Year of production 8. Certificate number 9. Lot number 10. Germination rate

N/A Optional – Registration of seed storage and inspection location Seed importers that choose to use their warehouse or storage location to store seed consignments before they are inspected and cleared must register for seed quarantine inspections with the NVWA and meet basic storage requirements. Registration may include an inspection by the NVWA. This procedure is optional because phytosanitary inspections can also be done at the initial point of entry into the EU.

1 0

Netherlands Food and Consumer

Safety Authority (Nederlandse Voedsel-en

Warenautoriteit, or NVWA)


25 The EU-‐Phytosanitary Directive 2000/29 states which plants must be accompanied by a plant passport. Seed potatoes require a plant passport but most field crop seeds such as wheat, sugar beet, and barley do not need one. For crops like seed potatoes a plant passport is necessary for any movement or sale of the product, both within an EU member state (ie. within the Netherlands) and between member states. The plant passport is not applicable to this case study, which focuses on wheat seed.

152


Step Details Time (days)

Cost (US$) Agency

Application Naktuinbouw manages all seed variety registration and issuance of Plant Breeder’s rights. Variety registration is undertaken by the Plant Variety Board, chaired by a staff member of Naktuinbouw and with representation from universities, research organizations, and inspection services (including NAK, the Dutch General Inspection Service for Agricultural Seed and Seed Potatoes). Applications for listing of new seed varieties should be sent to Naktuinbouw by the listed application date (deadline depends on the crop, typically around February 1), and should include the following: • Application form / technical questionnaire for hybrid and

parental components (DUS description and information) • Value for commercial use (VCU) questionnaire with data

on use (grain/silage, maturity group for testing) • Additional declaration about obligations between parties

(breeders/officials) • Seed sample for distinctness, uniformity, and stability

(DUS) testing More information on application requirements, including the application forms, can be found on Naktuinbouw’s website.26

1 618 Plant Variety

Board, Naktuinbouw

Field Testing

Is the Distinctness, Uniformity, and Stability (DUS) test required? Yes

Number of Seasons 2 Number of Testing Locations 1 Is the Value for Cultivation and Use (VCU) test required? Yes

Number of Seasons 2 Number of Testing Locations 10 Can VCU test be undertaken simultaneously with the DUS test? Yes

DUS Naktuinbouw is the only organization in the Netherlands authorized to assess seed varieties for distinctness, uniformity and stability (DUS). Naktuinbouw performs tests according to CPVO protocols (EU Community Plant Variety Office), UPOV directives (International Union for the Protection of New Varieties of Plants), and national protocol.27 In the European Union, DUS testing may only be completed by a national plant research organization. DUS testing costs € 1,470 per season for a minimum of two

640 days (mid-

February Year 1 to

mid-November Year 2). Total time

is 2 seasons for DUS

9,393 DUS: 1,934 per season (3,868

total), or 316 to purchase DUS

tests from another EU

member state.

VCU: 2,762 per season of VCU

Naktuinbouw

26 http://www.naktuinbouw.nl/en/service/application-‐forms-‐plant-‐breeders-‐rights-‐and-‐listingerlands impor http://www.naktuinbouw.nl/en/service/requirements-‐submission-‐agricultural 27 http://www.naktuinbouw.nl/en/topic/national-‐test-‐guidelines-‐dus-‐testing

153

seasons. For seed varieties previously released elsewhere in the European Union, Naktuinbouw may buy the testing results from the competent authority in that country. According to the UPOV treaty, buying DUS results from another national plant research organization in the EU costs 350 Swiss francs, or € 240 as listed on Naktuinbouw’s website.28 For cereals and grain seeds, Naktuinbouw used to arrange for DUS testing to be conducted by NAK at its Emmeloord field station. Currently, DUS for grains/cereals is not done in the Netherlands because there are only 4-5 applications per year for grain seed varieties and the official reference collection is small. (Grain seed testing requires a large number of measurements and reference applications). DUS tests for grains and cereals such as maize are therefore typically completed in Germany, France or the Czech Republic. VCU VCU testing is based on protocols approved by the Plant Variety Board. 29 Testing is performed by testing stations operating on tender issued by the private sector. Tenders are issued on a crop-specific basis every 4-5 years by the seed association (Plantum). VCU testing fees are directly paid by the applicant to the testing station. VCU tests are currently co-funded by the breeder (55%) and the Product Board for Arable Crops (Productschap Akkerbouw, or PA) (45%). As of 2014, the PA is scheduled to disband and VCU tests will be fully funded by the applicant. Naktuinbouw supervises the VCU testing and is responsible for technical review. The Plant Variety Board releases varieties based on fixed criteria. Seed companies noted that the official criteria for VCU aim only to protect environmental, human, and animal health, rather than yield. VCU testing is not required for vegetable seed varieties. The Dutch seed industry has elected to undertake a voluntary third year of VCU testing for definitive yield results on new varieties. For more information, see the final procedure: “Voluntary Third Year of VCU Testing.”

and VCU since they

can be done

simultaneously.

There is typically

one growing season

per year in the

Netherlands.

testing (5,524 total) which is

organized through the

private sector. A third season of VCU testing is optional, at the

breeder’s expense. VCU

testing is partially funded

by the PA through the end

of 2013.

Technical Review

Technical review is based on fixed criteria (minimum criteria and index classification/evaluation), so a decision is typically reached quickly. 5 0

Plant Variety Board,

Naktuinbouw


New seed varieties are approved for release by the supervisor of the Plant Variety Board, operating on behalf the Board. Varieties are approved based on fixed criteria (minimum criteria and index classification/evaluation). Approval and official release typically occurs within 3 months

90 0 Plant Variety

Board, Naktuinbouw

28 All Naktuinbouw fees are published online: http://www.naktuinbouw.nl/en/topic/fees-‐variety-‐testing 29 For more information: http://www.naktuinbouw.nl/en/topic/agricultural-‐crops-‐technical-‐dus-‐test-‐and-‐vcu

154

of receipt of the DUS and VCU results. VCU trials are usually completed in November of a year (after the end of the crop cycle). If the DUS report is also obtained from the foreign office before the end of the year, registration can be granted in February of the following year. Respondents noted the total time for registration of new varieties is just over two years.


Official release includes listing the variety in the Dutch Register of Varieties and the national catalogue.30

Simultaneous with previous

procedure

0 Plant Variety

Board, Naktuinbouw

N/A - Listing in the European Union Common Catalogue

Nationally-released varieties are listed in the EU Common Catalogue for Community Listing.31 The variety is then licensed for marketing throughout the EU community. This is done automatically by Naktuinbouw following official release of the variety – there are no requirements of the breeder/seed company. Respondents noted that once listed nationally, listing in the EU can still take several months, even though it is an administrative procedure.

60 0 Plant Variety

Board, Naktuinbouw

N/A - Voluntary Third Season of VCU Testing

The Dutch seed industry has elected to undertake a voluntary third year of VCU testing for definitive results on new varieties. VCU Test results are indexed to rank varieties by qualities such as yield and disease resistance. The third year of VCU testing is organized through CSAR Foundation, a Dutch organization to manage the Recommended List of Crops. CSAR manages a technical committee to establish the weights and scoring of the index for seed variety attributes and to review the VCU results for the third season.32 The third year of testing must meet private sector standards, which are stricter than the public standards for competitive reasons. If the variety results are high enough after the third season of VCU testing, the variety is listed on the Recommended list. 85% of all seed sold in the Netherlands is from the Recommended list, making it a de facto requirement for seed companies. The Recommended list is normally produced by December of the third year of testing.

365 Plant Variety

Board, Naktuinbouw

Total 533steps 736 days US$10,011

30 http://www.naktuinbouw.nl/sites/naktuinbouw.eu/files/Nationale%20RL2011.pdf and http://www.naktuinbouw.nl/en/article/gazette 31 Accessible online at http://ec.europa.eu/food/plant/propagation/catalogues/database/public/index.cfm?event=homepage 32 For more information, see CSAR’s website: http://www.rassenlijst.info/ 33 Excludes two optional (but commonly-‐done) procedures: voluntary 3rd season of VCU testing which is industry-‐standard, and listing in EU catalogue.

Question Response Comments

16. Does the authority in charge of seed variety registration accept testing data from the breeder?

Yes

No for DUS testing. DUS trials can only be conducted by a country’s official national plant research organization. Yes for VCU testing, which is conducted by the private sector.

155


Yes

Yes for DUS testing by buying DUS results from an approved DUS testing authority in another country. No for VCU which is more specific to the region’s agro-ecological conditions, although some quality and resistance results can be transferred between countries.


All European Union members. Naktuinbouw may purchase DUS results from testing stations which are entrusted/accredited by CPVO.

18. Is the Netherlands party to a regional agreement with respect to common procedures for variety testing, registration, and/or release that is effectively implemented in practice?

Yes The Netherlands is fully integrated in the EU network of testing stations and authorities.


156


K. Time, cost, and procedures to obtain operational licenses for a fertilizer supplier. Requirements may include import license, fertilizer dealer license, licenses for storage facilities, environmental permit, national or local trading licenses, and inspections.

L. Index on the legal and institutional framework for the fertilizer sector.




Location Amsterdam Ownership Domestic, non-state-owned

enterprise

Licenses and Permissions for Fertilizer Provider34


1 Register as a fertilizer seller or distributor Fertilizer producers and suppliers that want to market fertilizers in the Netherlands must make a one-time registration with the Ministry of Economic Affairs. There is no fee and no renewal required. Mineral fertilizer trade has been harmonized within the European Union. Most fertilizer products listed in the EU Fertilizer Directive 2003/2003 may be freely imported and sold in the Netherlands. The EU Fertilizer Directive includes a comprehensive list of approved fertilizers, minimum levels of nutrients, and stipulates methods of sampling and analysis of fertilizers. The EU Fertilizer Directive also sets rules for traceability, labeling, control, and safety, and sets procedures for authorization of new fertilizers and their inclusion on the Directive list of approved fertilizers. In addition to fertilizers approved by the European Community (EC), under the Dutch fertilizer law and regulations (Meststoffenwet, Uitvoeringsbesluit Meststoffenwet, and Uitvoeringsregeling Meststoffenwet) a category of “other inorganic

21 0

Dienst Regelingen (DR-Loket), Ministry of

Economic Affairs (MINEZ)

34 1)Relevant Laws: EU Fertilizer Directive 2003/2003 2)Dutch Fertilizer Law and Regulations (Meststoffenwet, Uitvoeringsbesluit Meststoffenwet, and Uitvoeringsregeling Meststoffenwet) 3)Security Convenant Kunstmest (Fertilizer Security Covenant) 4) EU Chemicals Directive No.1907/2006 concerning the Registration, Evaluation, Authorization, and Restriction of Chemicals (REACH)

157

fertilizers” may be marketed in the Netherlands without being listed if they meet general requirements as well as agronomic, packaging, and labeling requirements.35 The Dutch fertilizer law deals mainly with rules for the use of fertilizer by farmers, including the maximum amount of nitrate farmers can use per year.

2 Join fertilizer product consortiums and register products with REACH The EU Chemicals Directive No. 1907/2006 went into effect in June 1, 2007. The regulation covers the Registration, Evaluation, Authorization, and Restriction of Chemicals (REACH) and establishes a European Agency for Chemical Substances (EHCA) in Helsinki. The regulation’s objective is to ensure human and environmental health, while enhancing the competitiveness of the European chemical industry by standardizing the trade of chemical fertilizer across the EU. All manufacturers and importers of inorganic fertilizer must register with REACH through the EHCA. • Registration is product-based. The company must submit a

separate registration application and dossier for each fertilizer product marketed.

• Product registration may be Single (one company) or Joint (a consortium of sellers). In practice, companies register jointly to reduce the costs and burden of compliance.

• Applicants for a new product must submit a technical dossier that identifies the substance and lists its chemical properties, and provides a safety data sheet, agronomic data, and details on methods of analysis. As part of ongoing compliance, companies must identify and manage the risks linked to the substances they manufacture and market in the EU.

• The cost listed above is the gazette fee for joint registration by a medium enterprise of one chemical substance with volumes greater than 1,000 tons per year. Registration costs vary by Single/Joint registration and by company size (reduced fees for MSMEs), and are higher for hazardous substances.

• One respondent noted that the total cost per product for REACH compliance (including laboratory analysis and dossier preparation) can be EUR 500,000. With joint registration, if there are 200 suppliers in the EU the total cost is divided and shared equally among consortium members. However, if one company is the sole vendor of a product, they must bear the entire cost of registration.

• The time listed for this procedure does not include dossier

60 21,293 per product

European Agency for Chemical Substances

(EHCA)

35 Rules for other organic fertilizers can be found on the MMF website: http://mineralemeststoffen.brabers.nl/Regelgeving/Regels-‐voor-‐overige-‐anorganische-‐meststoffen

158

preparation. According to the EU Chemical Directive, the ECHA must notify applicants of an incomplete application within three weeks of submission. Complete applications must be listed in the ECHA database within 30 days of submission.

Resources on REACH registration, including copies of the EU Chemical Directive and amendments, can be found on the ECHA website: http://echa.europa.eu Information on product consortiums is available at http://www.reachcentrum.eu, a resource managed by the chemical industry association.

3 Register with the Mineral Fertilizer Distribution Foundation (MMD) The Mineral Fertilizer Distribution Foundation (Minerale Mestoffen Distributie, or MMD) and the Ministry of Housing, Spatial Planning and the Environment (Ministerie van VROM) have collaborated to institute a system of industry self-regulation of fertilizer sales. The Fertilizer Security Covenant (Security Convenant Kunstmest, or SCK) is a voluntary industry agreement that regulates the sale of dangerous fertilizers in order to safeguard human and environmental safety and national security. The SCK is implemented by VKP and MMF (fertilizer producer and distributor associations). These industry associations jointly represent more than 95% of fertilizer traded in the Netherlands. Companies are not legally obligated to register with the MMD and follow the stipulations of the SCK, although the vast majority of firms do register and many perceive registration as obligatory. As of late 2012 there were more than 800 branches of fertilizer companies registered with the MMD. The SCK includes rules and requirements for fertilizer suppliers: • All companies marketing Calcium Ammonium Nitrate

(CAN) and urea must be registered with the MMD. Mandatory registration applies to nitrate-containing inorganic fertilizers that contain 28% or more nitrogen.

• No sales to individuals of nitrate-containing inorganic fertilizers containing 16% or more nitrogen

• Comply with the requirements of the Hazardous Substances regulations (PGS 7, Chapter 9) for all storage sites with more than 250 tons of CAN fertilizer

• Maintain records of fertilizer sales for traceability purposes and provide tonnage reports to MMD

• Report all suspicious or unusual transactions to the MMD and the local police

• Registered firms may only trade with other registered firms.

The cost listed above is the MMD annual registration fee per branch or head office.

1 49

Mineral Fertilizer Distribution Foundation

(Minerale Mestoffen Distributie, or

MMD)

159

4 Obtain environmental permit The permit is granted on the basis of safeguards to human and environmental health and safety. There are also specifications for the level of noise and dust that may be produced. Companies must register their emissions levels from fertilizer manufacturing facilities. Respondents noted that businesses conduct frequent internal audits. Facilities where fertilizer is stored are subject to periodic inspections by the national authorities, typically 1-2 times per year. The time to obtain an environmental permit varies from 8 weeks for simple cases (individuals) to a maximum of 26 weeks for more complex cases, such as a fertilizer company. The decision time can be extended once for up to 6 weeks, under specific circumstances (e.g. if the required information is incomplete or there are other procedures pending).

119 0

Municipal Authority

(Gemeente) and Provincial Authority

N/A Periodic fertilizer quality inspections The Ministry of Environment Inspection Services (Inspectieloket Land-en Tuinbouw) conducts random fertilizer sampling and testing to ensure that products conform to the law. Inspectors check product quality, confirm that products marketed have been approved for sale (all fertilizers must be listed in the EU Fertilizer Directive 2003/2003 or permitted by the Dutch Fertilizer Law), and that they meet specifications for to labeling and packaging of fertilizer. Inspections are rare.

N/A N/A

Inspectieloket Land-en Tuinbouw (Ministry of Environment Inspection Services)

N/A Wastewater discharge Wastewater runoff into surface water is highly regulated in the Netherlands. Farms must comply with regulations set by the public water management authority, or Waterschap. Farms are automatically registered with the Waterschap through the Kadaster (land registry) system. Requirements include using a wastewater cleaning system before water may be returned to the natural water system. This includes environmental mitigation strategies for runoff from the fields. Farmers must pay annual water taxes to the Waterschap based on the amount of water used and the size of the farm.

N/A N/A Waterschap (Water Boards)


160



Comments


Yes

Relevant Laws: 1) EU Fertilizer Directive 2003/2003 2) Dutch Fertilizer Law and Regulations

(Meststoffenwet, Uitvoeringsbesluit Meststoffenwet, and Uitvoeringsregeling Meststoffenwet)

3) Security Convenant Kunstmest (Fertilizer Security Covenant)

EU Chemicals Directive No.1907/2006 concerning the Registration, Evaluation, Authorization, and Restriction of Chemicals (REACH)


p. Set truth-in-labeling guidelines? (e.g. fertilizer bag labels must includes the Netherland’s official language(s), net weight or volume, “guaranteed analysis” of minimum levels of nutrients claimed, directions for use, and health and safety precautions)

Yes

q. Prohibit the sale of open, mislabeled, or adulterated bags of fertilizer?

Yes

r. Establish rules for the accreditation of third-party certification of fertilizer quality? (e.g. an accredited private laboratory network)

Yes


Yes


a. Fertilizer production and storage facilities? Yes b. Fertilizer at the point of sale (e.g. at retail shops)? Yes


Yes


Yes


No

No licenses are required to operate a fertilizer importer, distributor, or retailer.


No

161


P. Time, cost, and procedures to transfer farmland. Requirements may include cadastral survey, title and encumbrances search, valuation and inspection, government consent to transfer, stamp duty and transfer tax, and registration of deed of sale.

Q. Index on access to property registration information.

R. Index on legal framework for leasing farmland, including customary land.


LLCs Farm size 40 hectares Purchase Price $2,367,000 Location Assen Land Tenure Owned (or Long-term

Lease equivalent)


No. Procedure Time (days) Cost (US$) Agency 1 Conduct title search in Land Registry

A civil law notary would be hired to complete the entire transaction, including title search. Title search of the national land registry database can be completed online (i.e. accessible from all location) and the results returned quickly. Typically three title searches would be done: one search when the notary begins the assignment, one search immediately prior to signing the deed, and a final search one day after signing to confirm that the transfer of title has been completed before payment to the seller is transferred. The total cost for all three title searches is around EUR 50 per parcel of land, with an additional VAT of 21% payable on services performed by the notary.

Less than 1 hour

81 Land Registry

2 Confirm identity of parties Since the parties are LLCs, the notary would check the identity of the parties with the Chamber of Commerce as part of Know-Your-Customer rules to confirm that they are entitled to enter into this legal transaction on behalf of their companies. The search can be completed online, accessing a national database of the trade register. The cost of this procedure is EUR 35, excluding VAT.

Less than 1 hour

56 Chamber of Commerce

162

3 Execution of deed of transfer of title A contract would have been previously concluded between Buyer and Seller containing all terms and conditions for the sale. Subsequently, a deed of transfer of title would be drafted and a hard copy executed by the parties in front of a Dutch civil law notary. The fee charged by the notary covers all procedures listed herein required to complete the transfer of title, and could be charged via a flat fee or by hour. The average notarial fees for a normal transfer as described in the case study would be EUR 1,000-2,000, excluding VAT. Search fees, registration costs, and transfer tax are not included in this amount.

Less than 1 hour

2,389 Civil law notary

4 Registration of deed of transfer of title The notary files an electronic copy of the executed deed of transfer of title (which typically includes the contract of sale) with the Land Registry, a process which can be completed online. If submitted before the Land Registry closes at 3pm, the registration should appear the following day. Upon registration of the notarial deed of transfer with the Land Registry, the transfer is considered effective.

1 209 Land Registry

5 Payment of transfer tax After execution of the deed of transfer of title, the notary sends the hard copy of the original deed to the tax authorities within 10 days, which they return with a date stamp. The notary includes a footer in the deed declaring what amounts of transfer tax are due. There is no transfer tax for agricultural land. Transfer tax for buildings is 6% (= EUR 7,560 based on case study), and transfer tax for homes is currently reduced to 2% (= EUR 2,160 based on case study). The transfer taxes are based on consideration or an assessment of the actual value if the purchase price is significantly lower. The tax authorities send an invoice to notaries every two weeks stating how much transfer tax is due, typically combining taxes from multiple transactions. The notary is then legally responsible for forwarding payment to the tax authorities from funds previously to the notary before execution of the deed of transfer of title (for consideration for the sale and applicable transfer tax) and being held in escrow in a third party account.

20 12,78636 Dutch Tax and Customs Administration


36 Assuming value of buildings is 7% and home is 6% of consideration listed in the case study.

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Comments


Yes There is one central land registry in the Netherlands, in which all real property is registered and which can be accessed in all regions.


Yes The process primarily occurs online, except for the execution of a hard copy of the notarial deed of transfer, which is necessary for the transfer of ownership.


Yes There are various websites explaining the necessary steps in the Netherlands for a transfer of ownership.


Yes


Yes


Yes


Yes

Leasing Rural Land Index (0-9)

Question Index

Score: 5 Comments


Yes There are two types of leases in the Netherlands: (1) permanent/ground leases (erfpacht) and (2) contractual leases. Permanent leases are typically in urban areas for government land and are very rare for agricultural land. The responses below are for contractual leases, which are much more common for agricultural land.


Yes


No There is no approval required to enter into a lease for land under Dutch law, disregarding any possible requirements under relevant competition laws or municipal rights of first refusal (which are more applicable to ground leases).



Under Dutch law, a long term lease, or a leasehold right, may be perpetual or temporary. In practice, leases longer than 10-30 years are rare.



There is no statutory maximum amount of land that a formal entity can acquire, disregarding any possible requirements under relevant competition laws or environmental (agricultural) laws.

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Yes All land in the Netherlands is subject to a zoning plan.


No Depends on the applicable leasehold conditions.


No Contractual lease agreements typically stipulate that the lease cannot be transferred by the lessee. A permanent lease, however, is a real right that can be transferred to another formal entity in the same way as land held in freehold.

a. Without lessor approval? N/A


No A contractual lease is not registered in the Land Registry, while a permanent lease is registered. A contractual lease must be approved by and “registered” at a Land Chamber, a judicial body that supervises agricultural lease contracts (not a public registry). The Chamber ensures compliance with the Agricultural Holdings Act which specifies rules for both lessors and lessees such as #8 above, establishes controls on lease rates, and enforces other protections of lessee rights.


No One cannot obtain a mortgage on a contractual lease, only on a permanent lease.

a) Do such mortgages occur in practice? N/A

165


P. Types of agricultural collateral allowed by the legal and regulatory framework and accepted by financial institutions in practice.

Q. Quality of existing collateral registries for movable collateral.

R. Strength of legal framework for warehouse receipts systems.

Strength of Legal Right Index (0-10)

Index Score: 10

Types of Collateral

Allowed by Law

Used in Practice

Type of Charge

Is charge registered?

Comments

1. Farm equipment

Yes Yes N/A. Pledge does not specify type of charge, and no floating charges in the Netherlands.

No Aside from a few exceptions (e.g. aircrafts and ships), movable collateral in the Netherlands is not registered in a collateral registry that provides public notice. A security interest in movable collateral is provided via a pledge - a private contractual arrangement between borrower and financial institution pledging collateral when the borrower cannot meet their obligations. The Dutch Civil Code is quite general regarding what can be considered collateral – most assets and rights can be pledged in theory. In practice, four types of movables are typically accepted as collateral by agricultural lenders (though may be valued quite low): (1) equipment, (2) crops/livestock, (3) inventory, and (4) accounts receivable.

2. Crop in field Yes Yes See #1 No


Yes Yes See #1 No

4. Livestock Yes Yes See #1 No

5. Inventory Yes Yes See #1 No

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Comments


N/A There is no movable collateral registry in the Netherlands. A security interest in movables can be granted via a pledge created by either a notarial deed or a privately-executed agreement. Neither of these instruments is publicly registered, though privately-executed agreements are “registered” with the tax inspectorate for date stamping purposes only. In practice, an agribusiness must report their assets and loans in their annual financial statements, signed by a certified accountant. Financial institutions ask for copies of these reports to determine if there are existing loans and presumably existing liens on assets. Borrowers must also typically declare that there are no existing liens on their assets.





61. Can registration and searching in the movable


Yes No N/A No

7. Futures contract

Yes No N/A No Too difficult to value.


Yes Yes See #1 No


Yes No N/A No Too difficult to value.


Yes Yes Mortgage Yes Land and buildings considered primary collateral; movables considered secondary collateral. Unlike pledges over movables, mortgages are publicly registered in the land registry (Kadaster).

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collateral registry be performed online?






Warehouse Receipts System Index (0-14)


Comments


No There are no laws or regulations pertaining specifically to warehouse receipts systems in the Netherlands. There is a form of receipt (ceel) that legally represents ownership of goods in storage and typically applies for shippers during trade. A ceel could in theory be pledged as collateral, though it is not commonly used by agribusinesses.








168















169


U. Time, cost, and documents to export a widely-traded agricultural commodity.

V. Index on legal framework for phytosanitary certificates for export.

W. Time, cost, and documents to import hybrid seed.

X. Index on trade facilitation measures

Product Wheat Export Consignment


Value US$20,000 Point of Exit Rotterdam Port




Documents to Export Commodity Phyosanitary Certificate

Commercial Invoice

Packing List

Bill of Landing Customs Export Declaration

TOTAL: 5 documents


Time (days)

Cost (US$)


2 $ 280


1 $ 0

TOTAL 3 days1 $ 280

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Documents to Import Hybrid Seed Phytosanitary Certificate

Certificate of origin

Bill of landing Commercial Invoice

Packing List

Customs Import Declaration

TOTAL: 6 documents


Time (days)

Cost (US$)


3 $186


1 $250

TOTAL 4 days $436

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37 This index was used in Ghana, Netherlands, and Thailand and subsequently refined. The questions and scores therefore differ slightly from the remaining AGRI Index countries. For more information on revisions to the index, see “Appendix: Methodology” in the 2014 AGRI Index report. 38http://www.belastingdienst.nl/wps/wcm/connect/bldcontenten/belastingdienst/customs/entry/process_steps_in_customs_manifest_customs_entry/risk_analysis_and_selection/risk_analysis_and_selection


Comments

1. Is pre-shipment document submission available? Yes Importers/forwarders electronically submit a pre-arrival message. For highly perishable goods, they must notify at least 4 hours in advance of the consignment’s arrival by airfreight. For goods arriving by sea, an Entry Summary Declaration must be made at least 24 hours prior to loading in the port of departure.

2. Do customs and other agencies utilize risk management techniques and audit-based controls to reduce the frequency of cargo inspections?

Yes The frequency of inspections is reduced through risk management techniques. 38 Relevant Laws: 2913/1993, 1276/2008, 2535/2001.

3. If goods must be inspected by customs as well as by other agencies, do customs ensure that the inspections are coordinated and, if possible, carried out at the same time?

Yes The electronic trade system notifies all actors involved of an arriving shipment. The date and time of inspections is set in advance of arrival and are coordinated among agencies. Inspections occur at one of several authorized inspection locations throughout the Port of Rotterdam.

4. Are consignments of imported seed allowed to enter The Netherlands (but remain in storage) while samples undergo laboratory analysis?

Yes Seed consignments may enter the Netherlands and remain in a quarantine area until test results are obtained.

5. Is timely and accurate trade and customs information made publicly available?

Yes

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39 This index was used in Ghana, Netherlands, and Thailand and subsequently refined. The questions and scores therefore differ slightly from the remaining AGRI Index countries. For more information on revisions to the index, see “Appendix: Methodology” in the 2014 AGRI Index report.


Comments


Yes


Yes


Yes


Yes Within 24 hours, by electronic request.

5. Are all fee schedules (for sample collection, testing, certificate, administrative) publicly available?

Yes


Yes


Yes


Yes In consultation with private industry and prioritizing the most important sectors.

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P. Index on legal framework for contract farming. Q. Index on system for establishing public grades

and standards for a widely-traded staple crop. R. Index on access to expedited or alternative



Question Index

Score: 7

Comments


Yes All natural persons (male and female) over the age of 18 years have the freedom to conclude contracts, unless they are legally incompetent (for example, due to a mental illness). All legal entities, including cooperatives and associations, are competent to conclude contracts in their own name. In The Netherlands, the freedom of contract applies to all (legally competent) natural and legal persons in all industries, including contract farming.


No


Yes Under Dutch law the principle of the freedom of contract applies. Therefore as a starting point, parties are free to agree on prices for payment. The principle of freedom of contract is restricted by the standards of good faith and fair dealing (unfair agreements are unenforceable and/or the principle of fairness may impose additional rights and obligations on contract parties). In addition, contracts may not be concluded contrary to mandatory law, public order or good morals. Two of these mandatory rules are the competition rules set out in the

174

Dutch Competition Act ("DCA") and the Treaty on the Functioning of the European Union ("TFEU"). The competition rules prohibit agreements that restrict competition (article 6 DCA and article 101 TFEU) and abuse of dominance (Article 24 DCA and Article 102 TFEU). The prohibition on an abuse of dominance may restrict a dominant company in its freedom to establish prices. Unreasonably high or low prices, as well as discriminatory prices, may constitute an abuse of dominance. Moreover, the prohibition on restrictive agreements prohibits parties at different levels of the production chain to fix the (minimum) resale price that the purchaser will apply when (re)selling the goods. Agreements on a maximum resale price or a recommended a resale price, however, are not allowed. NB: There are some exemptions from the competition rules for the agricultural sector, but these generally do not allow for price fixing.


Yes Article 6:75 of the Dutch Civil Code (“DCC”) provides that non-performance cannot be attributed to the debtor if he is not (i) to blame for it, nor (ii) accountable for it by virtue of law (for example, statutory liability for employees), a juridical act (for example, a contract) or generally accepted principles (common opinion). In cases of force majeure, these conditions are usually fulfilled. The scope of situations that constitute force majeure may be restricted or extended by contract.


Yes Performance Under Dutch law a party to a contract has the right to claim performance as long as performance is (reasonably) possible. See also the answer to Question 4 above. Damages The question of a right to damages is answered in two stages. First, by virtue of Article 6:74 DCC it has to be established whether someone can be held liable for the damages (see also the answers to Question 4 above). Secondly, if it is established that a defaulting party can be held liable, it must be assessed which amount that party is actually obliged to pay. Article 6:95 DCC provides that the damage that has to be compensated consists of (i) material loss and (ii) other disadvantages (immaterial damages). Material loss According to article 6:96 DCC, material loss includes suffered losses as well as missed profits. The following damages also qualify for compensation as material loss: a. reasonable costs to prevent or limit the damage which could be expected as a result of the event which makes someone liable; b. reasonable costs for determining the nature and scope of the damage and of the liable persons; c. reasonable costs for attempts to get satisfied on the basis of a settlement out of court. Immaterial damages (Unless contractually agreed otherwise) Immaterial damages will only be granted as far as the (formal) law recognizes that there is an additional entitlement to a compensation for such damages. The law requires that i) the damages where caused intentional, and ii) that the damages involve (summarized) physical harm or slander. Given these restrictions, the practical applicability of immaterial damage under Dutch law is limited.

175

Injunctions and declaration of law A court can also issue a mandatory or prohibitory injunction, ordering a defendant to perform or to abstain from certain acts. The court, for example, can rule that a party has to make an advanced payment or has to fulfill its obligations under the contract. Another remedy that can be sought from a court is a declaration of law. The court can confirm the existence or absence of a certain legal relationship, for example, it can declare that an agreement was lawfully terminated and therefore a party is not in default. Rescission If a party does not fulfill its contractual obligations, the other party may partly or wholly rescind the contract (unless the breach is of a subordinate nature and does not justify the rescission). A party to the agreement may invoke the rescission itself or may ask a court to do so (to avoid the risk that the rescission was not justified). The consequence of rescission is that both parties are released from their contractual obligations. Obligations that have already been performed need to be undone. Where the performance, by its nature, cannot be undone, it can be substituted by financial compensation.


Yes Article 3:44 DCC provides that a juridical act is voidable when it has been performed under the influence of threat, fraud or abuse of circumstances. Furthermore, article 6:228 DCC provides that an agreement which has been entered into under the influence of an error with regard to the facts or legal rights and which would not have been concluded by the erroneous party if he would have had a correct view of the situation, is voidable if (in short): a) the error is due to information given by the other party; or b) the other party should have provided information; or c) both parties have the same incorrect assumption.


Yes Preliminary relief proceedings Under the Civil Code and the Rules of Civil Procedure, a party may seek specific provisional remedies from the preliminary relief judge of the competent District Court. To initiate such proceedings the claimant must have an 'urgent interest' which cannot await the outcome of a normal proceeding. If there are perishable goods involved it is likely that a Court will agree that the claimant has an 'urgent interest'. The decision of the preliminary relief judge is provisional. It is possible that a judge will decide otherwise in the proceedings on the merits. There is, however, no obligation for the parties in preliminary relief proceedings to commence proceedings on the merits. Quite often they will not do so, abiding by the judgment in preliminary relief proceedings. Given its provisional nature, it is not possible to acquire a constitutive judgment (for example: annulment of a contract) or a declaration of law in preliminary relief proceedings. Seizure of perishable goods Dutch law does not provide for specific rules regarding expedited sale of seized perishable goods. The general rules concerning seizure apply.

176

To impose a prejudgment attachment, permission is needed from the judge in preliminary relief proceedings. The permission will only be granted if the claim in the principal action is already pending or if the claim will be brought before a court soon. The person seeking to impose a prejudgment attachment on perishable goods can accelerate his case by instituting proceedings before the judge in preliminary relief proceedings. If there is an executory attachment on perishable goods, Dutch law does not provide a specific exception for the term that has to be taken into account before the sale of the attached goods can take place. The normal term is about four to five weeks. However this term can be reduced if both parties agree to this or if the judge in preliminary relief proceedings determines so on the request of one of the parties. Until a judge determines that the seized perishable goods can be sold, the judge in preliminary relief proceedings can, after hearing of or duly summoning the debtor and on request of the seizer, appoint a suitable person to take care of the perishable goods and/or to continue the business operations. Therefore, it is possible by law for a financial institution to ask a judge to have crops harvested and sold, though this does not happen often in practice.




Comments


Yes There are a limited set of public grades and standards applicable in the Netherlands. Most grades and standards are developed by the private sector. Public grades and standards for marketing certain agricultural products are determined at the EU-level and harmonized across EU members. European law contains legislation (both Regulations and Directives) regarding grades and standards within the agri-food sector on product quality characteristics. Such marketing standards are intended to serve multiple purposes including facilitating trade, informing consumers, and maintaining quality. The EU currently mandates grades and rds to set marketing classifications for 14 types of products, including most fruits and vegetables. There are also minimum standards for a greater number of products. EU grades and standards for additional products used to exist, but the policy decision was made to leave the development of grades and standards to the private sector. Many companies still stipulate in their contracts that the old EU grades and standards must be met. Individual EU member states may implement their own grades and

177

standards requirements in addition to the EU regulations, where their requirements are more stringent.


Yes Most EU grades are performance-based. See also the answer to question 3.

56. Are there grades segmenting the most widely traded staple crop in the Netherlands that are based on quantifiable attributes (e.g. weight, size, shape, density, firmness, color, taste, odor, maturity, blemishes, moisture content)?

No There are 14 product categories with mandatory EU grades. These EU grades apply to trade in the Netherlands. The EU sets minimum quality requirements (such as free of visual defects, illnesses, fresh looking, no abnormal external moisture, odor or color) and are subsequently divided in classes (for example Class I is free of all defects, perfect coloring and very fresh/firm and Class II may contain minor imperfections and a little less firm, yet still fresh). These 14 product categories do not include staple crops such as wheat or potato (the focus of this Grades and Standards Index). Respondents noted that there are no public grades in the Netherlands for wheat trade. Grades are determined by the private sector and are based on either the classification system used in the wheat’s country of origin or on commonly-used classification systems. For example, France, and Germany, the origin of more than half of the wheat imported into the Netherlands, each have their own wheat trade classification system. In practice, industry representatives noted that wheat trade in the Netherlands is typically divided into hard and soft wheat, and then sorted by quality (high/average/low). Quality may be determined on the basis of protein or gluten content, or on the basis of contamination.

57. Are public standards consistent with good scientific practices and with guidelines issued by international standards-setting bodies (e.g. Codex Alimentarius, ISO)?

Yes Public standards for food safety The EU and its Member States participate in Codex Alimentarius. In the Netherlands, the Ministry of Economic Affairs and the Ministry of Health are responsible for participation in this international forum. European regulations regarding agriculture products are based on the Codex Alimentarius. ISO (private standards) ISO is a private standard, but it is widely used and also referred to in EU directives and regulations and in Dutch laws. ISO primarily concerns food safety standards.


Yes Most public grades and standards derive from EU law, which results from interaction between the European Parliament, Council, and Commission. Sector representatives can and do lobby for their interests. The rules for the decision-making process and the involvement of market participants in this process are laid down in treaties (such as the Treaty on the Functioning of the European Union) and cover every area in which the European Union acts, including agriculture.

59. Is there a dedicated, competent regulatory body in charge of grades and standards, or coordinated efforts where

Yes Directives and regulations regarding grades and standards are primarily issued by the European Parliament and the European Council. The Council may delegate legislative authority to the European Commission.

178

multiple agencies are involved? Within the Netherlands, the Netherlands Quality Control Bureau Fruit and Vegetables (KCB) is responsible for monitoring compliance of EU-established public grades and standards. The KCB’s role includes inspecting on quality issues as well as for food safety.

60. Are there sufficient guidelines and regulations issued with respect to grades and standards, and are these guidelines and regulations made accessible to all market participants?

Yes The European regulations which contain grades and standards are detailed and concrete. They are published on the website of the European Union: http://www.eur-lex.eu.


Yes Member states of the European Union are responsible for carrying out inspections on a regular basis and in cases where non-compliance with European grades and standards is suspected. Monitoring and enforcement at EU-level Monitoring and enforcement at the EU-level concerns grades and standards for public health and food safety through the Food and Veterinary Office ("FVO") and the European Food Safety Authority ("EFSA"). • The FVO supervises the Member States’ compliance with European

food laws through an inspection program that identifies priority areas and countries for inspection.

• The EFSA monitors food safety and assesses risks associated within the food chain. The EFSA plays an advisory role in risk management and policy-making.

Monitoring and enforcement in the Netherlands The Netherlands Food and Consumer Product Safety Authority (Nederlandse Voedsel- en Warenautoriteit, or NVWA) monitors food and consumer products to safeguard public health and animal health and welfare. It controls the whole production chain, from raw materials and processing aids to end products and consumption. The NVWA has delegated monitoring and enforcement of agriculture and food grades and standards to sector-specific supervisors, such as: • The Quality Control Bureau (Kwaliteits Controle Bureau, KCB),

appointed by the Ministry of Economic Affairs. KCB is an independent governing body monitoring the quality of fresh fruit and vegetables traded in the Netherlands. It conducts import and export inspections of fresh fruit and vegetables, cut flowers and potted plants/ornamentals.

• The Dutch General Inspection Service for Agricultural Seed and Seed Potatoes (Nederlandse Algemene Keuringsdienst voor zaaizaad en pootgoed van landbouwgewassen, NAK) that carries out the legal duty to inspect seed and seed potatoes, by order of and under supervision of the MINEZ and the NVWA.

• The Netherlands Inspection Service for Horticulture (Stichting Nederlandse Algemene Kwaliteitsdienst Tuinbouw, Naktuinbouw), which promotes and monitors the quality of produce, processes and chains in horticulture. The main focus is on seed and propagating material, of national and international origin. Naktuinbouw is regulated by MINEZ and the NVWA.

Finally, most laboratories are accredited according to ISO 17025 – this

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Question Index

Score: 8

Comments


Yes The Netherlands is divided into eleven geographic districts, each with its own District Court. Each District Court is comprised of a number of 'sectors', each dealing with a particular type of case: commercial matters, criminal matters, family matters, etc. The District Court is generally constituted of three judges and parties must be represented by an attorney. Claims involving only EUR 25,000 or less must be brought before the cantonal division of the District Court (the same applies to certain types of disputes allocated to this cantonal division, irrespective of their value, for example, disputes regarding lease and employment matters). Within the cantonal division, cases are heard by one judge and a party may litigate in person before the cantonal division without being represented by an attorney.


Yes Alternative mechanisms to the formal court system include: (i) arbitration, (ii) mediation and (iii) binding-opinion proceedings. Arbitration Dutch arbitration law is contained in Articles 1020 to 1076 Dutch Code of Civil Procedure ("DCCP"). These articles are inspired by the UNCITRAL Model Law of 1985 and are quite detailed in order to provide adequate procedural rules for arbitration proceedings not governed by the rules of an arbitration institute ('ad hoc' arbitration). The majority of arbitrations in the Netherlands are governed by the rules of a specific arbitration institute. In their contract or in a separate arbitration agreement, parties may, for example, refer to the arbitration rules of the Institute for Agricultural Law in Wageningen (Instituut voor Argrarisch recht, or IAR). This IAR has an arbitration tribunal and its own set of arbitration rules. The tribunals may hear disputes with respect to renting farms or farmland, and includes a panel with one lawyer, two farmers, and one land owner.

is not government regulated.

62. Does the government implement a weights and standards system to ensure uniformity of measurement across all food and agriculture-related commerce?

Yes The European directive on measuring instruments (2004/22/EC) applies to all devices and systems with a measuring function. In annexes to the directive rules are set out per type of instrument, for example, automatic weighing instruments (MI-006), material measures (MI-008) and dimensional measuring instruments (MI- 009). This directive is worked out in detail in the Dutch Metrology Act (Metrologiewet). In accordance Metrology Act, the government has appointed several private-law entities to supervise compliance with the Act (for example KEMA www.kema.nl, or Kalibra International B.V. http://www.kalibra.nl). The inspectors of these appointed entities visit establishments and businesses which use measuring instruments to inspect the measurement instruments used. Inspectors have the authority to impose penalties if they find an infringement, such as charging fines and seizing goods.

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Mediation Parties may agree on mediation to settle their dispute. Moreover, all Dutch courts have the ability to refer the parties to mediation. A court should consider whether a case would be suitable for mediation and, if so, inform parties about the possibility of mediation. Binding-opinion proceedings Alternatively, parties may decide to settle their dispute in binding-opinion proceedings. In such a case, parties commit to comply with the advice given by the advisor(s) appointed by parties.


Yes When applicable, standard Dutch contract law is applied in preliminary relief proceedings (see the answer to Question 7 of Section A of this questionnaire). In alternative mechanisms to the formal court system, the arbiters/mediators will apply the standard rules if parties have not agreed otherwise. If parties have agreed on arbitration governed by the rules of a specific arbitration institute, the rules of that arbitration institute apply. The rules of the Netherlands Arbitration Institute (NAI), for example, provide that, in national arbitration cases, the arbitral tribunal shall decide as 'amiable compositeur', unless the parties have stipulated by agreement that it should decide in accordance with the rules of law. In international cases, the NAI rules state that the arbitral tribunal shall make its award in accordance with the rules of law unless the parties agreed to authorize it to decide as amiable compositeur. The IAR rules (Article 35) provide that the arbitral tribunal decides as good en equitable men's unless the parties have stipulated by agreement that it should decide in accordance with the rules of law. See also the answer to Question 2 above regarding IAR.


Yes

4.a. Are the costs entailed typically less than that of the

traditional court system?

No This depends on the fees of the (specialized) arbitrators, mediators or advisors. In general, arbitration is more expensive than traditional civil proceedings in The Netherlands, depending on the dispute, as parties must pay for the judge’s and court’s time. The costs of expedited alternative dispute resolution proceedings are in general also higher than those of the traditional court system.


No

5.a. If YES, does this threshold amount pose a barrier to claims

brought by small or medium-sized agribusinesses?

-

93. Are expedited or alternative mechanisms typically faster

Yes The duration of arbitration, mediation, and binding opinion-proceedings may vary, but they are generally shorter than regular civil court

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than the traditional court system, with streamlined and simplified procedures?

proceedings.

94. Are expedited or alternative mechanisms readily available outside of Accra?

Yes In arbitration proceedings, any place may serve as seat of arbitration, if agreed by the parties.


Yes A judge can only examine four items in the appeal of an arbitral ruling: (1) is the arbitration sentence signed by the arbiters, (2) was it stipulated in the contract that arbitration is applicable, (3) did the arbiters hear the parties, and (4) is it not against good morality. One cannot appeal a ruling directly on its merits.

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M. Time, cost, and procedures for business registration and licensing of a mid-sized staple grain farm. Requirements may include national or local trading licenses, chemical storage requirements, workplace or employee registration, environmental permits, and company registration.

N. Index on access to business registration information.

Case Study Farm Crop Peanuts Farm size 7 hectare Location Eastern Region Legal Form US Annual Revenue US$ 7000 Land tenure 50 year lease Market Farm gate, local

market

Senegal

Procedures, Time, and Cost to Start-up a 7-hectare Farm41

Note: In the case study, there are no requirements to obtain a license for the production of cereals (millet, sorghum, or maize) for wholesale. It is sufficient to be in good standing with the tax and lands office (Impots et Domains) for the farm’s annual payment of land tax, income tax, and Statement of Staff. Only farmers producing or multiplying seed would require additional procedures to declare production and register with the regional Ministry of Agriculture (DRDR). In the Kaolack region agricultural production is predominantly rain-fed, therefore there are no permissions needed to obtain water. For chemical products (fertilizer and pesticides), the farmer must take all provisions to limit use to products that are listed in the national catalogue (Article L82 in the Environment Code).

No. Procedure Time (days) Cost

(US$)42 Agency

1 Obtain a residence certificate The residence certificate costs CFA 300-600 depending on the municipality. The police report costs CFA 200. The total cost is typically CFA 2,000 which includes the cost of making photocopies of the certificates.

1 4

Mayor or President of the

Communauté rural (PCR)

2 Obtain a Police Report (Casier Judicaire) A notarized police report (casier judicaire) is required to form a SUARL when filing through a notary. During the one-stop registration, it may not be requested.

1 Included in previous

procedure Tribunal

41 Data highlighted in yellow is based on incomplete/unconfirmed data 42 Exchange rates as of January 13, 2014 (CFA 479.82 per US$). Costs are rounded to the nearest dollar.

183

A Declaration of Honor (Declaration sur l’honneur), witnessed by the notary, may also serve as an affidavit of the entrepreneur’s clean record.

3 Open Bank Account and Deposit Capital in a Bank Constitution of capital can occur in one of two ways. • The entrepreneur deposits the minimum capital of CFA 1

million43 with the notary’s clerk. This money is held in escrow until the registration process is complete. The notary’s office will subtract ~CFA 400,000 in fees and return the remainder to the entrepreneur for the entrepreneur to deposit in a bank account.

• Alternatively, the entrepreneur can deposit the minimum capital in a bank account before starting the registration process. The funds remain frozen until the notary provides a letter releasing the funds after the business is established. At that time, the entrepreneur pays the notary for their fees.

In either case, the bank account is opened by the entrepreneur, not by the notary. Required documents: • A bank account application • Company registration certificate from the Trade Register

(RCCM) • Proof of current address by the public authority

(residence certificate) or a lease contract List of authorized persons who may operate the account; national card or passport of each person; and 2 ID photos of each person.

1 0 Bank

4 Preparation of Notarial Deeds and Incorporation of the Company The use of a public notary is required to form a limited liability company (SUARL for one associate and SARL for multiple associates). The entrepreneur must provide the notary with: • Residence certificate, previously obtained from the Mayor

or President of the Rural Council • Police report (caise judicaire), obtained from the Tribunal

(local court), or in the case of non-Senegalese citizens, a notarized Declaration of Honor (Declration sur l’honneur), attesting to their clean record

• 2 photocopies of the entrepreneur’s national ID card • Company information: name of company; location/address

of company; capital and distribution of shares; address and contact information of all associates; corporate purpose; manager name and information.

7 833 Public Notary

43 As of May 2014 (after the assessment period), the minimum capital for a SARL in Senegal was reduced from CFA 1 million to CFA 100,000. Senegalese lawmakers voted in April 2014 to reduce the minimum capital requirement. The decision was based on a January 2014 review of the OHADA Uniform Act on Commercial Companies and General Interest Groups, which allowed each OHADA country to establish their own minimum capital requirements.

184

The police report may not be required if starting a business at the one-stop shop (guichet unique) through APIX in Dakar. Outside of Dakar, there is no one-stop shop as such – the notary typically conducts all registrations on behalf of the entrepreneur. The fees for each step, as well as the notary’s fee (honorarium), are included in the CFA 400,000 costs to establish a business. Notary fees are legally regulated by the Decree 88-1713 (December 20, 1988). A detailed list of all fees to start a company is available on the Senegal E-Regulations website http://senegal.eregulations.org/show-step.asp?l=fr&mid=48&rid=28. Steps to form a company: 1. Entrepreneur provides a residence certificate, police

report, and company information to the notary. 2. Notary checks the company name at the Trade Register

(RCCM). If the name is not unique, the notary informs the entrepreneur to choose a new name.

3. Constitution of capital. Deposit minimum capital. 4. The notary drafts the deed of incorporation (actes

notaires) which includes information on the management, finances, and shareholding structure of the Societé. The notary also produces a compliance statement (Declaration de conformité) to evidence that the company capital has been deposited. The entrepreneur must be present for this step.

5. The notary registers the company statutes and declares the company to the tax authority (Domaines). Registration typically can be completed within one business day. (Cost: CFA 25,000 for minimum capital of CFA 1 million).

6. The notary registers the SUARL at the trade register (Registre de commerce et du Credit Mobilier) at the Tribunal (regional court) and protects the company name by registering it with OAPI (West African Intellectual Property Office). This typically takes one business day. (Cost: CFA 10,090 for RCCM and CFA 20,000 for OAPI).

7. Notary obtains a NINEA (national identification number of companies and associations). The APIX regional offices facilitate this process by submitting the documents to the Statistics Office and the tax authority (Impots et Domains). When done through APIX, the NINEA can be obtained in 48 hours. (Cost: CFA 2,000).

8. Notary announces the company in the legal gazette (la Publication au Journal d’annonce légale).

At this point the company is fully functional. Should the company hire staff, a Statement of Staff (Declaration d’etablissment) must be made to the relevant labor authorities. Outside of Dakar, such as in St. Louis or Kaolack, the entrepreneur can obtain the forms at the Chamber of Commerce but must be submitted individually to each office.

185

5 Obtain Statement of Staff form (Declaration d’etablissement) Forms are obtained at the Chamber of Commerce, filled out by the concerned persons, and stamped by the Labor inspection, IPRES (Pension/Retirement Fund Institution of Senegal), and the Social Security Office. The Social Security Office holds the management contract and the contracts for each of the 5 full-time workers.

2-3 11 Chamber of Commerce

6 Registration of the employer at the Labor Inspection Required Documents: 1. Letter of transmission addressed to the Regional Labor Inspector 2. Declaration of Property (5 originals) 3. Declaration of Worker Movement 4. Labor Contract (5 copies) 5. Notice of registration with NINEA (company ID number) (photocopy)

7-10 0 Labor Inspection

(Inspection du Travail)

7 Registration at the Office of Social Security

2-3 0 Social Security

Office (Caisse de Securité Social)

8 Registration of the Workers’ Retirement Institute Required Documents: 1. Written membership application 2. Photocopy of the registration certificate from the Trade Register 3. Notary deed and a photocopy of the statutes 4. Declaration of Establishment authorized by the Labor and Social Security Inspector 5. Labor contract and a declaration of movement authorized by the labor inspector

5-7 0 Workers’ Pension

Fund Institute (IPRES)

N/A Environmental Impact Assessment An environmental impact assessment may be required, depending on the size and activities of the farm. Farms using pesticides may require an EIA to ensure that they are not contaminating the water and environment. Large, rain-fed cereal farms, even 50 hectares, would not require an EIA. The impact assessment submitted to the administration must be undertaken by a cabinet approved by the Ministry of Environment. The analysis must contain information in decree number 2011-282. Approval is also required from the president of the regional council and of the rural community one month after the results are obtained. The cost of the study depends on the size of the project. In this case is a small-scale project requiring a basic environmental study, which can be performed by a junior consultant in ten days.

2 weeks from the date of

receipt of the study. In the

event of further

information, 1 month from the date of

receipt of the supplementary

study

0 Ministère de

l’environnement and Rural Council

186

Relevant Laws: Ministerial Decree 2001-01 of Jan 15, 2001, and Decree 2001-282 of April 12, 2001 on the implementation of the Environmental Code.




4 Comments


All of the information necessary to register with the Trade Register is available at APIX and at the regional Chamber of Commerce offices (such as in Kaolack)

on paper. 35. Are registration documentation and

information on fees available online?

Yes

Registration documents, information, and resources on business registration steps at:

www.senegal.eregulations.org www.commerce.gouv.sn

www.servicepublic.gouv.sn www.apix.sn www.cciak.sn

http://www.senegal-entreprises.net/registrement.htm

36. Is registration possible in every state/province?

No

In newly created regions (Sédhiou, Kaffrine, and Kédougou) entrepreneurs must go to Kolda,

Tambacounda, and Kaolack regions respectively to access public services that facilitate the process. • Public notaries are not located in every region.

Notaries are located in 10 of 14 regions. • The Chamber of Commerce, Industry, and

Agriculture (CCIAK) or equivalent administrative entity is located in 11 regions.

• APIX is headquartered in Dakar. APIX has a staff member in 5 regions who sits within the CNCAS

bank. APIX is currently expanding their network to additional regions.

• The tax and land authority, Impots et Domains, is located in all regions. It is necessary to go to the

regional capital to make the application. 37. Are registration steps the same regardless of


Yes

Registration steps for a SARL or SUARL are the same regardless of business size. Any company with

employees must complete a Statement of Staff and register with the appropriate labor authorities.

Registration costs with the Trade Register (RCCM) depend on the amount of authorized capital of the

company.

Registration steps differ by the type of company – a limited liability company (SUARL or SARL) versus a

sole-proprietorship (enterprise individuelle)

187


Yes

The registration steps are the same. However, to obtain the initial administrative records, foreigners must bring their consular cards or ID cards from

their country instead of the Senegalese ID card. Non-Senegalese citizens may also have to go through the Court of Appeals of Dakar to obtain a judicial file

(caise juridique) before presenting the documents to register at the Trade Register (RCCM).

188


M. Time, cost, and procedures to obtain operational licenses for a seed supplier. Requirements may include import license, seed dealer license, license for storage facilities, national or local trading licenses, and inspections.

N. Time, cost, and procedures to register a new proprietary seed variety.



Type of Seed Hybrid Rice Location Dakar Ownership Domestic, non-state-owned

enterprise


No. Procedure Time (days) Cost (US$) Agency N/A N/A Application for authorization to import seeds

Each time a seed company wants to import a shipment of seed, they must apply to the Ministry of Agriculture and Rural Equipment (MAER). • Applications must include the amount, variety, and origin of the seed shipment, as well as the applicant’s information. • The application is made to MAER. The Seed Division (DISEM) and the Directorate of Plant Protection (DPV) review the application. Per Article 22 of Law 94-038 “The Seed Law,” imported seed must comply with phytosanitary standards set by DPV and with quality standards set by MAER. • The Ministry of Commerce, as the authority on domestic and international trade, gives the final approval for import based on the recommendation of the MAER. • Applications for import of seed are not required if importing from within the Economic Community of West African States (ECOWAS).

21 0

Ministry of Commerce (Ministère du

Commerce) ; Seed Division (Division

des Semences, DISEM) and Plant

Protection Department (Department Protection des

Vegetaux, DPV) of the Ministry of Agriculture and Rural Equipment

(Ministère Agriculture et

Equipement Rural, MAER)

1 Declaration to request approval for the distribution and sale of seed in Senegal A request is sent to the Ministry of Agriculture (MAER) and is coordinated by DISEM. Once the application is received and processed, inspections are started at the regional level. (See the following procedure).

41 days. (14 days for initial application; 7-

10 days for inspection;

and 7-30 days for issuance of certificate

0

DISEM and Regional

Directions for Rural

Development (Directions

Régionales de Développement

189

By law, importers and distributors must keep a record of all purchases and sale of seeds. Sale contracts and invoices must list the particulars of the seed lot, including information contained on the label, as specified by law. (Articles 42-45 of Decree 97-616). Controls may apply every time the distributor or retailer buys a new stock of imported seed. In practice, however, checks only occur when the seed lot is first imported to Senegal at the airport or seaport. Once the seed has entered Senegal, inspections are rare. There are few controls on the sale of domestically-produced seed, because DISEM already monitors and certifies seed produced in Senegal. Locally-produced certified seed has already undergone extensive controls during production. For instance, DISEM, through the regional Ministry of Agriculture office (DRDR, Directions Régionales de Développement Rural) conducts a minimum of 3 field inspections during rice seed production.

after inspection)

Rural, DRDR) within the MAER

2 Inspection following the declaration of the distributer and sale of seed in Senegal DISEM is entitled to check the conformance of the supplier’s facilities and marketing procedures. The regional Ministry of Agriculture office (DRDR) may verify and send inspection results to national office (DISEM). Inspections include sampling and laboratory analysis. The inspection is conducted to confirm the source of the seeds being marketed and to confirm that the vendor sells certified seed. In practice, inspections and sampling are rare. Respondents noted that DRDR will only conduct physical inspections if complaints are received about the vendor. After a favorable inspection, the agreement for the distribution and sale of seeds is granted.


procedure 0 DRDR, DISEM

3 Obtain a Commerce Card (Carte du Commerçant) All traders must obtain a Carte du Commerçant which acts as an identity card for the business. The application form for the Carte du Commercçant is available at the Chamber of Commerce (CCIA), which has regional offices. The Centre de Formalites d’Enterprise (CFE) at the CCIA submits the form on behalf of the applicant to the Ministry of Interior Commerce and coordinates all requirements. The documentation and fees include: • Photocopy of business registration certificate (from the

Registre de Commerce) • Photocopy of national ID card or passport • 1 identity photo • The application forms obtained from the CCIA – CFA 3,500 • Stamp fee from the Tax and Lands Office (Impots et

Domains) – CFA 2,000 • CCIA fee of CFA 10,000, which includes the cost of printing

4 32

Chamber of Commerce (Chambre de Commerce

d’Agriculture et d’Industrie, CCIA) on behalf of the

Ministry of Interior

Commerce (Ministère du Commerce Intérieur)

190


NOTE: There is no specific timeline in place to register a new cereal seed variety. For example, only two varieties of rice have been released in the past 20 years (most recently in 2009), which makes it impractical to define the typical timeline for varietal testing and release. Respondents noted that there are a number of new varieties in the pipeline that should be released in the next several years. The new varieties will feature favorable characteristics such as drought and cold tolerance and disease resistance. The procedures below outline the procedure to release a new rice seed variety.

the badge (CFA 5,000) The Carte du Commerçant is issued in Dakar and the time to obtain the card depends on the time to transmit the card from the Ministry of Commerce Interior to the regional CCIA office. The applicant goes once to the CFE to apply and pay the fees, and a second time to pick up the Carte. The Carte du Commerçant is valid for 3 years and can be renewed for CFA 5,000 upon delivery of the expired card.

4 Obtain an Import/Export Card All firms conducting international trade must obtain a Carte du Import/Export. Applicants must be a natural or legal person and have a Carte du Commerçant. The application form for the Carte du Import/Export is available at the regional CCIA office. The Centre de Formalites d’Enterprise (CFE) at the CCIA submits the form on behalf of the applicant to the Ministry of Interior Commerce and coordinates all requirements. Required documents: • Photocopy of National ID card, passport, or driver’s license • Photocopy of registration certificate from the Trade

Registry • 1 identity photo • Certified copy of NINEA (company registration number) –

CFA 2,000 • Stamp fee from the Tax and Lands Office (Impots et

Domaines) of CFA 10,000 • Application forms from the CCIA – CFA 3,500 • Receipt of payment to COSEC (Senegal Shippers’ Council) –

CFA 10,000 • Cost of printing the card (CFA 8,000) • CCIA fee (CFA 10,000) The Carte du Import/Export is issued in Dakar and the time to obtain the card depends on the time to transmit the card from the Ministry of Commerce to the regional CCIA office. The Carte du Import/Export is valid for 4 years and can be renewed for the same cost of the initial application.


procedure 91

Chamber of Commerce

(CCIA) on behalf of the Ministry of

Interior Commerce


191

Step Details Time (days) Cost (US$) Agency

Application All registration requests for new seed varieties are subject to review by the National Advisory Committee for Seed and Plants (CNS). The CNS is chaired by the Minister of Agriculture and is composed of high-level government, research, and private-sector representatives. Together, the Ministry of Agriculture Seed Vision (DISEM) and the Senegalese Institute for Agricultural Research (Institute sénégalais de recherces agIcoles, ISRA) act as a Secretariat. The applicant may either: • Submit a request DISEM, which will notify ISRA • Develop the variety in partnership with ISRA. ISRA will

then interface with the CNS to make arrangements for review and release

Experiments and field trials on the variety are conducted by ISRA and/or any other organization with specific approval. All costs are borne by the applicant, on terms agreed with ISRA (97.602 Article 2). By law, ISRA has a monopoly on seed variety development research. In rare cases, a private organization may also be authorized to do the research. Requirements to be authorized to produce seed are listed in Decree 97-616 and in technical regulations for specific crops. Few other organizations have been approved to conduct seed variety development research – these include AfricaRICE and a few large agribusinesses. Once the application is submitted, the CNS Secretariat receives the file, checks its completeness, and notifies the breeder of any deficiencies or non-compliance in the application. Requests are evaluated based on the country of origin. Field trials are not required for varieties previously released in another ECOWAS (Economic Community Of West African States) country; the breeder need only provide a statement of culture (une Déclaration de culture). After the dossier is reviewed, arrangements for field trials are made. Field testing is conducted by ISRA or in rare instances by the organization’s breeder. In these cases, the variety is developed on the entity’s land for internal use and will not be sold or marketed. Vegetable seed varieties are not subject to control by the CNS and need not be listed in the National Catalogue of Seed Varieties. Seed companies may obtain varieties from international suppliers and conduct their own validation tests or research. The Horticultural Development Center (CDH) of ISRA conducts independent varietal research. Producer associations also do agronomic testing, although they have varying levels of organization and lack the technical capacity to do formal trials. Such organizations include:

60-90 0

DISEM, National Advisory

Committee for Seed and

Plants (Le Comité

National Consultatif des Semences et des Plants,

CNS)

192

• CNCFTI (National Forum Committee on Industrial Tomato Value Chain). A technical forum led by SAED (Senegal River Delta Development and Exploitation Company) and includes producer representatives, suppliers, and manufacturers decided to approve the seed.

• The Producers Association of the Vegetable Growers of Fass Boye for carrot seed

• The Onion Producer Association of the Senegal River Valley (APOV) and the Association of Onion Quality (APOQ)

• The Maize Growers United Federation (FMU), Kaolack Association for Maize Seed, and Growers Association of the Niayes (AUMN) conduct informal tests and give written results

Relevant Laws: • Decree 60-121, establishing a quarantine of imports and

exports of plants, plant parts, and plant products entering or exiting Senegal

• Decree 97-602 establishing a national catalogue for plant varieties

• Decree 97-603 establishing a National Seed Committee Field Testing


Number of Seasons Minimum 4 cropping seasons (2 rainy and 2 dry seasons)

Number of Testing Locations 1 Is the Value for Cultivation and Use (VCU) test required? Yes

Number of Seasons 2 Number of Testing Locations 10 Can VCU test be undertaken simultaneously with the DUS test? Yes

DUS The DUS (DHS) test must be done at the official controlled location such as the ISRA laboratory or test plots under controlled conditions. ISRA determines the test protocol for the DUS testing. The protocol for irrigated rice testing includes 4 trials over 2 years. This allows for 2 trials during the rainy season and 2 trials during the dry season. Other crops have different protocols and timelines; for instance upland crops only have one growing season per year. VCU The VCU (VAT) test can be done at the level of the farm of the sponsor. Standard test plots for the VCU test are 4 x 3 meters at 3-4 random testing sites. The number and location of test sites depend on the agro-ecological conditions that the seed is designed for. For rice, these sites will be chosen throughout the Senegal River Valley.

2-3 years

CFA 28,200,000 – CFA

37,600,000

Cost estimate includes 20 rice trials (4 for DUS

plus 16 for VCU) at a cost of US $3-4,000 per trial. These

costs include the costs of seeds

and inputs; production

costs; compensation to local farmers for the use of their

ISRA or DRDR

193

Testing protocol under ISRA for a rice variety includes 4 sites x 2 seasons (rainy and dry) x 2-3 years for a total of 16-24 trials.

land (VCU trials only); fuel,

transport and per diems for field visits by researchers.

Each field visit costs roughly CFA 120,000

per researcher per day. At a minimum, 40

field days would be required

(minimum 2 per trial) for the

researcher to evaluate the test

plots. Technical Review

ISRA validates all results, produces an evaluation report, and sends the report to the CNS. The CNS committee of experts (crop-specific) may conduct follow-up examinations or ask for more data, which may require additional field trials. The CNS may send the seed to another researcher or institution to verify the agronomic qualities and to validate the test results through additional seasons of testing.Z

2 months – 3 years,

highly variable


procedure ISRA


CNS receives the evaluation report from ISRA and convenes a meeting. The CNS release meeting takes two days and includes a presentation on the new variety(s) and a discussion of the testing results among all stakeholders. The CNS meets on request to evaluate new varieties for release. Convening a meeting can take 2-6 months, depending on availability of the CNS members and the relationship between the person making the request and the CNS. The cost of convening the CNS covers per diem and travel costs for 15 participants for 2 days at CFA 75,000 per day. Registration of a variety is made by official decree of the Minister of Agriculture, on the recommendation of the CNS. Registration is valid for ten years. Registration may be renewed thereafter every five years by order of the Minister of Agriculture, at the request of the breeder and the concurrence of the CNS. (Decree 97-602, establishing a national catalogue for plant varieties). A Ministerial Decree inscribes the variety in the National Catalogue. Listing in the catalogue can take up to one month. However, the breeder may begin marketing the new variety as soon as it is officially released at the CNS meeting.

2-6 months 2,250,000 CNS

194


N/A

Total Senegal receives no score on the seed variety registration indicator. Private companies in Senegal are legally restricted from introducing new seed varieties for commercial purposes: only the national agriculture research organization (ISRA) may do so. Restrictions on seed variety development contribute to the fact that only two new rice varieties have been released in Senegal in the past twenty years. Since companies may not develop new seed varieties for commercial purposes, Senegal received a “no practice” on this indicator, which results in no score.



No Only the breeder agency is authorized to conduct such operations. This data is the responsibility of ISRA or any other organization authorized by the state to do this work.


Yes

If the seeds come from an ECOWAS country, you only need a statement of culture. Senegal is in negotiations to facilitate seed trade with the OECD.


ECOWAS

21. Is Senegal party to a regional agreement with respect to common procedures for variety testing, registration, and/or release that is effectively implemented in practice?

Yes ECOWAS Law C/Reg4/05/2008 on the « Harmonization of quality control, certification, inspection, and sale of seeds » within the economic community.


195


M. Time, cost, and procedures to obtain operational licenses for a fertilizer supplier. Requirements may include import license, fertilizer dealer license, licenses for storage facilities, environmental permit, national or local trading licenses, and inspections.

N. Index on the legal and institutional framework for the fertilizer sector.




Location Dakar Ownership Domestic, non-state-owned

enterprise



1 Obtain a Commerce Card (Carte du Commerçant) All traders must obtain a Carte du Commerçant which acts as an identity card for the business. The application form for the Carte du Commercçant is available at the Chamber of Commerce (CCIA), which has regional offices. The Centre de Formalites d’Enterprise (CFE) at the CCIA submits the form on behalf of the applicant to the Ministry of Interior Commerce and coordinates all requirements. The documentation and fees include: • Photocopy of business registration certificate (from the

Registre de Commerce) • Photocopy of national ID card or passport • 1 identity photo • The application forms obtained from the CCIA – CFA 3,500 • Stamp fee from the Tax and Lands Office (Impots et

Domains) – CFA 2,000 • CCIA fee of CFA 10,000, which includes the cost of printing

the badge (CFA 5,000) The Carte du Commerçant is issued in Dakar and the time to obtain the card depends on the time to transmit the card from the Ministry of Commerce Interior to the regional CCIA office. The applicant goes once to the CFE to apply and pay the fees, and a second time to pick up the Carte. The Carte du

7 32

Chamber of Commerce (Chambre de Commerce

d’Agriculture et d’Industrie, CCIA) on behalf of the

Ministry of Interior Commerce (Ministère du

Commerce Intérieur)

196

Commerçant is valid for 3 years and can be renewed for CFA 5,000 upon delivery of the expired card.

2 Obtain an Import/Export Card All firms conducting international trade must obtain a Carte du Import/Export. Applicants must be a natural or legal person and have a Carte du Commerçant. The application form for the Carte du Import/Export is available at the regional CCIA office. The Centre de Formalites d’Enterprise (CFE) at the CCIA submits the form on behalf of the applicant to the Ministry of Interior Commerce and coordinates all requirements. Required documents: • Photocopy of National ID card, passport, or driver’s license • Photocopy of registration certificate from the Trade

Registry • 1 identity photo • Certified copy of NINEA (company registration number) –

CFA 2,000 • Stamp fee from the Tax and Lands Office (Impots et

Domaines) of CFA 10,000 • Application forms from the CCIA – CFA 3,500 • Receipt of payment to COSEC (Senegal Shippers’ Council) –

CFA 10,000 • Cost of printing the card (CFA 8,000) • CCIA fee (CFA 10,000) The Carte du Import/Export is issued in Dakar and the time to obtain the card depends on the time to transmit the card from the Ministry of Commerce to the regional CCIA office. The Carte du Import/Export is valid for 4 years and can be renewed for the same cost of the initial application.


procedure

91

CCIA, on behalf of Ministry of Interior

Commerce

N/A No licenses/permits No import license or permit is required to import chemical fertilizer. There are no fertilizer-specific laws or regulations. Fertilizer is regulated as general commerce. As is the case for general commerce, Importers and exporters of fertilizers must only hold a Carte du Commercant and a Carte du Import/Export, issued by the Ministry of Commerce. (See following procedures). When a shipment of fertilizer arrives at the Port of Dakar, it may be inspected by Ministry of Agriculture technical personnel. Inspectors may sample and do analysis to ensure that the

N/A N/A Ministry of Agriculture; DRDR

197




No

Senegal does not have a specific fertilizer law. Fertilizer is regulated as general commerce. There

are general trade laws that cover the import/export, distribution, and sale of products, including

agricultural inputs. These laws can be applied to fertilizer, but in practice are not.


s. Set truth-in-labeling guidelines? (e.g. fertilizer bag labels must includes the Netherland’s official language(s), net weight or volume, “guaranteed analysis” of minimum levels of nutrients claimed, directions for use, and health and safety precautions)

N/A Fertilizer sold through the subsidy program must list the contents, origin, and net weight on each bag label.

nutrient content matches manufacturer claims on the label. Inspections include minor fees and take up to one week. In practice inspections do not always occur. • The importer must provide a Certificate of Analysis from

their international supplier, issued by a private certification company.

• Customs import costs are 7.9% of CIF value of the shipment; 5% in Customs duties and the remainder in various charges (0.5% ECOWAS levy, 1% UEMOA solidarity levy, 0.4% COSEC fee, and 1% statistical levy). These costs exclude freight, port and terminal handling, customs broker, cargo transport, and inspection fees.

Once fertilizer has entered Senegal it may move freely. No distribution license or permit is required. Regional Ministry of Agriculture offices (DRDR) have the authority to conduct fertilizer inspections at any time, but in practice, there are no controls once the fertilizer enters Senegal. Companies distributing subsidized fertilizer (the majority of large firms) must comply with the subsidy program requirements. To be eligible, a company must be legally established and must demonstrate the capacity (expertise, facilities, finances, and international suppliers) to fulfill the tender contract by procuring the stated quantity of fertilizer and delivering it to a rural storage depot at an established price. In addition to awarding tender contracts, the Ministry of Agriculture may also make a request/notification to a supplier to deliver a shipment to a specific destination.


198

t. Prohibit the sale of open, mislabeled, or adulterated bags of fertilizer?

N/A

u. Establish rules for the accreditation of third-party certification of fertilizer quality? (e.g. an accredited private laboratory network)

N/A No


No

No institution has the explicit mandate to regulate the fertilizer industry. General trade is regulated by

the Ministry of Commerce. At the Ministry of Agriculture, fertilizer falls under the general activities of the Direction de l’Agriculture at the national level and

DRDR at the regional level, but there is no active implementing institution.



N/A

Yes, in theory. DRDR and SDDR, the regional and sub-regional Ministry of Agriculture offices, may inspect any facilities at any time. In practice, no

controls or checks occur unless DRDR has received complaints about a supplier.

b. Fertilizer at the point of sale (e.g. at retail shops)? N/A Same as above.


N/A Yes. In practice, sampling would only done at the

port of entry for imported fertilizer.


N/A


N/A No. No licenses are required for fertilizer suppliers.


Yes The Government of Senegal awards tender contracts to firms to procure and distribute fertilizer to rural

storage depots.

199


S. Time, cost, and procedures to transfer farmland. Requirements may include cadastral survey, title and encumbrances search, valuation and inspection, government consent to transfer, stamp duty and transfer tax, and registration of deed of sale.

T. Index on access to property registration information.

U. Index on legal framework for leasing farmland, including customary land.


LLCs Farm size 7 hectares Purchase Price CFA 54,167 Location Kaolack Land Tenure Transfer of user rights to

government-owned land (Domain National), registered with local Rural Council


Note on Land allocation in Senegal There are several land regimes in Senegal. An estimated 85% of the land in Senegal is owned by the government as Domain National. Almost all agricultural land is under the Domain National regime. Domain National is administrated by the most locally elected administrative unit, the Rural Council (Conseil rural).44 There is no private ownership of Domain National land; no title or leases can be established. Instead, an allocation permit is issued, which grants user rights to the possessor for as long as the land is used productively. Some commercial agricultural businesses reported that they held a 99 year allocation permit. Domain National can be transformed to Domain Privé de l’Etat, whereby the land is still owned by the government but a lease agreement is established with the state as lessor and an individual or company as lessee. It is rare for agricultural land to be classified as Domain Privé de l’Etat. Finally, a small percentage of land in Senegal is held as private property, but almost exclusively in urban centers. This indicator measures the time and cost to transfer the user right on Domain National land from a Seller to a Buyer, the most common form of agricultural land transfers.

44 Senegal is organized in regions (headed by the Governor); Department (headed by Prefet and the sous-‐Prefet); Arrondissement (headed by Chef d’arrondissement) and the Rural Community (headed by President of the Rural Council).

200

45 There is no rural cadaster in Senegal, however there are pilot projects to develop a rural cadaster.


1 Submit a transfer request (Acte de repossession) to the Rural Council • Domain national cannot be sold as the land belongs to

the government. Hence, this process is to transfer the user right to the land. However, the new user can compensate the previous user for improvements to the land. The price is negotiated by the two parties.

• APIX recommends investors to meet with the President of the Rural Council to present the plan to develop agricultural activities before the paperwork is submitted to the Rural Council. This is not a required step, but for larger parcels, initial informal discussions facilitate the process.

• The Seller and the Buyer go to the Rural Council and bring one witness each. They sign a transfer certificate (Acte de repossession), which two witnesses also sign. With the certificate they submit a photocopy of their IDs.

• The Land Commission (a commission under the Rural Council) sends out a surveyor to demarcate the plot.45

A meeting is held by the Rural Council. The meetings are held once a “critical mass” of requests have been received (the number of requests needed to convene a meeting varies by Rural Council) for land or for the transfer of user rights. The Rural Council typically meets once every two to three months to review the requests. A decision to approve the application is made and the minutes of the meeting are made public.

90-120 0 Rural Council

2 Payment of a demarcation fee (frais de bornage) • The new user pays a demarcation fee at the treasurer of

the Rural Council. Each Rural Council sets its own fees, but it is typically 5000 CFA/ha.

• The treasurer of the Rural Council issues a receipt for the payment.

In urban and peri-urban areas, a separate and additional payment is made to the Taxes and Land office (Impots et Domaines).

1 35,000 Treasurer of the Rural Council

3 Issuing of a decision (délibération) from the Rural Council • The buyer submits the receipt from the treasurer to

Rural Council. The chairman of the Rural Council and the Sous- Prefet (or the Prefet) signs the new allocation certificate (Certificat de délibération).

15 0 Rural Council

201

Note on converting Domain National to Domain Privé de l’Etat Users with an allocation certificate to Domain National can convert the parcel of land to Domain Privé de l’Etat and get a lease for the land. However, it is unusual for agricultural land to be converted from Domain National to Domain Privé de l’Etat. The process can take two to three years and involves authorization from the President of Senegal.46 • Submit an application to Tax and Land Authorities (Direction Général des Impôt et Domaine DGID). A notary would typically be enlisted to help with the process. The following documents are included in the application:

o Allocation certificate from the Rural Council for the land o Demarcation map of the land (conducted by the rural council during the process to obtain the allocation certificate) o Funding/investment plan for the land.

• The DGID reviews the file and it is assigned a file number. o The DGID inspectors undertake a survey and delimit the property. o Depending on the location of the plot and the proposed activities on the land, the Ministry of Environment may

undertake an environmental assessment and the Ministry of Urbanism may do a site visit to ensure that the land is suitable for agricultural purposes and not needed for other public services (markets, schools etc.) according to the town planning needs.

o The DGID inspectors draft a report and submit it to Director of the regional DGID. The Director approves the application. • The Commission of Land Operations (la Commission de Contrôle des Opérations Domaniales, CCOD) approves the application and sets the annual lease payment. The CCOD sends it back to the regional DGID office. • CCOD publishes the decision in the newspaper. The Director of CCOD must make a report if there are oppositions to the decision. • The DGID prepares a Decree to decommission the land from Domain National and register the land as Domain Privé de l’Etat (Décrets d'immatriculation et de désaffectation du terrain). The Decree is signed by the President of Senegal • The DGID draws up a lease agreement. The lease agreement is for 30 years and renewable thereafter every 20 years. The fee for agricultural land is 20,000 CFA.ha/year. • The lease agreement is signed by the Prefect. • The lessee registers the lease at the Bureau of Land Conservation (Bureaux de Conservation foncière).

Access to Property Registration Index (0-7) Note: This index relates to Domain Prive de l’Etat


5 Comments


Yes

At the Bureau of Land Concervation (Bureaux de Conservation Foncière) in all regional capitals, with

the exception of the newly created regions Sédhiou,Kédougou and Kaffrine which are

dependent on Kolda, Tambacounda Kaolack respectively.

2. Can real property registration be accomplished via an automated, online process? No An automated process is being implemented at the

DGID, but is still not complete.

46 There are a number of fees at various stages of this process, which this assessment was not able to measure.

• The change of the user is entered into a registry at the rural council. Each rural council has their own registry (often a book) of land records. Rural Council land registries are not inter-connected.


202


No, but APIX has information and can advise and support investors as they are registering their

property. 4. Are real property registration steps and timeframes clear? No The steps are clear but the time it takes varies.


The procedure is independent of the size of the property. If parceling is taking place, the cadaster

needs to be involved. Relevant Law: 2011-07 of March 30, 2011

6. Are real property registration steps the same regardless of the nationality of ownership? Yes Relevant Law: 2011-07 of March 30,2011

7. Is quality of data in the land registry reliable, with few cases of dual or fake titles? Yes

Leasing Rural Land Index (0-9) Responses Based on Domain National, hence it is not a lease but user rights.



No

According to the law, domain national can only be allocated to members of the local community.

However, in practice this does not pose a hinder for individuals or entities from other areas to be

allocated land. 97. Do formal entities have a de facto right to lease

land? Yes Yes in practice, formal entities are allocated Domain National.


Yes The Prefet (equivalent to a governor) or the sous-

Prefet approves the allocation permit to the National Domain.



There is no statutory maximum as individuals can use the land as long as they are using it. In practice

businesses are granted 99-year user rights. 100. What is the statutory maximum amount of

land, if any, that a formal entity can acquire? No

statutory maximum

There is no statutory maximum. However, in practice the allocation of large track of Domain

National (10,000 + ha) is approved by the President. 101. Are there often statutory restrictions on

the right to produce on the land based on the leaseholder’s own preferences that impede the leaseholder’s ability to undertake agricultural production?

No


Yes The Domain National cannot be leased. A subdivision needs to be approved by the Rural Council.


Yes



Yes The allocation certificate is recorded at the Rural

Council. This is not an automated system and it is not centralized.

203


No

f. Do such mortgages occur in practice? No

204


S. Types of agricultural collateral allowed by the legal and regulatory framework and accepted by financial institutions in practice.

T. Quality of existing collateral registries for movable collateral.

U. Strength of legal framework for warehouse receipts systems.


Types of Collateral Allowed by Law

Used in Practice

Type of Charge


1. Farm equipment

Yes Yes Fixed, floating

Yes

Farm equipment is used as collateral by banks engaged in agricultural lending. The debtor or the creditor registers the pledge in the RCCM as part

of the loan application process.

2. Crop in field

Yes No Yes

Personal property, tangible or intangible, may be pledged. Existing or future movable properties

can be pledged (art. 92. OHADA Act Organizing Securities). In accordance with the OHADA Act

Organizing Securities (article 120 and the following articles), farm products can be used as a

collateral and can be registered in the RCCM. This is referred to as a pledge of the stock (gage

de stocks). A stock can be pledged without transferring it to the creditor if a court clerk

(who is in charge of the RCCM) issues a collateral inventory list (bordereau de gage de stocks) In practice, crop in the field is not used as

collateral. However, sales contracts between a larger processor, a producer organization and a bank concerning crop still in the field is being

used as collateral for example in rice processing. 3. Crop in warehouse

Yes Yes Floating Yes

Crop in the warehouse is used as collateral, but not as frequently as equipment. As described

above, a collateral inventory list can be issued to allow the stock to remain in the creditor’s

possession or a third party warehouse operator

205

can hold the crop until the loan has been repaid.

4. Livestock

Yes No Yes

Personal property may be pledged. Livestock in not specifically mentioned as a security, but as a farm product (referred to in art. 120) it may be used as collateral. In practice, livestock in not used as collateral and is not registered in the RCCM. However, with the introduction of agricultural insurance (www.cnaas.sn) it is

possible that a system could be developed to make it more feasible to use cattle as collateral.

5. Inventory Yes No Yes

Inventory can be used as collateral, but in practice it is not being used.


Yes No Yes

OHADA Act Organizing Securities (article 156 and the following articles) provide for intellectual property rights to be used as collateral. However, in practice there is a limited market for securities in patented plant varieties as ISRA is leading the

development of new varieties, and other then the research and development underway by Africa Rice the private sector is less well developed.

7. Futures contract Law is silent No No

Future contracts refer to an exchange based commodity trade, but there is no commodity

exchange in Senegal. 8. Accounts receivable Yes Yes Yes

An invoice for delivered goods can be used as a guarantee, but in practice banks will only accept it if the creditor’s bank guarantees that the money

will be paid. 9. Buy/sell agreements

Yes Yes Floating Yes

In more developed value chains, notably rice and tomatoes, agreements between producer

organizations, buyers/processors and the bank are used as collateral to obtain finance from the bank. The agreement is typically registered at the RCCM. For rice, the crop can still be in the field

when the financing is awarded. To reduce the level of risk, the producer organization has to

have crop insurance. 10. Land and water rights

Yes No Fixed Yes

Both a title deed and a lease can be used as collateral. A title dead can be registered but not a

lease. However, it’s very rare to use land as collateral for agricultural lending as most land in rural areas is Domain National. Domain National is land owned by the government with only user rights to the farmers (no land title). Banks do not

accept user rights to Domain National as a security.

206

Movables Collateral Registry Index (0-11) Responses are for the Collateral Registry at the Companies Registrar


67. What type of registry exists for registering movable collateral? Please specify the name of the movable collateral registry(ies). Single

Registre de Commerce et du Crédit Mobilier (RCCM) regulated by the OHADA Law regulating General

Commercial Law (2010). There is a vehicle registry (Registre de carte grise) but vehicles are registered in the RCCM for collateral purposes. This Index related to the

RCCM. 68. Can security rights for a broad range of

tangible and intangible movables (i.e. equipment, crops, livestock, accounts receivable, inventory, futures, etc.) be registered in the movable collateral registry?

Yes

The OHADA Uniform Act Organizing Securities regulates the registration of securities. The most

commonly used movables for agricultural lending are equipment and contracts.


Yes

70. Does the movable collateral registry have a centralized database that consolidates information on all types of security interests (charges, chattel mortgages, etc.) and all types of debtors from registry branches across all geographic regions of the country? Yes

The registry is kept by the Registrar at the regional courts. The regional courts send information about

entries or changes in the RCCM to a central registry at the court of appeal (under the supervision of the Ministry

of Justice) in Dakar every couple of months. At the Communal OHADA court in Abidjan, there is also a regional OHADA registry with information from the RCCM of all the member states. The transmission

between the regional registries and the central registry in Dakar should become more regular once the new

electronic registry www.infogreffe.sn launches and is operational in the regions, tentatively in 2014.

71. Does the movable collateral registry operate a fully electronic database system (as opposed to paper-based)? No

The registry is paper based. However, the court in Saint Louis as developed its own Microsoft Access database. A new electronic registry called www.infogreffe.sn, will be launched in April/May 2014. The new system is modeled

after the French system. 72. Can registration and searching in the movable

collateral registry be performed online? No Not yet, see above.

73. Is data from the movable collateral registry reliable? Yes

The registry is perceived as reliable. The introduction of an electronic database will strengthen the system

74. Is real-time information from the movable collateral registry widely accessible to the general public without any restrictions, including by those located in commercial centers outside of the capital? Yes

The regional registries are up to date and a search can be undertaken without paying a fee. The time it takes seems to vary between locations, but it can be done in minutes, or a day or two. The national registry lags with a couple of months. However, registration in the RCCM has to be done in the region where a person lives or a company is

registered, hence a search in the regional RCCM is adequate.

75. Can registration in the movable collateral registry be performed within a reasonably rapid time frame and with flat, reasonable fees? No

The registration can be undertaken in 1-3 days. However, the registration fee is a percentage of the value of the

registered collateral (Décret 2013-890 du 24 Juin 2013). For 0-3 million CFA there is a 5% charge; 3-5 million

207

(1.5%); 5-500 million CFA (1%); 500 million-1billion (0.5%); over 1 billion (0.25%). The maximum charge is 50 million CFA. Hence, to register collateral worth $6400 (3

million CFA) the registration fee is $320. 76. Can a search of the movable collateral registry

be performed within a reasonably rapid time frame and with flat, reasonable fees (i.e. free or less than US$5)?

Yes The time it takes seems to vary between locations, but in some location it takes minutes, while in others it can be

done in 1-5 days. The search is preformed free of charge.


The OHADA Uniform Act establishes the priority order for creditors.

Warehouse Receipts System Index (out of 14)

In Senegal, like in Mali, there is no full-fledged warehouse receipt system in place. However there is a system referred to as tierce détention – a licensed third party holder – which has several similarities, but also a number of key differences from a warehouse receipt system. The Index below relates to tierce détention. The regulatory framework for tierce detention is established by the OHADA Uniform Act Organizing Securities, although the registration of third party holder (tierce détenteur) is done at the national level. The rules, procedures and practices of tierce détention are therefore very similar between Mali and Senegal. In Senegal, tierce détention is primarily used by large importers. Tierce détention is a three party agreement between an economic operator, the bank and the third party holder (tierce détenteur). Unlike a classical warehouse receipt system, where producers deposit their produce or commodities after the harvest, a typical situation use of tierce détention is that the bank pre-finances the importation of goods to Senegal. The goods are stored in an agreed-upon warehouse which can only be opened when both the economic operator and the third party holder are present. As the operator repays the bank a part of the loan, the bank instructs the third party holder to release an equivalent amount of goods from the warehouse to the economic operator. The third party holder confirms the release to the bank. Hence, the operator will get access to the goods after the repayment to the bank, which can be done in several installments. The third party holder is licensed. However, the warehouse is not licensed, so any warehouse may be used, such as the third party holder’s warehouse or the economic operator’s warehouse. Tierce détention receipts are not transferable and not negotiable. Although the goods stored in the warehouse are measured and identified (type of product, number of bags etc.), there is no regulation specifying the grades or standards that should be applied. The products are therefore not interchangeable. The exact same products that are being stored will be released.

Question Index

Score: 4.5

Comments


Yes

Tierce détention is regulated in the OHADA Uniform Act Organizing Securities. A decree from the Direction de Commerce specifies the registration requirements and procedures for tierce detention. This system is being used by larger, primarily international logistics and

warehouse companies located around the port of Dakar for imported goods.

a. If NO, are there any plans to draft a warehouse receipts law? No

There is no full-fledged warehouse receipt law in Senegal, and there are no current plans or initiatives to

draft one. b. In practice, are warehouse receipts used and accepted for the following types of goods?

Both agricultural

and industrial

goods

Tierce détention is used for imported goods, primarily rice, flour and maize, and only occasionally for

agricultural inputs.

84. Do such laws or regulations specify an entity tasked with registration, licensing, and No Warehouses are not registered or licensed. There is no

specific oversight over warehouses that are used for

208

oversight of warehouses? tierce détention. However, the Direction de Commerce d’Exterieur registers and licenses the third party holders

(tierce détenteur).

2.a. Is such entity private or public? N/A 85. Does the legal and regulatory framework


No Warehouses are not registered or licensed.


Yes

The operator needs to: 1) be a registered trader 2) be the owner or a lease holder of a warehouse 3) hold the

appropriate insurance policies 4) deposit a financial guarantee.


No

5.a. Are such commodity standards and grading systems enforced effectively? N/A


No There are no government regulations, but companies may establish their own procedures and standards.


No The Direction de Commerce can carry out inspections, but according to industry experts inspections by the Direction de Commerce do not take place in practice.


No

There are no specific rules or procedures for handling agricultural goods in storage.

The Direction de Commerce provide very limited if any oversight of the operation of tierce détention.

91. Does the legal and regulatory framework clearly specify who bears the risk of loss, destruction, spoilage or damage? Yes

The third party holder has the exclusive responsibility to maintain and conserve the goods in accordance with

OHADA regulations. The third party holder has to hold an insurance policy covering the goods.


No


No


Yes


13.a. Name and address of licensed warehouse operator Yes

13.b. Designation and grade of warehouse No It is noted which warehouse the goods are stored in,

209

but not the designation or grade. 13.c. License number of warehouse No

13.d. Name and address of depositor Yes 13.e. Relationship between warehouse operator and depositor if not a strictly

disinterested custodianship No

13.f. Description and quality of goods Yes 13.g. Whether goods are insured or not Yes

13.h. Net weight of goods Yes 13.i. Other: [ ] -


No

210


Y. Time, cost, and documents to export a widely-traded agricultural commodity.

Z. Index on legal framework for phytosanitary certificates for export.

AA. Time, cost, and documents to import hybrid seed.

BB. Index on trade facilitation measures

Product Peanuts Export Consignment


Value US$20,000 Point of Exit Tema Port Product Hybrid Maize Seed Import Consignment


Value US$20,000 Point of Entry Tema Port Company Private LLC, majority





Time (days)

Cost (US$)


5 $ 365


1 $ 710

TOTAL 6 days $ 1,075

Documents to Export Commodity Commercial Invoice

Packing List (3 copies)

Fumigation Certificate (for EU destination)

Non-GMO certificate (for EU destination)


ORBUS filing: Certificate of Origin; Bank domiciliation; Photocopy of Carte de Import/Export; Notice of NINEA registration Customs Export Declaration

Original Bill of Lading (3 copies) Certificate of Weight and Quality (if required by Buyer) TOTAL: 9 documents

211


Time (days)

Cost (USD)


25 $83


5 $2,208

TOTAL 30 days

$2,291

Documents to Import Hybrid Seed ORBUS Filing : Preliminary Import Declaration; Import Authorization (L’Attestation d’Import, AI); and Foreign Exchange Permission (Autorisation de Change, AC) Import Permit / Application for authorization to import seeds Phytosanitary Certificate

Pro Forma Invoice Packing List

Bill of Landing

Customs Import Declaration and Insurance

TOTAL: 7 documents

212




All documents

17. Can the documents required to import/export agricultural goods be submitted electronically? All

documents

As of 2004, Senegal has an electronic single window (guichet unique) trade system that allows for electronic document submission. However,

respondents noted that paper copies of all documents must also be submitted in person to

Customs. 18. Do Customs and other agencies utilize a

risk management system to screen goods for physical inspection?

Yes

A Computerized Risk Management System (CRMS) is operated through the single window trade

system. However, respondents are not aware that it exists, and perceive Customs inspections as

random. DPV also maintains a database of importers and exporters. Traders are ranked as

Category A, B, or C (denoting highest risk) on the basis of a basic risk profile.

d. If YES, is the risk management system electronic? Yes


Yes Frequent traders with good relationships are

“known entities” and are subject to fewer inspections.


No

Customs valuation inspections are very rare but can occur at any time. DPV more regularly

conducts physical cargo inspections for phytosanitary purposes.

39. Are consignments of imported seed allowed to enter Senegal (and remain in storage) while samples undergo laboratory analysis?

Yes

Seed may enter Senegal and remain in quarantine in the importer’s warehouse in Dakar. However,

sampling and testing of imported seed consignment (by DISEM and DPV is not frequent.

213

Phytosanitary Index (0-9)


7 Comments

37. Is Senegal a signatory of the International Plant Protection Convention (IPPC)?

Yes www.ippc.int/countries/senegal


Yes


Yes

The DPV (Department of Plant Protection) systematically provides information on the phytosanitary requirements

before export, per Decree 60/12, 1960 on the establishment of phytosanitary control. The DPV

organizes information sessions and annual capacity building training with exporters.


Yes Same as above.



No


m. The exporter’s warehouse or storage facility?

Yes

The exporter is required to register with Plant Protection (DPV). DPV has presence in 11 regions and makes

periodic visits to farms and packaging centers. Inspections are obligatory.

n. Bonded warehouses? Yes o. All points of exit from Senegal

(including land, air, and sea ports)? Yes At 11 border locations including the seaport, airport, and land border posts.


Yes


Yes

Senegal is one four African countries approved by the European Union to certify the compliance of fruits and

vegetable with EC Regulation 430/2006 commercial standards. These standards include food safety and

traceability requirements.

Since 2007, the DPV has issued conformity certificates for fresh fruits and vegetable exports from Senegal to the EU.

Quality assurance measures include maintaining a database of all traders, categorizing traders by level of risk

of non-compliance, and a enacting an annual audit plan.

214


S. Index on legal framework for contract farming. T. Index on system for establishing public grades

and standards for a widely-traded staple crop. U. Index on access to expedited or alternative



Question Index

Score: 7 Comments


Yes The Law of Civil and Commercial Obligations (Code

des Obligations Civiles et Commerciales, COCC) (Art. 42) provides for freedom of contracts.


No Tripartite contractual arrangements in the agricultural sector take place.


Yes

There is a negotiated recommended floor price for groundnuts. The government and stakeholders take part in the negotiation, but the price is not binding.

Other agricultural products are traded freely at market prices.


Yes

Force Majeure is regulated in the COCC and the OHADA Uniform Act to General Commercial Law. However, participants noted that force majeure is difficult to interpret and the contract has therefore to be very specific about what is considered force

majeure. 47. Does the legal framework recognize the right

of recovery of damages in the case of breach of contract and equitable remedies such as specific performance and injunctions?

Yes

The OHADA Uniform Act relating to General Commercial Law (art/ 291-293) and the Civil and Commercial Code (Code des obligations civiles et commerciales) art. 133-136 recognize this right.

215

48. Are duress/coercion, misrepresentation, or fraud recognized as legal defenses that can be used to void contracts? Yes

The Civil and Commercial Code (art. 58-67) provides that consent obtained as a result of an error,

deception or violence is a ground for rendering the contract null and void.


Yes

The Uniform Act on the Organization of the Simplified Procedures of Debt Collection and

Enforcement (Acte Uniforme portant Organisation des Procédures Simplifiées de recouvrement et des Voies

d’exécution).

Grades and Standards Index (0-12) This index is scored for groundnuts.


10 Comments


Yes The Senegalese Normalization Association

(Association Senegalaise de Normalisation, ASN) develops standards.


No

Standards set by the ASN are voluntary. There are no mandatory or voluntary Senegalese grades and

standards for ground nuts, but there are grades and standards for other agricultural products, including

peanut butter. Grades and standards are listed in the Senegalese Grades and Standards Catalogue.


Yes Grades and standards for quality purposes, to the extent they exist, refer to specifications made by

buyers in international transactions.

66. Does a regulatory agency conduct regular inspections to ensure the commodity listed above is consistently and correctly graded/classified? No

The Division of Consumption and Consumer Safety (Division de la Consommation et de la Securite du

Consommateur, DCSC) of the Ministry of Commerce has the mandate to undertake

inspections, but there is a lack of manpower to conduct sufficient inspections.


Yes

The ASN has the mandate to develop grades and standards. The Direction for Plant Protection (La Direction de Protection des Végétaux, DPV) is a member of the ASN’s technical committee which

develops grades and standards in regard to contamination and chemical residues.

68. Are there mandatory standards for microbial contamination and chemical residue for the commodity listed above? No

Senegal enforces EU standards for exporters accessing the EU market, which are stricter than

Senegalese standards. The domestic standards are voluntary.


Yes

Exporters must meet international standards to access markets such as the EU. For fruit and

vegetables exported from Senegal, the European Commission Regulation 430/2006 approves the DPV

216

to certify conformity with EU standards.


Yes

The DPV carries out the inspections. The inspections are primary focused on export products. In addition,

some farm level inspections are carried out by the DPV.


Yes

The ASN has several technical working committees for agricultural products and food. The committees

are made up of government representatives (including the DPV), representatives of the agro-

business sector and research institutions. 72. Does the process to develop new public grades

or standards for agricultural commodities include the following types of public outreach and input?

Public comment

period



private labs

a. Are there ISO accredited laboratories in Senegal? Yes The Ceres Locustox laboratory in Dakar is the only

ISO- accredited lab 12. Are there uniform units of measurement across all food and agriculture-related commerce Yes


Yes




No

There is no commercial court, but there are commercial chambers in the regular courts. It’s

possible to hold summary proceedings (216elative216s de référés) for urgent cases. The local

“justice houses” (Maison de Justice) primarily deals with family law.


Yes

The Arbitration and Mediation Center (Centre d’Arbitrage et de Médiation) of the Chamber of

Commerce provides alternative dispute resolution mechanisms. However, most contractual disputes are processed through informal negotiations within the personal network based on trade practices and

trust. This index is scored on arbitration. 108. Do expedited or alternative mechanisms

adequately apply standard contract law principles or arbitration/mediation principles (as applicable) when resolving disputes?

Yes

The OHADA Uniform Act on Arbitration (1999) governs arbitration in the OHADA member states. Senegal has also ratified the New York Arbitration

Convention.

217

109. Are the costs entailed in using such expedited or alternative mechanisms reasonable and not prohibitive (ex. Total costs do not exceed the amount in dispute)?

Yes

The cost is comparable to other regional arbitration and mediation centers, but for local businesses the

use of arbitration or mediation through the Chamber of Commerce is only an option for disputes involving

large amounts. The arbitration and mediation centers in Abidjan and Paris are stronger options for

those that can pay the fees and other costs. For disputes involving smaller amounts of money there is

no formal alternative dispute resolution forum. 4.a. Are the costs entailed typically less than

that of the traditional court system? No


No


N/A


Yes

Arbitration and mediation is faster than traditional courts. Arbitrators are familiar with prevailing

business practices in the particular industry. It is also confidential which is valuable to maintain a business

reputation. 112. Are expedited or alternative mechanisms

readily available outside of Dakar? Yes The Arbitration and mediation center has satellite centers at the Chambers of Commerce in Saint

Louis, Thiès, Kaolack and Ziguinchor. 8. Are rulings through expedited or alternative mechanisms upheld in and enforced by the traditional court system?

Yes Art. 30 of the OHADA Uniform Code on Arbitration (Acte uniforme 217elative au droit de l’arbitrage) and the

Civil Procedure Code.

218


O. Time, cost, and procedures for business registration and licensing of a mid-sized staple grain farm. Requirements may include national or local trading licenses, chemical storage requirements, workplace or employee registration, environmental permits, and company registration.

P. Index on access to business registration information.

Case Study Farm Crop Rice Farm size 5 hectares Location Nakhon Sawan

Province Legal Form Limited liability

company Annual Revenue US$ 5,074 Land tenure 50 year lease Market Farm gate, local

market

Thailand

219

Procedures, Time, and Cost to Start-up a 5-hectare Rice Farm47

47 Data highlighted in yellow is based on incomplete/unconfirmed data 48 Exchange rates as of May 2013 (THB 29.56 per USD). Costs are rounded to the nearest dollar. 49 The vast majority of rice farmers in Thailand do not form a private limited company (i.e. a limited liability company). In practice, farmers need only register with the Department of Agricultural Extension (DOAE) in order to be eligible for the rice pledging scheme and for disaster registration. Two reasons why a farm would undertake company registration are:

• Large commercial farms register as a private limited company. A private limited company must have a minimum of three shareholders in order to register.

• Farmers that also operate as commercial traders (e.g. milling or purchase/sale of rice) must undertake Commercial Registration at the Department of Business Development. Commercial registration is not equivalent to company registration – it does not grant the business status as a legal entity. Commercial registration can be accomplished at the local tambon office (sub-‐district administrative office). The applicant must complete and submit a registration form and pay a fee of THB 50. For more information, see the DBD website: http://www.dbd.go.th/mainsite/index.php?id=101&L=1

No. Procedure

Time (days)

Cost (US$)48 Agency

1 Reserve Company Name49 Booking a company name can be done online or in person at one of the 86 provincial offices of the Department of Business Development (DBD). The steps to register a business are described on the DBD website: http://www.dbd.go.th/mainsite/index.php?id=99&L=1

1

0

Department of Business

Development (DBD), Department of Internal Trade,

Ministry of Commerce

2 Prepare Memorandum of Association and hold a statutory meeting of shareholders A private limited company (ie. limited liability company) is required to have at least 3 shareholders. Shareholders or their representatives must prepare the following documents for the DBD: 1. Memorandum of Association (MoA) signed by all

shareholders. Applicants can download standard MoA forms from the DBD website. The MoA must include:

• Company name • Location of the head office • Objective • Amount of registered capital • Name, address, age, occupation, and number of

shares of each shareholder • Name, address, and age of two witnesses

2. Meeting Minutes from the statutory meeting held to assign shares and set up a director committee

3. A form listing the names of all directors in the director committee

1 0 N/A

220

Once the MoA is prepared, shares must be assigned and a general meeting of shareholders must be held. This meeting is referred to as the statutory meeting. Drafting the MoA and holding the statutory meeting can be completed in the same day. At a minimum, the statutory meeting must occur within seven days of drafting the MoA, and the company must register with the DBD within three months of the date of the statutory meeting.

3 Deposit Paid-In Capital Applicants must demonstrate that 25% of the company’s registered capital has been deposited in a bank account. There is no minimum capital requirement for limited liability companies. The company capital must be divided into shares of equal value, and have at least one share. Each share must be at least THB 5.

1 0 N/A

4 Obtain certificate of business (bai sum khan) and business registration number The Department of Business Development (DBD) operates a one-stop shop where a company can complete all registration requirements at the same time, including submission of the application for business registration, certified copies of the Memorandum of Association (MoA) and the statutory meeting notes, and confirmation of payment of the registered capital. As of February 2012, a business may use their 13-digit business registration number as a tax identification number (TIN). Additionally, companies with employees can register with social security through the DBD one stop shop. Applicants must pay into two funds: 1) worker’s compensation fund revenues (once a year), and 2) a social security fee of 5% of the employee’s monthly compensation (up to THB 15,000) (i.e. the monthly contribution cap is THB 750). More details are available online at www.sso.go.th Business registration costs for a company with THB 1 million registered capital include:

• THB 500 – Registration of Memorandum of Association (plus THB 50 for each additional THB 100,000 of registered capital above THB 1 million, not to exceed THB 25,000)

• THB 5,000 – Company Registration (plus THB 500 per THB 100,000 of registered capital above THB 1 million, not to exceed THB 250,000)

• THB 100 – Certificate of Business (bai sum khan) • THB 200 – revenue tax/stamp duty for a request to set up

a company • THB 200 plus THB 50 per page – DBD certification of

documents VAT registration is not required, as the sale of unprocessed agricultural products and agricultural inputs (eg. seed, fertilizer, animal feed, and pesticide) is exempt from VAT. Additionally,

1 210 Department of

Business Development

221





Yes

Company registration information is available online at the Department of Business Development (DBD)

website. Companies may search and reserve a company name online.

42. Is registration possible in every

state/province? Yes 43. Are registration steps the same regardless of


No Firms with 10 or more full time employees must

additionally submit a copy of their work regulations to the DBD.

44. Are registration steps the same regardless of the nationality of ownership? No Foreigners are forbidden to engage in agriculture. The

profession is reserved for Thai citizens only.

businesses with less than THB 1.8 million per year in sales are exempt from VAT regardless of the business activity. Companies with 10 or more employees must also submit a copy of work regulations, as proof that their employment practices conform to Thai labor law. (Not applicable to this case study.)

5 Register as a rice farmer and obtain certificate from DOAE The DOAE registers rice farmers with the national Rice Pledging Scheme, a government-sponsored price support program for farmers. Registration is annual and includes submitting data on the types of rice varieties, area under cultivation, and season of production (dry/wet). Farmers must also present national identification and proof of land ownership, including photographic evidence and confirmation by neighbors. Obtaining a certificate from DOAE typically takes two weeks to process the application and register the farmer with the national system. During this period the farmer may continue to cultivate rice. No other crops require notification or registration with government authorities.

15

0

District Agricultural Extension Office, Department of

Agricultural Extension (DOAE),

Ministry of Agriculture and Cooperatives

(MOAC)

N/A Obtain a Corporate Seal / Rubber Stamp Most companies obtain a corporate seal for use on official documents, although the seal is not legally required. If the company gives power of authority to a director or other authorized person, they must use a corporate seal for use on official documents.

1-3 days Private Vendor


222


O. Time, cost, and procedures to obtain operational licenses for a seed supplier. Requirements may include import license, seed dealer license, license for storage facilities, national or local trading licenses, and inspections.

P. Time, cost, and procedures to register a new proprietary seed variety.



Type of Seed Rice Location Bangkok Ownership Domestic, non-state-owned

enterprise


No. Procedure Time (days) Cost (US$) Agency 1 Obtain license to import controlled seed for

commercial purposes Seed companies apply for an import license through the Plant Variety Control Division (PVCD) in the Office of Agricultural Regulation (OAR), Department of Agriculture (DOA). The import license allows the holder to import controlled seed. Controlled seed refers to 37 species for which the DOA has published mandatory germination rates and purity standards. The import license is valid for 1 year and renewable thereafter. Applicants must provide the following information: • Application form. Seed companies involved in import and

export of seed must provide details on the companies who own the parent line, countries of origin, and trade name of seed for sale.

• Details and map of storage facilities • Business registration certificate and information on the

business owner Additionally, each imported shipment of seed requires an “Import permit for prohibited articles for commercial purposes” under the Plant Quarantine Act. An import permit is required in advance of a shipment of any agricultural seeds or plant germplasm. The import permit is managed by the Plant

10 14

Plant Variety Control Division (PVCD), Office of

Agricultural Regulation (OAR),

Department of Agriculture

(DOA), Ministry of Agriculture & Cooperatives

(MOAC)

223

Quarantine Division of the DOA. Plant materials may be listed as “prohibited” or “restricted” items under Ministerial Notification (MOAC).50 These designations affect the documentation and proof required for quarantine purposes. These designations are irrespective of a plant species’ categorization as a “controlled” seed. Applicants for an import permit must provide the name of prohibited articles, plant parts, and places of origin for all types of imported seed. The application must be accompanied by a phytosanitary certificate and a certificate of origin. Finally, at the time of arrival the importer must additionally notify the PVCD by taking the original import license to a PVCD inspector at the Plant Quarantine station at the port where the products arrived. The details of the imported consignment are recorded on the back of the import license. Sampling and laboratory testing of imported seed consignments are conducted by both the Plant Quarantine Division (disease tests) and by the Plant Variety Control Division (germination and purity tests). Applicable Laws: Plants Act B.E. 2518 (1975) as amended by Plants Act (No. 2) B.E. 2535 (1998). Plant Quarantine Act B.E. 2507 (1964) as amended by Plant Quarantine Act (No. 2) B.E. 2542 (1999) and Plant Quarantine Act (No. 3) B.E. 2551 (2008).

2 Obtain license to collect seeds for commercial purposes According to the Plants Act, a person shall not collect, sell, import, export or bring in transit controlled seed for commercial purpose unless he has received a license from the competent authority and must store controlled seed in a place for storing controlled seed as specified in the license. “Collection” pertains to harvesting or purchase and storage of seed. Application must specify storage locations and if the locations change, the company must re-apply for the license to collect seeds. There are random inspections 1-2 times per year. There is no inspection fee. Inspectors may take seed samples, typically to run germination tests. Inspections are more common for distributors than for retailers. Applicants for a License to Collect Seeds must provide: • Application form • Detail and map of site of collection Business registration certificate and information on the business


procedure 14 PVCD, OAR,

DOA

50 Since July 31, 2007, three notifications have entered into force under the Plant Quarantine Act on “prohibited” and “restricted” seed materials:

• Notification of Ministry of Agriculture and Cooperatives on Specification of Plants and Carriers from Certain Sources as Prohibited Articles.

• Notification of Ministry of Agriculture and Cooperatives on Specification of Plant Pests as Prohibited Articles. • Notification of Ministry of Agriculture and Cooperatives on Specification of Plants from Certain Sources as

Restricted Articles

224

owner. Applicants must: be twenty years old or older, hold a residence or office in Thailand, be in good financial standing, be a competent person, and use a unique trade name.51 There is also a license to sell seeds, for retailers only. The license to sell seeds takes 7 days, costs THB 100, and can be obtained at one of 8 regional PVCD offices. The license to sell seeds is separate from the license to collect seeds, which a retailer may also require if they are purchasing or storing large quantities of seed. Importers and distributors need not obtain a license to sell seeds as the commercial sale of seeds is covered under the import license and the license to collect seeds. (Therefore, this requirement is not scored or listed as a separate procedure). Note: foreign-owned Thai seed companies are prohibited from retail sale of seed.

3 Submit seed sample for germination and purity testing – for purposes of controlled plant registration (por por number) Seed companies must obtain a por por number for each commercial variety of a controlled crop. Registration is required for the import or marketing of any controlled crop. Por por numbers are listed on the label of each seed package. Registration is valid for five years, after which it can be renewed. Applicants must provide information on: • Crop name • Trade name • Place of origin • Parental lines • Crop characteristics • Cultivated condition

Companies must submit a seed sample to the DOA for germination and purity testing before they may apply for a por por number for the variety. Testing may only be done by the DOA laboratory. Testing costs are THB 200 per sample.

14 6 PVCD, OAR, DOA

4 Apply for controlled seed variety certificate (por por number) After obtaining the test results from Procedure 3, the applicant attaches the results and submits along with the application form. Por por numbers can typically be obtained one week after germination results are returned (time for germination test varies by crop). The Certificate for certified seed, issued when the testing results are passed, costs THB 100.

7 3 PVCD, OAR,

DOA

Total

4 procedures 31 days US$37

51 Plants Act Section 16

225


Step Details Time (days) Cost (US$) Agency

Application

There is no national list of seed varieties in Thailand. No government approval is required to introduce and market a new variety, other than obtaining a por por number (procedures described above) to prove that the variety meets mandatory germination and purity standards established for controlled variety. Therefore, variety registration is solely for the purpose of obtaining plant breeder protections. In practice, some breeders choose to register new varieties with the DOA, although respondents noted a number of constraints: • It remains to be seen what protections the Plant Variety

Protection Act affords in practice. • Breeders must submit the parental line (genetic material

used in the breeding of the new seed variety), which is considered proprietary information.

• Breeders may have to negotiate a profit-sharing agreement with the Government of Thailand for species native to Thailand or varieties demonstrated to have been improved in Thailand. Respondents noted that it is unclear which varieties fall under this category.

• In Thailand, breeder’s rights extend for a maximum 12 years compared to 20 years under the UPOV treaty.

• There are restrictions on who can apply for breeder rights. Breeders must be of Thai nationality, reside or operate a business in Thailand, or be of a nationality that is a party to an international agreement on plant varieties to which Thailand is also a party.

The applicant must submit the following application forms: PP 1, PP 1.1, PP 1.2 and PP 1.3, to the PVPD-DOA. Forms must be accompanied by attachments documenting the origin of the new plant variety and the genetic material used in the breeding of the variety – including its breeding process, pictures illustrating plant characteristics, and the Certificate of Company Registration. Applications must include: • Name and features of the new plant variety. • Breeder name. • Details on the origin, breeding process, and genetic

material used in the breeding or development of the new plant variety.

• A sample of the seed material and parental lines. • A profit-sharing agreement in the case where a general

domestic plant variety or wild plant variety is used in breeding the new variety for commercial use.

There is a separate process for registering a local domestic plant variety (native to a region of Thailand and not yet registered) which gives rights to the local community and the listing to a

45-60 34

Plant Variety Protection Division,

Department of

Agriculture (PVPD-DOA)

226

local farmers’ organization, cooperative, or local government. (For more information see the Plant Variety Protection Act, Chapter 4). Applicable Law: Plant Varieties Protection Act, B.E. 2542 (1999) (“Plant Varieties Protection Act or PVP Act”).

Field Testing


Number of Seasons 2 Number of Testing Locations 1 Is the Value for Cultivation and Use (VCU) test required? No Number of Seasons N/A Number of Testing Locations N/A Can VCU test be undertaken simultaneously with the DUS test? N/A

DUS testing is undertaken by the breeder with oversight and periodic inspections by a DOA officer. There are typically 2-3 inspections per growing season depending on the crop. There are no official fees – however, breeders cover the inspector’s travel costs and other expenses. Official requirements for field testing are 1 location and 2 seasons, with comparison against 2 official specified varieties.

365, 2 growing seasons per year (wet and

dry season)

1606 including: • ~677 per

season of field trials – depends on the breeder,

as the breeder

conducts the trials.

• ~254 for inspections. There is no

official inspection

cost, but the breeder

covers the inspector travel and

expenses to visit the test

plots. There are 2-3

official visits per growing season or

4-6 during the course of DUS

trials.

Plant Variety Protection Division,

DOA

227

Technical Review

Some clarifications might be asked from breeder during technical review to complete the report before sending to Director General of Department of Agriculture for consideration. 30 0

Variety Committee,

DOA


Review by the Director General (DG) of the DOA typically takes one month, after which the DG publishes notification of the new variety for a period of two months. If no objections are received, the variety is approved and the DG issues a certificate of registration for the new plant variety. Plant variety protection fees are THB 1,000 per year for a maximum of 12 years of protection.

60 33 Director-General

(DG), DOA


According to the Plant Variety Protection Act, the DG shall publish in the Government Gazette new plant varieties after the issuance of a certificate of registration of the new plant variety. Respondents noted that the DOA also publishes a list of new plant varieties on its website.


procedure

0 DG, DOA

Total 5 steps 508 days US$1,675



No Retesting in Thailand must be conducted according to the law, Plant Variety Acts B.E.2518.


No

The PVP Division attends international conferences with other countries but does not accept other

country’s results due to the stipulations of the PVP Act.


24. Is Thailand party to a regional agreement with respect to common procedures for variety testing, registration, and/or release that is effectively implemented in practice?

No

The ASEAN Economic Community is currently reviewing seed policy frameworks of its members

with the goal of regional harmonization. No regional agreements are yet in place.

a. Is it implemented in practice?

N/A

228


O. Time, cost, and procedures to obtain operational licenses for a fertilizer supplier. Requirements may include import license, fertilizer dealer license, licenses for storage facilities, environmental permit, national or local trading licenses, and inspections.

P. Index on the legal and institutional framework for the fertilizer sector.




Location Bangkok Ownership Domestic, non-state-owned

enterprise



1 License for importation of fertilizer Fertilizer companies apply for an import license at the Fertilizer Control Division (FCD) of the Department of Agriculture (DOA). Import licenses are valid for one year, and companies must renew all licenses before expiration or face strict fines (THB 200 per day for an expired import license and THB 50 per day for an expired selling license). To obtain an import license, applicants must provide documentation on company registration, warehousing locations, and prove that they have been operating for at least 6 months. According to the Fertilizer Act, applicants must demonstrate: (1) Ownership of the business (2) Residence or office location in Thailand (3) Appropriate facilities for manufacture, sale, import, export,

or storage of fertilizer (4) No duplication or use of a similar commercial name of

business to previous licensees Once the company has received an import license, FCD inspectors conduct periodic inspections of the company’s fertilizer storage facilities. Laboratory analysis is conducted by the Agricultural Production Science Research and Development Office, located in Bangkok. Companies must inform the FCD of any changes to the company’s activities, such as new storage

7 68

Fertilizer Control Division (FCD), Department of

Agriculture (DOA)

229

facilities or changes to production/repackaging of fertilizer. Such changes may prompt an inspection.

2 License for sale of fertilizer The license to sell fertilizer includes both wholesale and retail sale, is valid for one year, and can be obtained at one of eight FCD regional offices or at FCD headquarters in Bangkok. Beyond the import license, fertilizer companies may need to obtain up to seven different operating licenses depending on their activities. Based on the case study, only licenses pertaining to the importation and sale (wholesale and retail) of fertilizer are enumerated as procedures. Section 16 of the Fertilizer Act lists: (1) License for manufacturing chemical fertilizer for trade (THB

6,000; Valid for 5 years) (2) License for manufacturing biological fertilizer for trade

(THB 3,000; 5 years) (3) License for manufacturing organic fertilizer for trade (THB

1,500; 5 years) (4) License for sale of fertilizer (THB 200; 1 year) (5) License for importation of fertilizer (THB 2,000; 1 year) (6) License for exportation of fertilizer (THB 1,000; 1 year) (7) License for transit of fertilizer (Re-export permit; THB 400

per shipment; valid for 4 months) NB: Importers and manufacturers that sell their own fertilizer need not obtain a license for sale of fertilizer; the activity is covered under the importation license and the manufacturing license.

7 6 Fertilizer Control Division, DOA


230



10 Comments

1. Is there a fertilizer law(s) and regulations? Yes Relevant Laws: Fertilizer Act B.E. 2518 Amended by Fertilizer Act (No. 2) B.E. 2550, “Fertilizer Act”


v. Set truth-in-labeling guidelines? (e.g. fertilizer bag labels must includes the Netherland’s official language(s), net weight or volume, “guaranteed analysis” of minimum levels of nutrients claimed, directions for use, and health and safety precautions)

Yes

The Fertilizer Act (No. 2) B.E. 2550 stipulates that licensees must provide labels in Thai attached to chemical fertilizer containers and packages. The

licensee must ensure the truthfulness of the statement on the label, including:

a. trade name and the wording chemical fertilizer, standard

chemical fertilizer or organic chemical fertilizer, whichever the case may be;

b. trademark or any mark displaying on the container or package of chemical fertilizer;

c. guaranteed quantity of elements; d. net weight or size of chemical fertilizer package in

metric measurement system; e. name of manufacturer and location of the office and place of manufacturing chemical fertilizer for

trade; f. chemical name and quantity of poisonous substance

contained in the chemical fertilizer; g. other statements stipulated by the Minister of

Agriculture and Cooperatives.

w. Prohibit the sale of open, mislabeled, or adulterated bags of fertilizer? Yes

Fake or non-conforming standard fertilizer sales are prohibited. Repackaged fertilizer bags must list the

guaranteed quantity of fertilizer in the package. Companies may not sell any damaged bags.

c. Establish rules for the accreditation of third-party certification of fertilizer quality? (e.g. an accredited private laboratory network)

No Fertilizer testing and analysis can only be conducted at the DOA laboratory in Bangkok.

3. Is there a regulatory body (such as the Ministry of Agriculture) with the mandate to enforce the law and regulations by punitive action? Yes

The Fertilizer Control Division of the Department of Agriculture (DOA), under the Ministry of Agriculture and Cooperatives (MOAC). Punitive actions include fines or a term of imprisonment. Maximum penalties

are listed in the Fertilizer Act, Chapter 9. 4. Does the regulatory body have the authority to inspect:


Yes

Section 44 of the Fertilizer Act allows inspectors to “enter a place of manufacturing fertilizer for trade, place for sale of fertilizer, place for importation of

fertilizer, place for exportation of fertilizer or place

231

of fertilizer storage” for the purposes of inspection.


Yes See above.

5. Does the regulatory body(s) have the authority to take fertilizer samples and conduct laboratory analysis? (e.g. to measure nutrient content) Yes

Section 44 of the Fertilizer Act allows inspectors to take a reasonable quantity of fertilizer or suspected substances as samples for the purpose of testing or

analysis. a. Do sampling and analysis methods follow international standards (e.g. ISO standards or International Fertilizer Association guidelines)

Yes According to the Fertilizer Control Division.


Yes There are 7 licenses based on the type of activity, with corresponding fees.


No However, fertilizer is considered a sensitive product

and the Ministry of Commerce may set control prices for fertilizers.

232


V. Time, cost, and procedures to transfer farmland. Requirements may include cadastral survey, title and encumbrances search, valuation and inspection, government consent to transfer, stamp duty and transfer tax, and registration of deed of sale.

W. Index on access to property registration information.

X. Index on legal framework for leasing farmland, including customary land.


LLCs Farm size 5 hectares Purchase Price US$ 277,402 Location Nakhon Sawan Province Land Tenure Nor sor 3 land


Note on land tenure in Thailand: There are three main classifications of land registered in the land registry in Thailand: (1) chanote (or nor sor 4), (2) nor sor 3 gor, and (3) nor sor 3. Chanote is a title deed and represents the strongest property right, with clear official boundaries using satellite mapping. “Nor sor” means certificate of utilization – nor sor 3 gor and nor sor 3 are not true title deeds but have some similar benefits of title deeds. Nor sor 3 gor has been surveyed by satellite and is waiting to be designated/transformed into chanote by the Land Department. Nor sor 3 is one level below nor sor 3 gor, with boundaries that are less precise. Nor sor 3 gor and nor sor 3 are more common for agricultural and rural land. Other forms of land rights exist (such as sor kor 1, trajong, and sor por kor 4-01) but have various restrictions - they are less formal, may necessitate physical possession, are typically not registered in the land registry, and may not be mortgaged or transferred except by inheritance. No. Procedure Time (days) Cost

(USD) Agency

1 Verify title, check encumbrances and obtain property valuation Buyer confirms whether seller is the owner and whether the land is under any encumbrances. Appraisal value of the land is also obtained via the Land Department from the Treasury Department (which maintains all land valuations) in order to calculate fees. District-level land offices only have records for their own districts (usually physical records as opposed to electronic), so it is necessary to go to the district-level office where the land is located. The average total of fees for these steps is THB 100.

1 3 Land Department

233

2 Perform cadastral survey Buyer submits motion requesting to check whether the area in the certificate of utilization is correct. This step would be undertaken for nor sor 3 land as boundaries are less precise; it is not as necessary for nor sor 3 gor or chanote land. The Land Department officer must notify and request the participation of adjacent land owners, who are likely to show up at the time of the surveying to protect their boundaries and raise any disputes. The land officer may try to investigate and resolve any conflicts, or the parties may go to court. There are limited surveyors available at the Land Department so official surveying can take up to six months, depending on the queue in the district land office (which may only have one to two surveyors). Surveying can be outsourced to a private surveyor, but the resulting survey is then not considered official. Surveying rates differ by district and fees may vary based on the size of the land, the specific area where the land is located, the condition of the land, the difficulty to access the land, and any separate and additional transportation and other expenses incurred on the days of surveying. In Nakhon Sawan province, the cost of a cadastral survey for a land parcel of less than 50 rai (case study of 5 hectares = 31 rai) is 2,410 THB, according to government fee schedules.

60 82 Land Department

3 Publicize land transfer For nor sor 3 land, the buyer must arrange for announcements regarding the change on ownership to be publicized at Land Department offices at the province, district, sub-district, and village levels as well as on the land itself before registration of transfer of title can occur. Any objections to the land transfer can be raised during the 30-day publication period. Costs are typically THB 30 per announcement.

30 5 Land Department

4 Submit registration for transfer of title and pay stamp duty and applicable taxes The registration fee is 2% of the appraisal value (= THB 164,000). Withholding tax is 1% of the appraisal value (= THB 82,000). Stamp duty is 0.5% of the appraisal value or consideration, whichever is higher (= THB 41,000).

1 9,709 Land Department

5 Issuance of certificate of utilization with new owner The certificate of utilization is revised with the new owner’s name designated.

Simultaneous with Procedure

4 N/A

Land Department


234


Question Index

Score: 4

Comments

1. Is real property registration possible in every state/province? Yes 2. Can real property registration be accomplished via an automated, online process? No

3. Is information and documentation about the process of real property registration available on the Internet? Yes Though in practice, rural farmers may find it

difficult to access this type of information. 4. Are real property registration steps and timeframes clear? Yes

For the types of land currently registered in the land registry, e.g. chanote, nor sor 3 gor and nor sor

3. 5. Are real property registration steps the same regardless of property size? Yes Though the process differs slightly for nor sor 3

land. 6. Are real property registration steps the same regardless of the nationality of ownership? No

Foreigners are generally not allowed to own land. There are certain exceptions, and lengthy

processes would be required. 7. Is the quality of data in the land registry reliable, with few cases of dual or fake titles? No

Only chanote has clear, official cadastral mapping at international standards. The boundaries of other land (such as nor sor 3, trajong, and sor kor 1) are

less precise and can lead to disputes.

Leasing Rural Land Index (0-9) This index is scored for Titled land.


5.3 Comments


Yes


115. Is approval required from a governor or similarly high-level ministerial official to enter into a lease for land? Yes

The rights in land for agriculture of more than 50 rai (= 8 ha) must be specifically granted and allowed by

the provincial governor of each province, though this rule is not often applied in practice.

116. What is the statutory maximum duration, if any, for a lease of land? 30 years If it is over 30 years, the law will automatically reduce

the duration to 30 years. 117. What is the statutory maximum amount of

land, if any, that a formal entity can acquire? No

maximum No limit for general land. See Comments to Q3 above.


No

235

119. Are there often statutory restrictions on the leaseholder’s ability to subdivide, sublease or rent the land? Yes

Under Thai law, the lessee is prohibited from subdividing, subleasing or renting the land, unless

clearly provided otherwise in the lease and with the landowner’s consent.


Yes But this is not an automatic right of the lessee. It depends on the lease agreement and may require

lessor approval. a. Without lessor approval? No

121. Can a long-term (50+ years) leasehold interest in land be registered and recorded in a manner that protects such registered interests? Yes

Under Thai law, the lessee must register the lease with the Land Department to protect their rights. If

the parties have a lease agreement but have not registered it, either party can enforce against the

other only for the first three years. 122. Does the legal framework allow long-term

leaseholders (50+ years) to obtain mortgages on land? No

Under Thai law, the owner is the only person that can mortgage immovable property. There is an exception for Agricultural Land Reform Office

(ALRO) land (i.e. sor por kor 4-01). a. Do such mortgages occur in practice? No

236


V. Types of agricultural collateral allowed by the legal and regulatory framework and accepted by financial institutions in practice.

W. Quality of existing collateral registries for movable collateral.

X. Strength of legal framework for warehouse receipts systems.



Used in Practice

Type of Charge


1. Farm equipment

Yes No

Pledge, mortgage (for large

machinery)

Yes (large machinery

only)

A pledge can be used in theory for all movables. However, movables such as tractors, crops, inventory, and livestock are not accepted as collateral in practice because in order for a

pledge to be effective, the pledged assets must remain in the control of the lender.

In the case of equipment, two exceptions are: (1) large machinery (such as milling equipment) which

is attached to land and can be registered in the Machinery Registry and (2) hire purchase and

leasing options for farm equipment provided by the Bank for Agriculture and Agricultural

Cooperatives (“BAAC”), for which title remains in the name of the bank.

2. Crop in field No No - - See #1 above.


Yes No Warehouse receipts Yes

Warehouse receipts can be issued and are “registered” at a warehouse, with a warrant used to pledge the goods to a lender by endorsement

rather than possession (Civil and Commercial Code, Section 775). However, except for the government-sponsored Rice Pledging Scheme

(and maize and cassava in the past), warehouse receipts for agricultural goods are not currently

237

accepted by many lenders in practice as they are deemed too difficult to value.

4. Livestock

Yes No

Mortgage over

registered beasts of

burden only (for

example, elephants

and buffaloes)

Yes

See #1 above. Even mortgages on beasts of burden are no longer commonly accepted as

collateral and the Beast of Burden Registry is not used for collateral purposes.

5. Inventory Yes No Pledge No See #1 above. 6. Patented plant variety Law is

silent No - -

7. Futures contract

Yes No N/A No

The Agricultural Futures Exchange of Thailand (“AFET”) is the government owned market place

to trade agricultural futures in rice, rubber, tapioca and canned pineapple. The contracts that are traded on this electronic securities (futures)

exchange are standard form contracts as prescribed by AFET. However, these futures

contracts would not be accepted as collateral in practice because they would be too difficult to

value. 8. Accounts receivable

Yes Yes Conditional assignment

No

A conditional assignment can be used, i.e. an agreement giving notice to the obligor that in the case of default payment should go to the lender. This is commonly used in other sectors, but not

for agricultural products. 9. Buy/sell agreements Yes Yes

Conditional assignment No See #8 above.


Yes Yes Mortgage Yes

The most common types of accepted collateral in Thailand are land and buildings and large

machinery (guarantees and joint liability groups are also used). Mortgages are only accepted for chanote, nor sor 3 goh, and nor sor 3 land, with

diminishing value for collateral purposes.

238



78. What type of registry exists for registering movable collateral? Please specify the name of the movable collateral registry(ies). Multiple

Registries

Machinery Registry maintained at each district office in each province and the Central Machinery Office in

Bangkok. Beasts of Burden registry maintained at each district

office in each province, but is no longer used for registering liens.52 This index score is based on the

Machinery Registry. 79. Can security rights for a broad range of

tangible and intangible movables (i.e. equipment, crops, livestock, accounts receivable, inventory, futures, etc.) be registered in the movable collateral registry?

No

Security rights in most movables are not registered in any registry. Only large machinery is registered

(under the Machinery Registration Act). Security rights in beasts of burden may be registered in the

Beasts of Burden registry, but this is no longer commonly done.


Yes


No

There is a centralized database maintained by the Central Machinery Office for the registration of heavy machinery and security interests in heavy

machinery. Each district office is supposed to send information to Bangkok to enable the central

database to be kept up to date. The databases of district offices and other registries are not

centralized. 82. Does the movable collateral registry operate a

fully electronic database system (as opposed to paper-based)?

No Machinery Registry is only partly electronic.


For conducting searches in the database of the Central Machinery Office, it is necessary to go to the Bangkok office to conduct electronic searches. Other regional databases must also be searched in person.


Yes

As the database of the Central Machinery Office requires data based on a paper-based system, it depends on correct filings having been done and

correct entry in the system, though data is generally reliable. Data in the Beasts of Burden Registry is not

reliable. 85. Is real-time information from the movable

collateral registry widely accessible to the general public without any restrictions, including by those located in commercial centers outside of the capital?

No

In the case of registered machinery and security interests registered on such machinery, this is public

information that can be searched by visiting the Central Machinery Office in Bangkok. Apart from this

registry office, no district branches and no other registries can be searched without a court order or by power of attorney granted by the owner of the

52 Motor Vehicles Registry exists but does not function as a collateral registry. The registry does not collect records of details on liens. Creditors take possession of the vehicle registration book when there is a lien on a vehicle.

239

asset specifically appointing a third party to be granted the power to conduct such searches.

86. Can registration in the movable collateral registry be performed within a reasonably rapid time frame and with flat, reasonable fees? No

In practice, respondents noted that the process can be long and complicated. Officials may require review

of multiple documents and repeat trips to examine machinery, the expenses for which need to be

covered by the company registering the machinery. 87. Can a search of the movable collateral registry

be performed within a reasonably rapid time frame and with flat, reasonable fees (i.e. free or less than US$5)?

Yes For the Machinery Registry.


This is provided that the security interest that has been filed is in the form acceptable to government

authorities.


Question Index

Score: 10.63

Comments

97. Are there any laws or regulations pertaining to warehouse receipts systems currently in force? Yes Provided for under the Civil and Commercial Code

of Thailand.53 98. Do such laws or regulations specify an entity

tasked with registration, licensing, and oversight of warehouses? Yes

The Bureau of Market System Promotion and Administration under the Department of Internal

Trade in the Ministry of Commerce oversees public warehouses. Other agencies may also be involved.

a. Is such entity private or public? Public 99. Does the legal and regulatory framework

provide clearly established criteria for registering a warehouse, such as specifications for the physical facility and equipment (ex. silos, cleaners, fumigators)? Yes

In the “Manual of Regulation Procedures for Warehouse Business” and “Manual of Regulation

Procedures for Silo and Cold Room Business” issued by the Bureau of Market System Promotion and

Administration under the Notification of the Ministry of Agriculture on “Terms and Conditions to Control Warehouse Business 2535 B.E.” and the Declaration

of the Revolutionary Council No. 58. 100. Does the legal and regulatory framework

require warehouse operators to be licensed and establish clear requirements for obtaining an operator license?

Yes See #3 above.

101. Does the legal and regulatory framework provide for commodity standards and grading systems? Yes

Ministry of Commerce issues mandatory grades and standards for export of 11 widely-traded goods. For

domestic trade, individual buyers in the private sector set their own grades and standards.

53 The Civil and Commercial Code recognize crop in the warehouse as collateral, and farmers can pledge goods via a warrant given to lenders. There is also a legal framework for warehouses. Warehouses must be registered and there are minimum standards and requirements for both warehouses and warehouse operators. However, it does not appear that there is any use or acceptance of warehouse receipts for agricultural goods.

240

a. Are such commodity standards and grading systems enforced effectively? No

Yes, for exports of certain goods. No for domestic trade – guidelines are more simple and voluntary,

except for rice where stricter standards are used by the private sector.


Yes See #3 above.


Yes

The laws and regulations allow for inspectors from the regulating entity to conduct inspections.

Warehouses also provide regular reports to the regulating entity. However, regular inspections are

not normally undertaken in practice. 104. Does the legal and regulatory framework

provide for consequences/penalties for non-compliance of the handling of commodities in storage?

Yes If the warehouse is used for the storage of food, then

there are standards and penalties for failure to comply with such storage standards.


Yes Yes, mentioned generally in notification and declaration noted in #3 above.


Yes In Civil and Commercial Code, Section 778.


No No, though they are registered in the warehouse

where the goods are stored, and such registry can be searched (but not by general public).


No


In Civil and Commercial Code, Section 778. All items listed below are necessary for receipt to be effective.

a. Name and address of licensed warehouse operator Yes Place of storage.

b. Designation and grade of warehouse No c. License number of warehouse No d. Name and address of depositor Yes Name or trade name and address of depositor. e. Relationship between warehouse operator and depositor if not a strictly disinterested custodianship

No

f. Description and quality of goods Yes Nature of goods stored, their weight or bulk, and the nature, number and marking of the packages.

g. Whether goods are insured or not Yes

If goods stored are insured, the amount of the insurance, the period for which the goods are

insured, and the name or trade name of the insurer. h. Net weight of goods Yes See 13.f. i. Other: [ ]

Yes • Remuneration for the storage

• Place where and the time when the warehouse receipt was made out

241

• Period for which the goods are stored, if that has been fixed


No

242


CC. Time, cost, and documents to export a widely-traded agricultural commodity.

DD.Index on legal framework for phytosanitary certificates for export.

EE. Time, cost, and documents to import hybrid seed.

FF. Index on trade facilitation measures

Product Rice Export Consignment


Value US$20,000 Point of Exit Laem Chabang Port




Documents to Export Commodity Certificate of Rice Standards (Quality Certificate)

Phyosanitary Certificate

Invoice

Packing List Certificate of Origin Customs Export Declaration


TOTAL: 7 documents


Time (days)

Cost (USD)


Customs Clearance and Inspection 1 $ 65-85

TOTAL 9 days $ 231

243


54 Seed samples are sent to the DOA laboratory in Bangkok for testing for quality, disease and GMOs. The maximum total time for seed analysis results is one month. Full container loads (FCL) of seed may enter Thailand while testing is being conducted and remain in quarantine at the seed company’s warehouse. Less-‐than-‐container loads (LCL) must remain at DOA storage facilities at the port until the germination test results are obtained (typically 10-‐15 days) The shipment may be released before GMO test results are obtained, which takes up to one month. The importer must pay demurrage charges on containers during this time. The AGRI case study measures the time and cost for import of a full container load, therefore the total time for customs clearance is 3 days. For a less-‐than-‐container load, customs clearance may take up to 34 days.


Notification of import of controlled seed

Invoice Packing list

Non-GMO Certificate


Bill of landing

Certificate of origin

Seed analysis certificate

Customs import declaration


TOTAL: 11 documents





TOTAL 25 days $315

244




3 Comments

1. Is pre-shipment document submission available?

Yes

Customs import declaration may be made electronically in advance of ship arrival through the EDI system, once the bill of lading is obtained (3-4

days after ship departure from port of origin). However, seed-specific documentation must be

presented to DOA upon arrival of the goods, along with notification to inspect the consignment.

2. Do customs and other agencies utilize risk management techniques and audit-based controls to reduce the frequency of cargo inspections? Yes

Cargo is screened against selection criteria and categorized as ready for clearance (green) or requiring

physical inspection (red). Due to phytosanitary concerns, all seed consignments are inspected and

sampled. 3. If goods must be inspected by customs as well as by other agencies, do customs ensure that the inspections are coordinated and, if possible, carried out at the same time?

No

DOA inspectors must be notified separately. There are two different offices within DOA involved in seed inspection and testing: the Plant Quarantine Division

(for disease and non-GMO tests) and the Plant Variety Control Division (for germination and purity tests).

4. Are consignments of imported seed allowed to enter Thailand (but remain in storage) while samples undergo laboratory analysis?

No

Full container loads (FCL) of seed may enter Thailand and remain in quarantine at the company warehouse. Less-than-container load (LCL) must remain in the container at DOA storage facilities at the port until germination results are returned. In total, laboratory

testing typically takes 1 month for germination, disease, and GMO tests.

5. Is timely and accurate trade and customs information made publicly available? Yes

245




5 Comments


Yes Thailand is an IPPC member and has enacted the

Quarantine Act 2507 (1964).


Yes


No Exporters typically obtain information on phytosanitary import requirements from their destination buyer, not

from the Thailand NPPO.


Yes

5. Are all fee schedules (for sample collection, testing, certificate, administrative) publicly available? Yes Listed in Quarantine Act 2507 (1964)


No

Respondents noted instances of phytosanitary certificates being rejected by destination countries. Respondents

noted that destination country phytosanitary requirements can be highly variable, strict, and politicized.

Some countries require proof that the consignment is free from diseases that do not exist or are very rare in

Thailand and for which the DOA does not have the capacity to test for.


Yes


No

246


V. Index on legal framework for contract farming. W. Index on system for establishing public grades

and standards for a widely-traded staple crop. X. Index on access to expedited or alternative





Yes


No


No

Not for all products. For example, there are six commodity boards. The Sugar Board sets market

pricing for sugar and implements a revenue sharing scheme between millers and producers.

Other commodity boards do not control producer prices but may guarantee minimum prices for

producers.

Rice prices are established by the National Rice Policy Committee under the government-sponsored Rice Pledging Scheme. Parties to a contract are free to establish their own prices, but because pledging prices are higher than market prices, they become

the prevailing rate.

Oil palm retail prices are set by the Department of Internal Trade.

247


Yes Yes, defined in the Civil and Commercial Code

(CCC). Can be made into an agreed upon condition in contract.


Yes Yes, in the CCC. Can be agreed in the contract.


Yes


Yes But in practice, this is quite difficult to obtain. This may occur through verbal agreement between the

parties.





Yes

The Ministry of Commerce has the legal mandate to issue grades and standards, but only for standardized commodities for export (Export Standards Act B.E.

2503). Currently, these cover what are considered to be the 11 most economically important commodities

in Thailand. For the most part, there are no mandatory public grades and standards for domestic trade. Some commodity boards may set voluntary

grades, such as for sugar, and some committees may set mandatory grades for pledging schemes.


Yes

76. Are there grades segmenting the most widely traded staple crop in Thailand that are based on quantifiable attributes (e.g. weight, size, shape, density, firmness, color, taste, odor, maturity, blemishes, moisture content)?

Yes

Yes, for export of widely-traded crops such as rice - Notification of Ministry of Commerce, Subject: Rice Standards B.E. 2540 sets grades for different varieties of rice. But not for all crops being exported and not

for domestic trade, though domestic traders and millers may voluntarily follow simplified versions of

grades used for exporting, where available. 77. Are public standards consistent with good

scientific practices and with guidelines issued by international standards-setting bodies (e.g. Codex Alimentarius, ISO)?

Yes Where available, ISO standards are considered.

248


Question Index

Score: 7 Comments


No No, and respondents noted that court proceedings in

Thailand are very slow. This index is scored for arbitration.

124. Do alternative mechanisms to the formal court system exist to resolve contract disputes (i.e. mediation, arbitration)? Yes

Arbitration Act B.E. 2545 is the Act that governs arbitration in

Thailand. Courts encourage the use of arbitration and informal mediation. However, in practice farmers have limited access to alternate dispute resolution

mechanisms. 125. Do expedited or alternative mechanisms

adequately apply standard contract law principles or arbitration/mediation principles (as applicable) when resolving disputes?

Yes

126. Are the costs entailed in using such expedited or alternative mechanisms reasonable and not prohibitive (ex. total costs do not exceed the amount in dispute)? Yes

It may depend on the arbitration institute. The Thai Arbitration Institute (TAI) costs are considered

reasonable and depend on the number of arbitrators and related expenses such as transportation,

photocopying, certification of copies, etc. Costs for Chamber of Commerce arbitration depend on the amount of the claim, but are no more than THB


Yes

Committees comprised of public and private sector entities, academics, associations, and commodity boards are formed when developing standards,

though it is not clear how inclusive and transparent the process truly is.

79. Is there a dedicated, competent regulatory body in charge of grades and standards, or coordinated efforts where multiple agencies are involved?

Yes

Ministry of Commerce is in charge of grades and standards for export products. The Department of Agricultural Extension may work to help farmers meet such grades and standards for the domestic

market. 80. Are there sufficient guidelines and regulations

issued with respect to grades and standards, and are these guidelines and regulations made accessible to all market participants?

Yes Yes, with respect to public grades and standards for export commodities such as rice. Private standards

for rice may actually be higher than public standards.


Yes Yes, with respect to public grades and standards

when exporting commodities such as rice. There are several accredited public laboratories in Thailand.

82. Does the government implement a weights and standards system to ensure uniformity of measurement across all food and agriculture-related commerce? No

Office of Methodology and Measures, under the Department of Internal Trade in the Ministry of

Commerce. Respondents noted there has not been much progress and implementation and enforcement

is weak. Relevant law: Weights and Measures Law B.E. 2466

249

150,000.

4.a. Are the costs entailed typically less than that of the traditional court system? No Arbitration fees may exceed the cost of a court case,

depending on the claim. 127. Is there a minimum threshold to the

monetary amount being disputed that must be met in order to use expedited forums?

No

5.a. If YES, does this threshold amount pose a barrier to claims brought by small or medium-sized

agribusinesses?


Yes Arbitration may be somewhat faster, though you may

still end up going to court to enforce the arbitral ruling.

129. Are expedited or alternative mechanisms readily available outside of Bangkok? Yes

Most arbitration services (e.g. TAI) are centered in Bangkok. Additional services (e.g. Chamber of

Commerce) may be available in a few provincial centers.


Yes

250

Starting and Operating a Farm Streamlining the regulatory burden to start and operate a farm reduces barriers to formalization for small- and medium-scale commercial farms. Decentralized government offices improve rural access to government services. Efficient and well-implemented regulations also require coordinating the activities of multiple government agencies, while balancing policy considerations such as land and resource use, human health, and environmental safety. Indicators:

Q. Time, cost, and procedures for business registration and licensing of a mid-sized staple grain farm. Requirements may include national or local trading licenses, chemical storage requirements, workplace or employee registration, environmental permits, and company registration.

R. Index on access to business registration information.

Case Study Farm Crop Maize Farm size 50 hectares Location Eastern Region Legal Form Sole Proprietorship Land tenure 50 year lease Market Farm gate, local market

Uganda

Procedures, Time, and Cost to Start-up a Farm58


Cost (USD)59 Agency

1 Registration of Business Name The Business Names Registration Act (Cap 109) requires an individual having a place of business in Uganda and operating under a business name, which does not consist of a true surname of the individual. Registration is with the Uganda Registration Services Bureau. For sole proprietorship, the fee includes search and registration, which in most cases is done concurrently. The process is manual and centralized, requiring travel to Kampala. No stamp duty for sole proprietorship. Separate steps are required to: 1) go to URSB, 2) get tax assessment, 3) go to cashier, 4) make payment at bank, 5) take bank slip back to cashier, 6) reconciliation and payment confirmation by the cashier, and 7) take receipt back to URSB to register.

4 16 Uganda Registration

Services Bureau (URSB)

2 Application for Tax Identification Number Registration is done online at ura.go.ug. 1 0 Uganda Revenue

Authority (URA)

58 Data highlighted in yellow is based on incomplete/unconfirmed data 59 Exchange rates as of March 2012 (USh 2,416.40 per USD). Costs are rounded to the nearest dollar.

251

3 Registration for National Social Security Fund (NSSF) The requirement for registration with NSSF applies only to employers employing 5 or more employees. Upon registration, an employer is required to pay to the fund 15% on the total monthly wages of an employee. The employee’s standard share of contribution is 5% and the employer pays the remaining 10%. A physical form must be submitted in person. The NSSF has regional branches.

5 0 National Social


4 Apply for Pay as You Earn (PAYE) The employee is required to withhold and remit PAYE on the employee's wages. This does not apply to employees earning less than UGX 130,000/month.

1 0 URA

5 Obtain Environmental Impact Assessment Typically for larger-scale agriculture. Recently became mandatory when setting up a farm. Inspectors come from the district office. 3 25

National Environmental

Management Agency (NEMA)

6 Obtain Local Trading License Local governments have different policy documents with schedules of charges, and it is not always clear what you will be charged.

5 54

Municipal/Town Council

7 Obtain Local Produce License

1 33 Ministry of Tourism, Trade and Industry




Comments


Yes Yes. All registration documentation and information are publicly available.


No Not all, but the requisite forms are online.

47. Is registration possible in every state/province? No Uganda Registration Services Bureau (URSB) is located only in Kampala. There are no branches

252

elsewhere. 48. Are registration steps the same regardless of


Yes The steps are the same. The difference will depend on the nature of the corporate entity (i.e. sole proprietorship, partnership, or company).


Yes Yes, same steps, also note the Companies Act Cap 110 also provides for registration of a foreign company in Uganda.

253

Obtaining Inputs: Seed Strong seed regulations and institutions promote farmers’ access to high-quality seed while making the licensing process for suppliers efficient and transparent. Competition is key: more suppliers and an extensive distribution network ensure a greater supply of affordable, quality seed. Overly-burdensome regulations can stifle the sector by discouraging new entrants and creating incentives for agrodealers to operate informally. Indicators:

Q. Time, cost, and procedures to obtain operational licenses for a seed supplier. Requirements may include import license, seed dealer license, license for storage facilities, national or local trading licenses, and inspections.

R. Time, cost, and procedures to register a new proprietary seed variety.



Type of Seed Hybrid Maize Location Kampala Ownership Domestic, non-state-owned

enterprise



Cost (US$) Agency

1 Register as a Seed Company Registration as a seed company covers (1) production, (2) processing, and (3) marketing, including the import and export of seed. Registrants specify the types of activities in which they will be engaging. The registrant must first be registered with the Uganda Registration Services Bureau. Requirements include having qualified personnel (agronomists, breeders, etc.), an appropriate warehouse, and equipment. A committee within Ministry of Agriculture vets the application. NSCS is based in Kampala, without regional branches. Renewal costs UGX 100,000. The Agriculture Seeds and Plant Act (Cap 28) provides that all seed importers are required to apply to the NSCS for the release or listing of their varieties. A person who intends to undertake the business of importing or exporting seeds is required to apply to the NSCS for a license. The procedure for obtaining the above licenses is to be elaborated in regulations that are yet to be passed by the Parliament of Uganda. The recent seed law passed in 2011 will create a new seed-merchandising license for retail sale of seed. Current laws do not require separate licenses for seed agrodealers and retailers. The stocking of seed is allowed under the general agrodealers license to stock fertilizer and agrochemicals. Licensing fees are expected to increase substantially with the new law.

30 237 National Seed Certification Service (NSCS)

254



Cost (USD) Agency

1 Application for National Performance Trials Company applies and gives NSCS a sample of the seed in order to do National Performance Trials in the locations NSCS deems necessary.

1 0 National Seed Certification Service (NSCS)

2 National Performance Trials (NPT) The product must undergo two seasons of field tests in seven sites. For maize, the NPT can be completed in one year due to the two growing seasons per year. NPT costs UGX 375,000 per entry per site per season, paid to NARO. Although in practice NARO has not been charging NPT fees, private companies have not been registering new crop varieties either. New varieties are developed by researchers and by NARO, who then sell the seed or the rights to private companies.

365 2,100 National Agricultural Research Organization (NARO)

3 Application for Distinctness, Uniformity and Stability (DUS) Test The seed company applies for DUS testing by NSCS following successful field tests during the NPT. DUS cannot be completed simultaneously with NPT, although it could be initiated during the second season of NPT.

1 0 NSCS

2 Inspection of Premises NSCS inspects a company’s premises as part of the process for registering as a seed company. Routine inspections of factory, stores and seed premises occur twice a year, once for each season.

Simultaneous with Previous Procedure

0 NSCS

3 Register with Uganda Revenue Authority (URA) as Seed Importer

1 Uganda Revenue Authority (URA)

4 Obtain National Trading License 1 124 Ministry of Trade

5 Obtain Local Trading License Local governments have different policy documents with schedules of charges, and it is not always clear what you will be charged. Generally costs 100,000-200,000 UGX.

5 62 Municipal/Town Council


255

4 DUS Test DUS testing is completed during two seasons at two separate sites. NSCS may test the variety at three sites (highland/midland/lowland locations) depending on the plant material. DUS cost is UGX 375,000 per entry per site per person.

365 600 NSCS

5 Approval by National Variety Release Committee (NVRC) The NVRC sits twice a year and evaluates the candidate material. The NVRC is comprised of a number of stakeholders, including breeders, universities, farmers, the Ministry of Trade, and Ministry of Agriculture. The Committee will issue a report including a recommendation for release. A typical registration process will include harvesting in June, applying to the NVRC in July, and approval by the committee in October or November.

120 0 National Variety Release Committee (NVRC)

Total 5 procedures 852 days USD $2,700






27. Is Uganda party to a regional agreement with respect to common procedures for variety testing, registration, and/or release that is effectively implemented in practice?


256

Obtaining Inputs: Fertilizer Strong fertilizer regulations and institutions promote farmers’ access to high-‐quality fertilizer while making the licensing process for suppliers efficient and transparent. Competition is key: more suppliers and an extensive distribution network ensure a greater supply of affordable, quality fertilizer. Overly-‐burdensome regulations can stifle the sector by discouraging new entrants and creating incentives for agrodealers to operate informally. Indicators:

Q. Time, cost, and procedures to obtain operational licenses for a fertilizer supplier. Requirements may include import license, fertilizer dealer license, licenses for storage facilities, environmental permit, national or local trading licenses, and inspections.

R. Index on the legal and institutional framework for the fertilizer sector.

Case Study Fertilizer Supplier Activities Import, Wholesale Distribution,

and Retail Sales (does not manufacture or repackage fertilizer)


Location Kampala Ownership Domestic, non-‐state-‐owned

enterprise


No. Procedure Time (days) Cost (USD)

Agency

1 Obtain Suitability of Premises License Note: The procedures to obtain licenses to operate as a fertilizer supplier and as an agrochemical supplier are the same. The license lasts 2 years. The Board is located in Entebbe, requiring multiple trips to drop off application and pick up license. It Takes 3 months from application to inspection and an additional 3 months for Board approval. The Board only meets once a quarter or sometimes twice a year, and the board needs additional funding to meet.

180 21

Agrochemicals Board

2 Inspection for Suitability of Premises License Warehouses are inspected against a checklist of criteria. Inspector writes reports and presents to Technical Committee, who review and forward to Agricultural Chemicals Board for approval. Long delays occur due to Board being based in Entebbe – the Board doesn’t go out to do inspections unless it has multiple premises to inspect. Can take up to a year.

Simultaneous with Procedure 1

0

Agrochemicals Board

257



Comments

1. Is there a fertilizer law(s) and regulations? Yes No specific legislation on fertilizer. Fertilizers under law are defined as agrochemicals and regulated under the Agricultural Chemicals Control Act (1989) and (Registration and Control) Regulations (2006). A draft regulation “Fertilizer Control Regulations, 2010” is in the final phase for gazettement to implement the Act.


3 Obtain Dealership License License lasts 3 years. Registrant must meet minimum academic qualifications, and informal agreement with Uganda National Agro-Input Dealers Association (UNADA) to take 5-day course on judicious and safe handling of chemicals such as fertilizer and pesticides. License covers importing, wholesale and retail trade. Repackaging requires seeking authority in writing, though a license is not required. Renewal is UGX 150,000. Only 30% of agrodealers are actually licensed.


62 Agrochemicals Board

4 Inspection for Dealership License Annual Inspection.


0 Agrochemicals Board

5 Payment for Suitability of Premises and Distribution Licenses Payment is a lengthy process involving multiple steps: 1) go to Commissioner of Crop Protection (in Ministry of Agriculture) for permission to pay, 2) take permission to cashier at Ministry of Agriculture to get authority for bank to accept your money, 3) take money and authority from cashier to bank, 4) make payment, 5) take bank slip back to cashier after you’ve paid, 6) cashier must reconcile with bank to ascertain that you’ve really paid and money is in the account, 7) once have receipt from cashier, take to Commissioner to prove you have paid, and 8) receive license.

15 0 Commissioner of Crop Protection

6 Obtain Local Trade License Costs UGX 100,000-200,000

5 62 Municipal/Town Council


258

x. Set truth-in-labeling guidelines? (e.g. fertilizer bag labels must include the Netherland’s official language(s), net weight or volume, “guaranteed analysis” of minimum levels of nutrients claimed, directions for use, and health and safety precautions)

y.

Yes Agricultural Chemicals Control Regulations, Sections 21-30 and in the forthcoming Fertilizer Control Regulations.

z. Prohibit the sale of open, mislabeled, or adulterated bags of fertilizer?

Yes

Agricultural Chemicals Control Regulations, Sections 21-30 and in the forthcoming Fertilizer Control Regulations.

aa. Establish rules for the accreditation of third-party certification of fertilizer quality? (e.g. an accredited private laboratory network)

Yes The Act under Section 11 provides for accreditation of a suitable analytical laboratory. This function is vested in the Agricultural Chemicals Board (ACB)


Yes The ACB within the Department of Crop Inspection and Certification is the body within the Ministry of Agriculture charged with day-to-day enforcement of the law.


a. Fertilizer production and storage facilities? Yes The Agricultural Chemicals Control Act, Section 9 provides for appointment of inspectors and Section 12 provides for the power of the inspectors to inspect.


Yes Same as above.


Yes Same as above.


Yes Guidelines are set by the Uganda National Bureau of Standards. Testing protocols are not listed in the Control of Agricultural Chemicals Act or Regulations but will be outlined in the forthcoming Fertilizer Control Regulations.


No Fertilizer suppliers must obtain a Dealership License to import, distribute or trade in and for retail sale.


No

259

Accessing Rural Land Farmers must have a secure interest in land to invest in the long-‐term success of their farms. Yet the transfer of rural land is often lengthy and unpredictable, reflecting poor property systems, including: fake or non-‐existent titles, decaying paper records, inaccurate land surveys, and lack of surveyors. As a result, rural land transfers are costly and inefficient, and may not provide farmers with the security they need. Indicators:

Y. Time, cost, and procedures to transfer farmland. Requirements may include cadastral survey, title and encumbrances search, valuation and inspection, government consent to transfer, stamp duty and transfer tax, and registration of deed of sale.

Z. Index on access to property registration information.

AA. Index on legal framework for leasing farmland, including customary land.

Case Study Land Transaction Buyer & Seller Both Buyer and Seller are LLCs Farm size 50 hectares Purchase Price USD 26,644.88 Location Eastern Region Land Tenure Titled land



Cost (USD) Agency

1 Request Title Search

1 0 Ministry of Lands, Housing, and Urban Development

2 Pay Search Fee at Bank Search fee is UGX 10,000, plus 2,000 bank transfer fee.

1 5 Bank

3 Conduct Title Search Carry out search in the land registry to confirm that the Seller is indicated as the registered proprietor and that there are no encumbrances.


4 Obtaining of Valuation from Chief Government Valuer for Purposes of Assessing Stamp Duty There are three government valuers who inspect all land transactions in Uganda. The valuer in theory would inspect the premises and issue an assessment of valuation; in practice inspections are rare. Takes 10 working days on average.


260


Question Index

Score: 2 Comments


Yes There are stipulated land registries in different districts.


No The Ministry of Lands is in the process of computerizing all land records.


No This is on account of the absence of computerized records.


No In the law books yes, in practice no because of lack of manpower at Lands Registration Office. The procedure may take longer than what is stipulated by law.


Yes

5 Obtaining of Consent to Transfer from Commissioner UGX 250,000 is an estimated figure for obtaining consent to transfer title of land. This figure is dependent on the stamp duty paid but is usually in the range of 250,000-400,000. Relevant Law: The Registration of Titles Act (Cap 230).

1 103

Commissioner of Land Administration

6 Payment of Stamp Duty 1% of the value assessed by the Chief Government Valuer. Stamp duty is paid at a bank and payment clearance takes 2-3 days. Bank will notify Uganda Revenue Authority (URA) that payment has been received.

4 267 (1% of assessed value)

Bank

7 Assessment of Registration Charges Payment is made at the bank.

1 4 Lands Registrar

8 Document Embossment Embossment serves as proof of payment.

1 0 Ministry of Finance

9 Submit Documents to Register of Titles Submit all documents and evidence of payment of stamp duty, registration fee, and bank charges. Registrar will effect a transfer of the Title Deed into the name of the purchaser. The Title Deed will indicate an instrument number for the transfer and the time at which the transfer has been effected. Average 10 working days.

10 0 Register of Titles


261


No Under the Constitution of Uganda and the Land Act (Cap 227), non-citizens cannot acquire mailo or freehold land. Non-citizens can only acquire leasehold property. The steps involved in sale of leasehold property are the same as the steps involved in sale of mailo or freehold property.


N/A Data for this question was not collected for this country.



Comments


Yes Companies are corporate bodies that have the capacity to hold a leasehold interest in land. (The Companies Act, 2012). Cooperatives are also accorded corporate personality under the Cooperative Societies Act, Cap. 112 and can, therefore, hold land. (Section 28). Partnerships are not accorded legal personality under the law. Therefore, the land can only be held by the individual partners and not the partnership per se. The same is the case for sole proprietorships, because such entities are registered as business names and, therefore, have no corporate personality.


Yes Entities that are accorded legal personality under the laws of Uganda, such as companies incorporated under the Companies Act, 2012, can lease land. With regard to customary land, the holder of a certificate of customary ownership may lease land where the certificate does not restrict it. (Section 8 of the Land Act, 1995)


No For customary land, approval and consent must be sought from both the indigenous people who own the land, as well as the area land committee and District Land Board.



The law does not prescribe a maximum duration for the lease of land by citizens of Uganda. However, noncitizens can lease land only for a maximum period of 99 years. Under the Land Act (Section 40(7)), 1998, a corporate body can be considered a non-citizen and be subject to maximum (such as where the controlling interest and decision making in the company is, or can be held by, noncitizens.)

262




No There are no statutory restrictions. However, in the case of customary land, the holder of a certificate of customary ownership will only be permitted to use the land in accordance with the rights and interests specified in it (Section 8 of the Land Act, 1995). Consequently, the holder of the certificate can only undertake those activities that are not restricted by the certificate.


No Where the lease is subject to a mortgage, the mortgagee’s consent must first be sought before subletting in order for the sublease to be valid and binding against the mortgagee only if the lease agreement provides that such consent should be sought. (See Section 109 of the Registration of Titles Act, Cap 230 which is saved by the Mortgage Act, 2009).


Yes

a. Without lessor approval? Yes Depends on the terms of the lease. It is permitted if the lease agreement allows for free transfer without landlord’s consent. The Land Act, 1995 does not expressly prescribe consent as a prerequisite for the transfer of an interest in land. However, this is subject to the conditions prescribed in the certificate of customary ownership, which may expressly require the holder to seek consent before transferring a leasehold interest in land.


Yes The Registration of Titles Act, Cap. 230, provides for the registration of leaseholds and the issuance of certificates of title to the proprietors of leasehold interests in land. With regard to customary land, one may have one’s interest in land registered and may acquire a certificate of customary ownership in respect of that land. The certificate shall be taken to be conclusive evidence of the customary rights and interests specified in it (Section 7 of the Land Act, 1995). In addition, the law prescribes that a lease can have the effect of passing an interest in customary land only after it has been be registered by the recorder (Section 8(4) of the Land Act, 1995).

263


Yes The Mortgage Act, 2009 provides that a person holding land under any form of land tenure (including leasehold and customary) may mortgage his or her interest in land or a part of it (Section 3). The Land Act, 1995, also recognizes the creation of mortgages over customary land where the certificate of customary ownership does not restrict it (Section 8(2)) and provided that mortgages on customary land are in accordance with the customary law applicable to the land in question (Section 7 of the Mortgage Act, 2009). In instances where a family owns the customary land, the consent of the spouse(s) and the children of the mortgagor have to be sought as a condition to creating a mortgage over the land. (Section 7(1) of the Mortgage Act, 2009)

g. Do such mortgages occur in practice? Yes In practice, mortgages over customary land do occur. However, such instances are limited due to the custom-based restrictions that may be attached to customary-land ownership, especially with respect to communal land. A person may create a mortgage over customary land in either of the following ways: • A borrower may deposit a certificate of customary ownership with the lender to secure payments. • A holder of a lease interest in customary land may effect an informal mortgage; this refers to the execution and attestation of an undertaking, the clear intention of which is to charge the mortgagor’s customary land with the repayment of money or money’s worth obtained from the mortgagee and includes a mortgage on unregistered customary land • Execution of an instrument in the prescribed form creating a mortgage over one’s land (Section 3 of the Mortgage Act, 2009)

264

Access to Finance Access to finance is one of the largest obstacles faced by agribusinesses everywhere. Agribusinesses, particularly farms, often have few assets beyond their land and movable assets, such as farm equipment, crops in the field, and inventory. A secured transactions framework – the focus of this topic – allows agribusinesses to unlock the value of their assets, particularly movable assets, to obtain a loan. Building blocks of a secured transactions system, such as a movables collateral registry or warehouse receipts system facilitate access to finance for the agricultural sector. Indicators:

Y. Types of agricultural collateral allowed by the legal and regulatory framework and accepted by financial institutions in practice.

Z. Quality of existing collateral registries for movable collateral.

AA. Strength of legal framework for warehouse receipts systems.

Strength of Legal Right Index (0-10), Index Score 8

Types of Collateral Allowed

by Law Comments

1. Farm equipment Yes Chattels Transfer Act (Cap 70)

2. Crop in field Yes Chattels Transfer Act (Cap 70)

3. Crop in warehouse Yes Warehouse Act

4. Livestock Yes Chattels Transfer Act (Cap 70)

5. Inventory Yes Chattels Transfer Act (Cap 70)

6. Patented plant variety No

7. Futures contract No No applicable law

8. Accounts receivable Yes Chattels Transfer Act (Cap 70)

9. Buy/sell agreements Yes

10. Land and water rights Yes Mortgage Act of 2009

265


Responses are for the Collateral Registry at the Companies Registrar


Comments

89. What type of registry exists for registering movable collateral? Please specify the name of the movable collateral registry(ies)?

Multiple registries

The Collateral Registry in Uganda is the Companies Registry. In the case of motor vehicles and other road equipment, the registry is the Uganda Revenue Authority. Airplanes are registered with the Civil Aviation Authority.


Yes At the Collateral Registry maintained by the Companies Registrar – the Uganda Registration Services Bureau (URSB).


No Only security given by a company can be registered in the Registry of Companies. Registration of most charges is applicable to LLC’s, not sole proprietorships. Other registries can accept security rights for all types of debtors, including individuals and sole proprietors.


Yes The URSB maintains only a central registry in Kampala. URA and CAA registries have other branch offices throughout the country.


No At the URSB, individual files have to be checked. The URA and CAA registries are now fully-electronic.


No The form for registration of a charge can be found online. There is also an Online Name Search portal on the URSB website, but it is not operational. http://www.ursb.go.ug/images/resized/images/Forms/Form%20No%204.pdf


Yes


No In order to conduct a search of the registry, one must come to the URSB office in Kampala.


Yes Yes - Registration of charges or of particulars of a series of debentures: UGX 50,000 (US$20) registration fee plus 0.5% Stamp Duty. http://www.ursb.go.ug/index.php?option=com_content&view=article&id=115&Itemid=142

266


Yes Searching the registry takes 1-3 days. You can send a letter but still have to come in person to ensure the search is made. Search fee for Register of Charges is UGX 25,000 (US$10).


Yes Section 17, Uganda Chattels Transfer Act (Chapter 70)


Question Index

Score: 13 Comments


Yes Warehouse Receipts System Act (2006) and Regulations (2007).

a. If NO, are there any plans to draft a warehouse receipts law?

N/A


Agricultural goods


Yes The Act establishes a Uganda Warehouse Receipt Systems Authority whose functions include licensing warehouses and warehouse operators. Section 6 of the Regulations assigns designates the Uganda Commodity Exchange (UCE) as the Authority.

2.a. Is such entity private or public? Private 113. Does the legal and regulatory framework


- UCE is a company limited by guarantee.


Yes Operators must be licensed. The operator license can be found in Form 2, Schedule 2, WRS Regulations (2007).


Yes Warehouse operators must apply the typology and grading standards promulgated by the Uganda National Bureau of Standards. Section 35, WRS Regulations (2007)


Yes


Yes Fifth Schedule, WRS Regulations (2007) specifies rules for the warehouse operator to appropriately handle goods and maintain warehouse facilities.


Yes

118. Does the legal and regulatory framework provide for consequences/penalties for non-compliance of the handling of commodities in

Yes Section 51 of the WRS Regulations (2007) stipulates that offences under the Regulations can result in fines or imprisonment.

267

storage?


Yes The warehouse operator shall make complete settlement to all depositors having goods stored in his or her warehouse, damaged or destroyed (Section 31, WRS Act). All warehouse operators must be insured for the full market value of all goods stored in the warehouse against loss by fire, internal explosion, lightening, windstorm and any other disaster.


Yes Section 32, WRS Regulations (2007).


Yes The Act establishes a Central Registry, currently maintained by the Uganda Commodity Exchange.


Yes This is not explicitly stated, but is implied. In case of failure of the warehouse operator to deliver goods stored on behalf of a warehouse receipt holder, the Authority has the power to extend a lien over all goods and related assets of the operator until the operator can meet their obligations, and in case of insolvency, to act as a trustee of the operator.



Yes Per Third Schedule, WRS Act (2006) and Section 28, WRS Regulations (2007).

13.b. Designation and grade of warehouse Yes 13.c. License number of warehouse Yes



Yes

13.f. Description and quality of goods Yes Includes remarks, notes, quality analysis, and markings on the goods.

13.g. Whether goods are insured or not Yes 13.h. Net weight of goods Yes

13.i. Other: [ ] Yes • Identification number, if any, given to the goods • Number of packages • Declared origin • Location of storage • Date received • List of collateral management, warehousing, and other charges • Warehouse receipt serial number


No

268


GG. Time, cost, and documents to export a widely-‐traded agricultural commodity.

HH. Index on legal framework for phytosanitary certificates for export.

II. Time, cost, and documents to import hybrid seed.

JJ. Index on trade facilitation measures


Consignment is exported in a standard, non-‐refrigerated 40-‐foot container.

Value US$20,000 Point of Exit Mombasa port via Malaba

border Product Hybrid Maize Seed Import Consignment

Seed is transported in a standard 40-‐foot container, packed in 20kg sacks.

Value US$20,000 Point of Entry Mombasa port via Malaba

border Company Private LLC, majority

domestically-‐owned, with 40 employees

Carrier Logistics or freight forwarding company providing point-‐to-‐point service to many international destinations



Time (days)

Cost (USD)


10 $27


3 $440

TOTAL 16 days

$467

Documents to Export Commodity Export Permit

Certificate of Origin or GSP Certificate


Invoice

Packing List Customs Bill of Entry Bill of Lading

Road Customs Transport Document


TOTAL: 9 documents

269


Time (days)

Cost (USD)


11 $51


3 No data

TOTAL 14 days

$51



Seed/Plant Quality Certificate


TOTAL: 3 documents


Comments


No documents


No documents


Yes

e. If YES, is the risk management system electronic?

No


Yes The Ministry of Agriculture also considers the credibility / past performance of compliance by traders for phytosanitary inspections. If a trader defaults, the rate of inspections or sampling is increased.


No

50. Are consignments of imported seed allowed to enter Uganda (and remain in storage) while samples undergo laboratory analysis?

Yes Plant Quarantine Services inspects at the border, and sends a seed sample to Kampala, where the National Seed Certification Service (NSCS) laboratory does pest, germination, and moisture tests before release. Testing may take two days to one week, but the consignment is allowed to enter the country before test results are complete.

270



Comments

46. Is Uganda a signatory of the International Plant Protection Convention (IPPC)?

Yes https://www.ippc.int/countries/uganda


Yes Department of Crop Protection, Ministry of Agriculture. http://www.agriculture.go.ug/ index-page-departments-id-91.htm


By request

The Uganda Export Promotion Board and the Ministry of Agriculture provide information and advice directly to exporters on request. The Ministry of Agriculture is beginning to develop an online resource through a National SPS Inquiry Point that includes pest alerts and country notifications. However, few notifications are listed on the website and few respondents were aware of this resource. http://nep.agriculture.go/ug http://www.eapic.org/uganda/


By request

Information is provided on request, and the NEP website above is being updated to handle such requests. The Uganda Export Promotion Board website lists the fee for a phytosanitary certificate as UGX 2,000 and provides contact information for the Ministry of Agriculture. http://www.ugandaexportsonline .com/documents.htm


Yes


No


p. The exporter’s warehouse or storage facility?

Yes At farm/production sites and at exporter’s stores or premises, on request.

q. Bonded warehouses? Yes r. All points of exit from Uganda

(including land, air, and sea ports)? Yes


Yes The standard operating procedure for exit point inspection provides for issuance of a rejection notice when commodities do not pass the inspection or meet requirements.


No No such agreements yet, though there is collaboration on a regional level through the East Africa Phytosanitary Information Committee (EAPIC).

271

Enabling Contract Farming Contract farming can integrate smallholder farmers into the value chain, guarantee markets and prices for farmers, and improve farmer access to mechanization and inputs. However, the contract farming system poses risks to both farmers and buyers. The Enabling Contract Farming topic measures key legal components that facilitate contract farming and mitigate the risks. For example, effective public grades and standards enable arms-‐length transactions and standardize trade, while dispute resolution mechanisms allow agribusinesses to resolve conflicts in a timely and affordable manner. Indicators:

Y. Index on legal framework for contract farming. Z. Index on system for establishing public grades

and standards for a widely-‐traded staple crop. AA. Index on access to expedited or alternative




Comments


Yes This is already freely being done in agriculture. Legally, parties must reach a consensus ad idem to form an enforceable contract.


Yes No legal impediments.


Yes However cooperatives may determine the prices for their members in some instances for example in Bugisu.


Yes It is a common law doctrine. However, it is not codified in the Contracts Act 2010.


Yes Yes it does. It also provides for specific, general, punitive, nominal, exemplary, and pecuniary damages under the Civil Procedure Act. In practice, however, most contracted growers are still small-scale and rural based. Literacy levels and resources at their disposal make it difficult to recover damages equitably.

272


Yes Both under common law and the Contracts Act. This can also be stated specifically in the contract.


Yes

Grades and Standards Index (0-9) This index is scored for coffee.


Comments


Yes Uganda Coffee Development Authority (UCDA) mandated by 1991 Ace of Parliament, and Coffee Regulations 1994 (amended version) Grades; Part V 20 (6&7). Amended grades/ grading system were approved by the UCDA board as per the mandate (2009-10).


Yes Mandatory grades based on size, moisture, color, defects, cup taste, weight, shape. Uganda Robusta coffee Grades- Naturals; - Crane, Impala, Screen 1800, Screen 1800, Screen 1500, Screen 1400, Screen 1300, Screen 1200 . BHP 1299, BHP 1599, BHP 1899 ,BHP 1199, BHP 1013 & Black beans Washed Robusta : Screen 1800 , Screen 1800, Screen 1500, Screen 1400, Screen 1300, Screen 1200 . BHP 1299, BHP 1599, BHP 1899 & Black beans Uganda Arabica Coffee Grades Naturals: Drugar A, B, C & Triage Kyakishenyi & Rwenzori graded as AA,A,AB,B,C & Triage Uganda Washed Arabica Coffee Bugisu , Elgon, Rwenzori, Kisoro, Nyakishenyi west nile coffee their drade are AAA, AA,A+, A, AB, B, C , Triage, and WUGAR for semi-washed.


Yes The methods of analysis for the parameters for coffee are universal across the world in line with international coffee standards, e.g ISO 4150:2011,iso 6667:1985, ISO 6668:2008 ,ISO 10470:2004,ISO 24115:2012, EAS 130:1999,EAS106:2000, EAS 105:1999.

273


Yes All coffee exports are inspected. See coffee regulation 1994 Part V 19 (1a-1c) 20(1,2,3,4,6&7) & Part VI (21 (1&3) & 22 (1&4).


Yes Crop Protection Department under the Ministry of Agriculture, Animal Industry & Fisheries (MAAIF).


Yes US 933:2053


Yes Uganda National Bureau of Standards (UNBS)


Yes


Yes Conducted by the Quality Infrastructure and Standards Program (QUISP), UNBS & reports submitted to the National CODEX committee.


Yes Public hearing, public comment period, and Other (stake holders meetings)


Yes Both public and private labs

a. Are there ISO accredited laboratories in Uganda?

Yes

12. Are there uniform units of measurement across all food and agriculture-related commerce

Yes


Yes Processing of the commodity is 100% by private sector following / using the set standards.

274



Comments


Yes Yes. In the Commercial Court there is a mandatory mediation stage held prior to the hearing of a case; and the small claims are governed by the Judicature (Small Claims Procedure) Rules, 2011.


Yes Arbitration and mediation. Arbitration & Conciliation Act Cap 9, and the Commercial Court Mediation Rules 2007 which is mandatory in cases before the Commercial Court.


Yes According to the Arbitration and Conciliation Act.


Yes The costs are agreed between the parties and the mediator.


Yes


No


N/A


Yes The court system is bogged down with backlog of cases.

147. Are expedited or alternative mechanisms readily available outside of Kampala?

Yes


Yes Yes. According to the Arbitration and Conciliation Act, the awards are registered in the High Court and can be enforced just like a court award.

275


S. Time, cost, and procedures for business registration and licensing of a mid-sized staple grain farm. Requirements may include national or local trading licenses, chemical storage requirements, workplace or employee registration, environmental permits, and company registration.

T. Index on access to business registration information.

Case Study Farm Crop Maize Farm size 50 hectares Location Southern Region Legal Form Sole Proprietorship Land tenure 50 year lease Market Farm gate, local market

Zambia

Procedures, Time, and Cost to Start-up a 50-hectare Maize Farm60


Cost (US$)61 Agency

1

Name Search

Five locations to register around the country. Sole Zambia Development Agency (ZDA) One

Stop Shop in Lusaka.

1 2

Patent and Companies

Registration Agency (PACRA)

2

Name Registration

A sole proprietorship just registers its name, not as a company. Proposes three names.

5 14

Patent and Companies

Registration Agency (PACRA)

3 Register for Tax ID Number

2 0 Zambia Revenue Authority (ZRA)

4

Register for Employee Pension Scheme

Conflicting info on whether minimum of 15 employees to register with pension scheme, or whether all employers must

register regardless of number of employees.

2 0 National Pension Scheme Authority

(NAPSA)

60 Data highlighted in yellow is based on incomplete/unconfirmed data 61 Exchange rates as of April 9, 2012 (ZMK 5,254.32 per USD). Costs are rounded to the nearest dollar.

276

5

National Health & Safety Inspection

Annual renewal, ZEMA sends inspectors. In practice, enforcement may not happen and there are no repercussions for

missing an inspection. Farm pays for inspection

1 0

Zambia Environmental

Management Agency (ZEMA)

6 Local Health & Safety Inspection 1 0 Local Council

7

Obtain Local Trading License

Application form is K 5,500; retail trading license is K 599,980, plus personal levy of K 15,000 per worker (at 10 workers) for K

150,000.

4 144 Lusaka City Council

8

Apply for Storage of Agricultural Chemicals Permit

ZEMA requires storage license for sellers of fertilizers and agro-chemicals and in theory applies to farms as well, though in

practice this requirement does not appear to be consistently enforced for farms. ZEMA may send an inspector to the farm but

enforcement is spotty year to year.

14 0 ZEMA

9

Inspection for Agricultural Chemicals Storage Permit

For most applications, after you apply, will be told when inspectors will be sent, then told when your permit is ready.

1 0 ZEMA

10

Register for Rezoning as Agricultural Land

Must wait for local council to meet (roughly once a quarter) to review land usage and other factors.

60 0

Local Council, under

review of Provincial Planning Authority

N/A

Optional: Farm Capability Survey

Take soil samples to Mount Makulu and carry out field soil surveys. This procedure is optional and it is unlikely a farm of

this size would get surveyed.

3 81


and Livestock - Land Husbandry

N/A

Optional: Farm Mapping

Comprehensive Farm Layout Mapping. Demarcate the farm according to the capability of the soils, put up beacons. This

process is optional and it is unlikely a farm of this size would get mapped.

3 80


277




The information on registration

procedures and fees are in promotional materials which are

distributed to members of the

public.


All institutions operating under the One Stop Shop have websites where this

information is available.

53. Is registration possible in every state/province? No

Currently registration for

business names and companies is done directly in Lusaka, Livingstone, Ndola

and Chipata. Registration is done through agents in

Solwezi and Kasama. Efforts are

underway to make these services available more

widely countrywide through

establishment of additional One Stop

Shop facilities. 54. Are registration steps the same regardless of business size (measured by

size of workforce or revenue)? Yes


278


S. Time, cost, and procedures to obtain operational licenses for a seed supplier. Requirements may include import license, seed dealer license, license for storage facilities, national or local trading licenses, and inspections.

T. Time, cost, and procedures to register a new proprietary seed variety.



Type of Seed Hybrid Maize Location Lusaka Ownership Domestic, non-state-owned

enterprise



1 Importation License

Plant Varieties & Seeds Act (1964).

1 0

Seed Control and

Certification Institute (SCCI)

2

Retail Seed Seller License

Every retail shop is licensed to prove they have adequate storage facilities and can look after seed in a reasonable manner.

1 0 SCCI

3

Wholesale Seed Seller License

Paper application takes 20 minutes to complete but can only be done in Lusaka.

1 14 SCCI

4

Inspections for Registration as a Seed Seller

Inspection of physical premises and adequacy of storage facilities. Supposedly inspectors in every province, though appear limited in

numbers.

1 0 SCCI

5

Local Trading License

Application form is K5,500. Retail trading license is K599,980 and K1,499,980 for wholesaling, plus personal levy of K15,000 per

worker (at 10 workers) for K150,000.

4 145 Local Council

6 Distribution License 1 0 SCCI Tota

l 6 procedures 9 days US$159

279



Agency

1

Lodge Application

Seed companies do multiple years of internal development and testing before starting the application process.

1 25

Seed Control & Certification

Institute (SCCI)

2

Perform Field Tests

US$125 per site per year for 6 SCCI sites, over two years. US$125 to keep registration active each year. Test for DUS (distinctiveness, uniformity and stability) and VCU (value for cultivation and use on the market). Includes review by Seed

Committee and release meeting with all relevant parties.

730 1,750 SCCI


Question Response Comments

28. Does the authority in charge of seed variety registration accept testing data from the breeder? N/A

Data for this index was

not collected for this country

29. Do current regulations allow for a faster or facilitated registration process for seed varieties that have already been registered or field-tested in another

country?


30. Is Zambia party to a regional agreement with respect to common procedures for variety testing, registration, and/or release that is effectively

implemented in practice?


280


S. Time, cost, and procedures to obtain operational licenses for a fertilizer supplier. Requirements may include import license, fertilizer dealer license, licenses for storage facilities, environmental permit, national or local trading licenses, and inspections.

T. Index on the legal and institutional framework for the fertilizer sector.




Location Lusaka Ownership Domestic, non-state-owned

enterprise



1

Importation License

Annual renewal. Zambia imports all fertilizer, no domestic manufacturing.

14 1,560,000 (297)

Zambia Environmental

Management Agency (ZEMA)

2 Storage of Chemicals License

For sale of fertilizer & agro-chemicals.

14 900,000 (170)

ZEMA

3

Inspection for Storage of Chemicals License

Inspection of physical premises and adequacy of storage facilities. Supposedly inspectors in every province, though appear

limited in numbers.

1 0 ZEMA

4

Local Trading License

Application form is K5,500. Retail trading license is K599,980 and K1,499,980 for wholesaling, plus personal levy of K15,000

per worker (at 10 workers) for K150,000.

4 755,480 (145)

Local Council


281



Comments

1. Is there a fertilizer law(s) and regulations? Yes Fertilizer And Feed Act (Cap 226, 2006) and Fertilizer Regulations. See also Zambia Bureau of Standards Regulations, currently being reviewed.


bb. Set truth-in-labeling guidelines? (e.g. fertilizer bag labels must includes the Netherland’s official language(s), net weight or volume, “guaranteed analysis” of minimum levels of nutrients claimed, directions for use, and health and safety precautions)

Yes All of the listed specifications must be on the label, except health and safety precautions.

cc. Prohibit the sale of open, mislabeled, or adulterated bags of fertilizer?

Yes

The main challenge is the enforcement of this law.

dd. Establish rules for the accreditation of third-party certification of fertilizer quality? (e.g. an accredited private laboratory network)

Yes Companies can use private inspection companies like SGS. The Minister of Agriculture is responsible for approving analysts, laboratories, and authorizing a public officer to act as an inspector.


Yes Ministry of Agriculture and Livestock and the Zambia Bureau of Standards. The Fertilizer and Feed Act (Cap 226, 2006) provides for the administration, enforcement, and assessment of penalties by the court.


a. Fertilizer production and storage facilities? Yes This Act provides for the regulation and control of the manufacture, processing, importation and sale of agricultural fertilizers and farm feed. This includes storage and carriage. There are required annual inspections for Health & Safety, factories, weighbridge, and fire certificates.


Yes Same as above.


Yes Yes, but not done in practice.


Yes Yes for samples sent to private laboratories. Government labs follow international procedures if they have the reagents etc.


No


Yes The Government Fertiliser Support Program (FSP) issues tenders to two companies annually.

282


BB. Time, cost, and procedures to transfer farmland. Requirements may include cadastral survey, title and encumbrances search, valuation and inspection, government consent to transfer, stamp duty and transfer tax, and registration of deed of sale.

CC. Index on access to property registration information.

DD. Index on legal framework for leasing farmland, including customary land.


LLCs Farm size 50 hectares Purchase Price ZMK Location Southern Region Land Tenure Titled land



1

Investigate Title/Obtain Non-Encumbrance Certificate

The buyer pays K25,000 at the cashier desk and then

proceeds to get a printout from the Land Register which is an official document certifying the status of the property vis a vis ownership and encumbrances. Issues that arise include access (only two functional registries in country - Lusaka or Ndola), not all encumbrances are in the electronic system

(i.e. agricultural charges) so one needs to examine the physical files, and not all data in the Land Register is reliable.

2 100

Lands and Deeds Department,

Ministry of Lands, Natural Resources

and Environmental

Protection

2

Seller Obtains State Consent Certificate

The seller (agent) applies for state consent from the landlord (Commissioner of Lands, who acts on behalf of the President

of the Republic of Zambia) to transfer interests in the subject property to the intended buyer. The identity of the proposed buyer is revealed as ascertained in line with the

provisions of the Lands Act CAP 184, SEC 5 of the Laws of Zambia as to whether he/she qualifies to hold land in the

country. The proposed consideration (purchase price) is also stated in the application as well as the level of development

on the subject property.

3 19

Legal Unit, Lands Department,

Ministry of Lands, Natural Resources

and Environmental

Protection

283



2 Comments

1. Is real property registration possible in every state/province? No

Real property registration under the Lands and Deeds Registry is only done in Lusaka and Ndola.


All the institutions involved in property registration have not implemented fully automated

systems that can support online registration. 3. Is information and documentation about the process of real property registration available on the Internet? No Some information is online, but documentation

does not appear to be.

4. Are real property registration steps and timeframes clear? No Institutions have not defined timeframes. Some do

follow informal service charters.



7. Is quality of data in the land registry reliable, with few cases of dual or fake titles? N/A

Data for this question was not collected for this country.



148. Do formal domestically-owned entities (i.e. corporations, partnerships, cooperatives, sole

proprietorships) have a legal right to lease land?

Yes However, currently the sale/allotment of customary land has been suspended.


Provided the entity is domestically-owned, holds an investment license authorized by the President, or is

a bank.

3

Pay Transfer Tax and Get Tax Certificate

Expedited in Lusaka because ZRA agent in Ministry of Lands office.

5 3,269 (5% of

consideration)

Zambia Revenue Authority (ZRA)

4

Submit all Documents to Registrar to Obtain New Title

Submit Deeds of Assignment signed by Seller, ZRA

certificate, copy of consent, and original title to Chief Registrar, who makes changes in system and physical files

and types new title in new owner's name. Issue is that timing is unpredictable. Can take from 1 week to 2 months, due to

lack of capacity in Registrar's office.

31 381 (1% of

consideration up to max)

Registrar’s Office at Ministry of Lands


284

150. Is approval required from a governor or similarly high-level ministerial official to enter

into a lease for land? Yes

Approvals include Headman, Chief, Local Authority/Council, and finally Commissioner of

Lands. State consent is legally required but in practice not always applied.

151. What is the statutory maximum duration, if any, for a lease of land? 99 years

In exceptional cases, 14 years for un-surveyed land. Additionally, the lease cannot exceed the terms of

the parent lease.


250 hectares

250 hectares with approval granted by Commissioner of Lands, but up to 1000 ha if approved by the

Minister and more if the President. 153. Are there often statutory restrictions on

the right to produce on the land based on the leaseholder’s own preferences that impede the leaseholder’s ability to undertake agricultural

production?

No Zambia Environmental Management Agency may be involved.

154. Are there often statutory restrictions on the leaseholder’s ability to subdivide, sublease

or rent the land? No Zambia Environmental Management Agency may be

involved.

155. Can a long-term (50+ years) leasehold interest in land be transferred to another

formal entity? Yes

a. Without lessor approval? No Any transfer has to be approved by the lessor.


Yes

157. Does the legal framework allow long-term leaseholders (50+ years) to obtain mortgages

on land? Yes

h. Do such mortgages occur in practice? Yes Very rarely.

285


BB. Types of agricultural collateral allowed by the legal and regulatory framework and accepted by financial institutions in practice.

CC. Quality of existing collateral registries for movable collateral.

DD.Strength of legal framework for warehouse receipts systems.

Strength of Legal Right Index (0-10)


Comments

1. Farm equipment Yes Has to be registered. Considered weak collateral.

2. Crop in field Yes Covered under agricultural charge. 3. Crop in warehouse No Warehouse receipts are not illegal, but provisions

in the law to create the framework for warehouse receipts have not yet been put in place and banks

say it isn't possible yet. There's also a lack of warehousing facilities.

4. Livestock Yes Possible in theory but not done in practice 5. Inventory Yes Possible in theory but not done in practice


Yes Possible in theory but not done in practice.

7. Futures contract Yes Possible in theory but not done in practice, it can't be registered.


Yes


Yes


Yes Yes, so long as the land is titled. Customary land and water rights cannot be used to securitize a

loan.

286

Movables Collateral Registry Index (0-11) Responses are for the PACRA and the Agricultural Registry


100. What type of registry exists for registering movable collateral? Please specify the name of

the movable collateral registry(ies).

Multiple registries

• Patents and Company Registration Agency (PACRA) dealing with the registration of patents and

debentures • Agricultural Registry for agricultural charges

• Road Transport and Safety Agency (RATSA) dealing with motor vehicles, which reportedly includes cars,

trailers, and tractors. The actual charge on the vehicle is not registered, but the interest will be noted in the Register and on the vehicle registration document by

listing both the registered owner of the vehicle as well as the “absolute” owner (i.e. lender).

Efforts are under way to have a centralized/unified collateral registry in Zambia. As things stand, banks currently register debentures mostly with PACRA.

Responses are for PACRA and the Agricultural Registry.

101. Can security rights for a broad range of tangible and intangible movables (i.e. equipment, crops, livestock, accounts receivable, inventory, futures, etc.) be

registered in the movable collateral registry?

Yes It is possible at both PACRA and the Agricultural Registry. The security interest would have to be

registered at both registries.

102. Can security rights for all types of debtors, including sole proprietors, be registered in the

movable collateral registry? Yes

For sole proprietors, registration of agricultural collateral will only have to be done at the Agricultural

Registry. 103. Does the movable collateral registry have a

centralized database that consolidates information on all types of security interests

(charges, chattel mortgages, etc.) and all types of debtors from registry branches across all

geographic regions of the country?

No

PACRA has six regional offices as well as an office in Lusaka. A charge may be registered at any of the regional offices. However there is no centralized

database. Efforts to do so are being spearheaded by the Bank of Zambia and will soon be put in place. The

Agricultural Registry is consolidated. 104. Does the movable collateral registry operate a

fully electronic database system (as opposed to paper-based)?

No Mixture of both electronic and paper.


One must go to PACRA or the Agricultural Registry to carry out searches.

106. Is data from the movable collateral registry reliable? Yes

107. Is real-time information from the movable collateral registry widely accessible to the

general public without any restrictions, including by those located in commercial

centers outside of the capital?

No

108. Can registration in the movable collateral registry be performed within a reasonably

rapid time frame and with flat, reasonable fees? Yes

Reasonable time and fees to register a charge at both PACRA and the Agricultural Registry. Fees are

regulated. 109. Can a search of the movable collateral registry Yes Reasonable time and fees to conduct a search at both

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be performed within a reasonably rapid time frame and with flat, reasonable fees (i.e. free or

less than US$5)?

PACRA and the Agricultural Registry. Timing is subject to the availability of the requested file.

110. Does the secured lending system provide for priority based on order of filing? Yes Order of filing is strictly followed by law.


Question Index

Score: 12 Comments


Yes Agricultural Credits Act, 2010.

a. If NO, are there any plans to draft a warehouse receipts law?

N/A


Agricultural goods

Specifically commodities.


Yes The Agricultural Credits Act (2010) establishes a Warehouse Licensing Authority (WLA), though implementation has been delayed.

2.a. Is such entity private or public? Public The minister has authority to appoint an agency to perform the functions of the WLA, including a private sector organization.

127. Does the legal and regulatory framework provide clearly established criteria for registering a warehouse, such as specifications for the physical facility and equipment (ex. silos, cleaners, fumigators)?

Yes


Yes


Yes


No The WLA is not yet in force.


Yes


Yes Inspectors appointed by the Board may, with a warrant, at any time enter and search any warehouse or other premises, including a private dwelling where information or documents relevant to an investigation may be kept.


Yes

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Yes The warehouse operator is required to make complete settlement to all depositors whose agricultural commodities are stored in the warehouse and are damaged or destroyed by fire, explosion, lightning, or other risk.


Yes The Act provides that a warehouse receipt, whether negotiable or non-negotiable, is a document of title.


No The Act requires that warehouses be registered but makes no provision relating to the registration of warehouse receipts. Zambia is currently planning to establish a Unified Collateral Registry which may encompass warehouse receipts.


No



Yes

13.b. Designation and grade of warehouse Yes 13.c. License number of warehouse Yes



No

13.f. Description and quality of goods Yes 13.g. Whether goods are insured or not No

13.h. Net weight of goods Yes

13.i. Other: [ ] Yes • The nature and fact of ownership, whether solely, jointly, or commonly owned with others • Whether or not the agricultural commodities are subject to any agricultural charge • A statement as to the amount of advances made and of the liability incurred • Peculiarities in the nature of the agricultural goods or any agricultural charge on the commodities


Yes The Act provides that the Arbitration Act No. 19 (2000) shall apply to the settlement of disputes arising as a result of the interpretation or application of the provisions of the Act.

289


KK. Time, cost, and documents to export a widely-traded agricultural commodity.

LL. Index on legal framework for phytosanitary certificates for export.

MM.Time, cost, and documents to import hybrid seed.

NN.Index on trade facilitation measures



Value US$20,000 Point of Exit Durban port via

Chirundu border Product Hybrid Maize Seed Import Consignment


Value US$20,000 Point of Entry Durban port via

Chirundu border Company Private LLC, majority





Time (days)

Cost (USD)


9 $17


3 $120

TOTAL 12 days

$137

Documents to Export Commodity Export Permit


Fumigation Certificate

Bill of Lading

Commercial Invoice


Customs Export Declaration Transit Entry Documents (South Africa and Zimbabwe) TOTAL: 8 documents

290



Time (days)

Cost (USD)


8 $10


3 $470

TOTAL 11 days

$480


Documents to Import Hybrid Seed

TOTAL: 6 documents


Comments


Some documents

E.g. Invoice, road manifest, export/import permit, COMESA phytosanitary certificate.


Some documents

Invoice, manifest, export/import permit, bill of entry and packing list if any.


Yes

f. If YES, is the risk management system electronic?

No


Yes


No

56. Are consignments of imported seed allowed to enter Zambia (and remain in storage) while samples undergo laboratory analysis?

Yes

291



Comments

55. Is Zambia a signatory of the International Plant Protection Convention (IPPC)?

Yes Zambia is a signatory of IPPC as of June 24, 1986. https://www.ippc.int/ countries/zambia


Yes As stipulated under the Zambia Plant Pests and Diseases Act (Cap 233).


No


No Phytosanitary certificates can be obtained from the Mount Makulu research station (ZARI).


Yes


No


s. The exporter’s warehouse or storage facility?

Yes On-farm inspections.

t. Bonded warehouses? Yes u. All points of exit from Zambia

(including land, air, and sea ports)? Yes Including Lusaka airport.


Yes


No However, Zambia is party to the Inter-Africa Phytosanitary Council (IAPSC).

292


BB. Index on legal framework for contract farming. CC. Index on system for establishing public grades

and standards for a widely-traded staple crop. DD.Index on access to expedited or alternative




64. Does the legal framework provide the freedom of contract to all parties that may seek to

engage in contract farming, including cooperatives, farmers associations,

agribusinesses, and women?

Yes

However, most contract farming agreements are standard contracts formulated by big buyers, so farmers may have little say in the formulation of

contracts.

65. Are there legal impediments to entering into tripartite contractual arrangements, for

example between banks, farmers, and buyers? No

Contracts are typically between banks and the buyers, not a tri-partite agreement between bank,

buyer, and farmer. 66. Are the parties to a contract freely allowed to

establish prices for payment? Yes However, farmers often have little bargaining power.

67. Does the legal framework recognize force majeure (i.e. unpredictable events such as

natural disasters or pest outbreaks that are beyond the parties’ control) and its use as a

reason for non-performance?

Yes This is not in any written law and is based on common law principles of contract.

68. Does the legal framework recognize the right of recovery of damages in the case of breach of

contract and equitable remedies such as specific performance and injunctions?

Yes

69. Are duress/coercion, misrepresentation, or fraud recognized as legal defenses that can be

used to void contracts? Yes

70. Does the legal framework allow for expedited sale of seized goods or expedited legal

proceedings for enforcement of contracts Yes This is allowed and Zambia relies on the English Sale

of Goods Act of 1893.

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where perishable goods are involved?

Grades and Standards Index (0-12) This index is scored for maize.


11 Comments

94. Does the legal framework provide a clear institutional mandate and authority for the

development and management of public grades and standards?

Yes Food Reserve Agency of Zambia (FRA).

95. Are grades and standards used to classify or describe the commodity listed above? (e.g.

based on quantifiable attributes such as shape, size, weight, color, taste, texture, odor,

uniformity, moisture content)

Yes Under regulation 5 of the Grain Marketing

Regulations of the Food Reserve Agency Act, Chapter 225 of the Laws of Zambia.

96. Are grades and standards for quality attributes consistent with guidelines issued by

international standards-setting bodies (e.g. Codex Alimentarius, ISO UNECE), where

appropriate?

Yes

97. Does a regulatory agency conduct regular inspections to ensure the commodity listed

above is consistently and correctly graded/classified?

Yes

98. Does the legal framework provide a clear institutional mandate and authority for the

development and management of grades and standards pertaining to contamination and

chemical residues? (e.g. Standards Authority, Min. of Agriculture)

Yes This is regulated by the Zambia Environmental

Management Agency (ZEMA) and the Ministry of Health.

99. Are there mandatory standards for microbial contamination and chemical residue for the

commodity listed above? Yes

Microbial contamination and chemical residue is regulated under the Environmental Management Act,

Number 12 of 2011. 100. Are standards for contamination and

chemical residues consistent with guidelines issued by international standards-setting bodies

(e.g. Codex Alimentarius, ISO), where appropriate?

Yes Zambia adheres to the International Plant Protection Convention of the United Nations (IPPC) and also

follows Codex Alimentarius guidelines.

101. Does a regulatory agency conduct regular inspections to ensure that the commodity

listed above conforms to standards on microbial contamination and chemical

residues?

Yes Inspection is conducted by Food and Drugs Laboratory under the Ministry of Health

102. Do regulatory agency(s) convene technical committees with relevant private and public

sector stakeholders to facilitate and coordinate Yes Coordination of standard setting is conducted by the

Zambia Bureau of Standards.

294

standards-setting?

103. Does the process to develop new public grades or standards for agricultural

commodities include the following types of public outreach and input?

Public outreach

104. Are there laboratories with the equipment to accurately measure and test attributes of

agricultural commodities? (e.g. electronic scales, moisture meters)


private labs

a. Are there ISO accredited laboratories in Zambia? Yes

These laboratories are available at the Zambia Bureau of Standards and Seed Control Certification Institute

created under the Plant Varieties and Seeds Act. 12. Are there uniform units of measurement across

all food and agriculture-related commerce Yes

13. Do traders have access to standard tools for weighing, measuring, and sorting agricultural

products? No



158. Do expedited or more accessible mechanisms exist within the formal court system to resolve contract disputes (i.e.

commercial courts, small claims courts, village courts)?

Yes

Order 53 of the High Court Rules under the High Court Act establishes the Commercial Court of

Zambia which is a fast track Court that handles all commercial matters. Answers based on commercial

court. 159. Do alternative mechanisms to the formal

court system exist to resolve contract disputes (i.e. mediation, arbitration)?

Yes Both arbitration and mediation do exist.

160. Do expedited or alternative mechanisms adequately apply standard contract law

principles or arbitration/mediation principles (as applicable) when resolving disputes?

Yes

161. Are the costs entailed in using such expedited or alternative mechanisms

reasonable and not prohibitive (ex. total costs do not exceed the amount in dispute)?

Yes

4.a. Are the costs entailed typically less than that of the traditional court system? Yes

For commercial court. Arbitration fees are quite high, and alternate dispute resolution is more expensive than court. While arbitration can be costly, there is

also the option of mediation that is not costly. Mediation costs is currently K250.00 per party. Once

a mediation agreement is reached it is binding on both parties and can be enforced.

162. Is there a minimum threshold to the monetary amount being disputed that must be

met in order to use expedited forums? No

295

a. If YES, does this threshold amount pose a barrier to claims brought by small or medium-

sized agribusinesses? N/A

163. Are expedited or alternative mechanisms typically faster than the traditional court system, with streamlined and simplified

procedures?

Yes

164. Are expedited or alternative mechanisms readily available outside of Lusaka? Yes

8. Are rulings through expedited or alternative mechanisms upheld in and enforced by the

traditional court system? Yes