Laws of Zambia Active 2010Agricultural Credits 2010
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Agricultural Credits [No. 35 of 2010 471
THE AGRICULTURAL CREDITS ACT, 2010
ARRANGEMENT OF SECTIONS
PART I
PRELIMINARY
Sections
1. Short title and commencement
2. Interpretation
PART II
THE WAREHOUSE LICENSING AUTHORITY
3. Establishment of Authority
4. Seal of Authority
5. Functions of Authority
6. Authorised agencies
7. Board of Authority
8. Functions of Board
9. Director and other staff
10. Inspectors
PART III
AGRICULTURAL CHARGES
11. Agricultural charges on farming stock and assets
12. Effect of fixed charge
13. Effect of floating charge
14. Notice of agricultural charge
15. Supplementary provisions as to agricultural charges
16. Registration of agricultural charges
17. Restriction on publication of agricultural charges
18. Fraud
PART IV
CONTRACTS FOR ADVANCES ON INPUTS AND OTHER ITEMS
19. Validity of contracts
20. Failure to make full disclosure of inputs, items, etc
Single copies of this Act may be obtained from the Government Printer
P.O. Box 30136, 10101 Lusaka. Price K25,000
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472 No. 35 of 2010] Agricultural Credits
PART V
REGISTRATION OF WAREHOUSE
the transcription:
472 No. 35 of 2010] Agricultural Credits
PART V
REGISTRATION OF WAREHOUSE
21. Application for registration of warehouse
22. Bond
23. Designation as certified and bonded warehouse
24. Insurance
25. Issue of certificate
26. Validity of certificate
27. Display of certificate
28. Variation of certificate
29. Surrender of certificate
30. Transfer of certificate
31. Renewal of certificate
32. Suspension or cancellation of certificate
33. Re-registration
34. Appeals
35. Register
36. Closure of warehouse
PART VI
WAREHOUSE RECEIPTS
37. Issuance of warehouse receipt
38. Rights conferred by warehouse receipt
39. Disclosure by depositor
40. Deposit of agricultural commodities
41. Agricultural commodities deposited for purposes other than storage
42. Form of warehouse receipt
43. Negotiable warehouse receipt
44. Non-negotiable warehouse receipt
45. Altered warehouse receipts
46. Rights of purchaser of altered receipt against warehouse operator
47. Lost or missing warehouse receipt book
48. Duplicate warehouse receipt
PART VII
RIGHTS AND OBLIGATIONS OF WAREHOUSE OPERATORS
ipt book
48. Duplicate warehouse receipt
PART VII
RIGHTS AND OBLIGATIONS OF WAREHOUSE OPERATORS
49. Right of warehouse operator to sell or pledge warehouse receipt
50. Obligations not affected by irregularities in warehouse receipt
51. Obligation of warehouse operator to deliver agricultural commodities
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Agricultural Credits [No. 35 of 2010 473
ities in warehouse receipt
51. Obligation of warehouse operator to deliver agricultural commodities
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52. Obligation to deliver in accordance with demand of depositor
53. Justification for delivery of agricultural commodities
54. Liability for mis-delivery
55. Exception to obligation to deliver
56. Liability for failure to cancel warehouse receipt after full delivery
57. Liability for failure to cancel or mark warehouse receipt after partial delivery
58. Liability after loss, theft or destruction of warehouse receipt
59. Delivery to persons with valid titles or right
60. Ascertaining valid titles to agricultural commodities
61. Liability for mis-described agricultural commodities
62. Warehouse operator’s duty of care
63. Duty to keep agricultural commodities separately
64. Commingling of fungibles
65. Warehouse operator’s right to lien
66. Enforcement of lien
67. Loss of lien
68. Statement of charges under lien
69. Refusal to deliver agricultural commodities
70. Warehouse operator’s lien does not preclude other remedies
71. Methods of enforcing lien
72. Perishable and hazardous agricultural commodities
73. Termination of storage at warehouse operator’s option
PART VIII
NEGOTIATION AND TRANSFER OF WAREHOUSE RECEIPTS
ous agricultural commodities
73. Termination of storage at warehouse operator’s option
PART VIII
NEGOTIATION AND TRANSFER OF WAREHOUSE RECEIPTS
74. Negotiating warehouse receipt
75. Negotiating by endorsement
76. Effect of endorsement to non-negotiable receipt
77. Persons capable of negotiating warehouse receipt
78. Rights acquired after negotiation of warehouse receipt
79. Rights acquired in absence of negotiation
80. Rights of transfer of warehouse receipt
81. Rights and obligations of transferor and transferees of negotiable
warehouse receipts
82. Warranties on negotiation of warehouse receipt
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474 No. 35 of2010] Agricultural Credits
PART IX
OFFENCES AND PENALTIES
83. Issue of receipt for agricultural commodities not received
84. Issue of warehouse receipt containing false statement
85. Issue of unmarked duplicate receipt
86. Issue of receipt for warehouse operator=s commodities
87. Delivery of goods without obtaining negotiable warehouse receipt
88. Negotiation of receipt for mortgaged agricultural commodities
89. General penalty
livery of goods without obtaining negotiable warehouse receipt
88. Negotiation of receipt for mortgaged agricultural commodities
89. General penalty
PART X
GENERAL PROVISIONS
90. Arbitration
91. Offences by body corporate or unincorporate body
92. Regulations
93. Repeal of Act No. 23 of 1995
94. Savings
SCHEDULE
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Agricultural Credits [No. 35 of 2010 475
GOVERNMENT OF ZAMBIA
ACT
No. 35 of 2010
Date of Assent: 14th November, 2010
An Act to establish the Warehouse Licensing Authority and
provide for its functions and powers; facilitate the
borrowing of money on the security of charges created on
farming stock and other agricultural assets; provide for
the registration of charges; provide for the certification
of warehouses; provide for the issuance and negotiation
of warehouse receipts and the rights conferred by
warehouse receipts; provide for the rights and obligations
of warehouse operators; repeal and replace the
Agricultural Credits Act, 1995; and provide for matters
connected with, or incidental to, the foregoing.
[19th November, 2010
ENACTED by the Parliament of Zambia.
PART I
or incidental to, the foregoing.
[19th November, 2010
ENACTED by the Parliament of Zambia.
PART I
PRELIMINARY
1. This Act may be cited as the Agricultural Credits Act, 2010,
and shall come into operation on such date as the Minister may, by
statutory instrument, appoint.
2. (1) In this Act, unless the context otherwise requires—
“additional assets” means any tangible assets, excluding land
and warehouse receipts, whether negotiable or non-
negotiable, that belong to a farmer, trader or related business,
relating directly or indirectly to agricultural production,
processing or trade, all accounts receivable, chattel paper
and promissory notes, and includes savings accounts on
deposit with any bank, credit union, savings institution or
other similar organisation;
“agricultural charge” means a charge, lien or assignment
created under section eleven;
“agricultural commodity” means anything derived directly
or indirectly from cultivation;
“approved agency” means any credit reference agency
approved by the Board to supply information on the credit
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approved by the Board to supply information on the credit
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PRELIMINARY
1. This Act may be cited as the Agricultural Credits Act, 2010,
and shall come into operation on such date as the Minister may, by
statutory instrument, appoint.
2. (1) In this Act, unless the context otherwise requires—
“additional assets” means any tangible assets, excluding land
and warehouse receipts, whether negotiable or non-
negotiable, that belong to a farmer, trader or related business,
relating directly or indirectly to agricultural production,
processing or trade, all accounts receivable, chattel paper
and promissory notes, and includes savings accounts on
deposit with any bank, credit union, savings institution or
other similar organisation;
“agricultural charge” means a charge, lien or assignment
created under section eleven;
“agricultural commodity” means anything derived directly
or indirectly from cultivation;
“approved agency” means any credit reference agency
approved by the Board to supply information on the credit
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approved by the Board to supply information on the credit
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risk profile of any person for the purposes of this Act, and
includes the authorised agency or any other agency
approved under any written law to provide such
information;
" authorised agency " means any person or institution
designated by the Minister to carry out the functions of the
Authority;
" Authority " means the Warehouse Licensing Authority
established under section three;
" bailor " means the owner of the agricultural commodities
who, directly or through their nominee, delivers goods to a
warehouse operator for the purpose of storage in their name
or the nominee's name;
" Board ” means the Board of the Authority established under
section seven;
" Chairperson " means the person appointed as Chairperson
of the Board under section seven;
" commingle "means the binning and storage of agricultural
commodities by class, under circumstances other than
identity preserved;
" conditioning ” means the drying or cleaning of agricultural
commodities;
" cultivation " means crop production, animal husbandry, game
ranching, aquaculture, horticulture or forestry;
" delivery ” means the voluntary physical transfer of agricultural
commodities from one person to another;
" depositor " means a person who deposits agricultural
commodities in a warehouse for storage, handling, shipment
or processing, or who is the owner or holder of a warehouse
receipt, or is otherwise entitled to possession of the
agricultural commodities;
" document of title" includes a negotiable and non-negotiable
warehouse receipt or any other document which is issued
in the regular course of a warehouse operators business,
and which proves that the possessor is entitled to receive,
hold and dispose of the agricultural commodities that it
covers;
"electronic warehouse receipt "means a warehouse receipt
stored in electronic form;
" farmer " means any person who, as owner or tenant of
land, uses such land for cultivation, whether for profit or
subsistence;
;
" farmer " means any person who, as owner or tenant of
land, uses such land for cultivation, whether for profit or
subsistence;
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Agricultural Credits [No. 35 of 2010 477
“farming stock” means all agricultural commodities, excluding
agriculture] commodities which are the subject of a
negotiable or non-negotiable warehouse receipt, whether
future growing or severed from the land, and after
severance whether subjected to any treatment or
manufacture, and includes
(a) livestock, poultry and bees, and the produce and
progeny thereof;
(b) wild animals in captivity;
(c) fish stock;
. (d) timber, both standing or cut;
(e) seed and manure;
(f) fertiliser, insecticide, oil and fuel;
(g) agricultural vehicles, trucks and truck spares,
machinery and other plant; and
(h) any agricultural fixture that a tenant, or any person
legally occupying land may, by law, be authorised
to remove;
"fungible agricultural commodities ” means agricultural
commodities of which any unit is, from its nature or by
mercantile custom, treated as equivalent of any other unit;
commodities ” means agricultural
commodities of which any unit is, from its nature or by
mercantile custom, treated as equivalent of any other unit;
"holder"means a person in whose favour an agricultural
charge is created, and includes an executor or administrator
and an assignee of that person;
“identity preserved” means the handling of an agricultural
commodity in such a manner that guarantees the return of
the actual quantity and quality of the agricultural commodity
to the depositor;
"inspector” means a person appointed as such under section
ten;
“insolvent ” means —
(a) an excess of liabilities over assets; or
(b) the inability of a warehouse operator to meet the
warehouse operator’s financial obligations as they
are due, and “insolvency” shall be construed
accordingly;
“negotiable receipt ” means a warehouse receipt which states
that the agricultural commodities received will be delivered
to the bearer or to the order of a named person;
“non-negotiable receipt” means a warehouse receipt issued
to the bearer or to the order of a specified person;
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Agricultural Credits [No. 35 of 2010 479
order of a specified person;
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Agricultural Credits [No. 35 of 2010 479
(b) as security for, or in total or partial satisfaction of, a
pre-existing claim;
(c) by accepting delivery under a pre-existing contract
for purchase; or
(d) generally, in return for any consideration sufficient
to support a simple contract.
PART II
THE WAREHOUSE LICENSING AUTHORITY
3. (1) There is hereby established the Warehouse Licensing Establishment
Authority which shall be a body corporate with perpetual succession of
and a common seal, capable of suing and being sued in its corporate Authority
name, and with power, subject to the provisions of this Act, to do all
such things as a body corporate may, by law, do or perform.
(2) The provisions of the State Proceedings Act shall apply to Cap. 71
civil proceedings by, or against, the Authority as if, for a reference
to the State there were substituted a reference to the Authority.
(3) The provisions of the Schedule apply to the Authority.
4. (1) The seal of the Authority shall be such device as may be Seal of
determined by the Board and shall be kept by the Director. Authority
the Authority shall be such device as may be Seal of
determined by the Board and shall be kept by the Director. Authority
(2) The affixing of the seal shall be authenticated by the
Director or any other person authorised in that behalf by a resolution
of the Board.
(3) Any contract or instrument which, if entered into or
executed by a person not being a body corporate, would not require
to be under seal, may be entered into or executed without seal on
behalf of the Authority by the Director or any other person generally
or specifically authorised in that behalf by the Authority.
(4) Any document purporting to be under the seal of the
Authority or issued on behalf of the Authority shall be received in
evidence and shall be deemed to be so executed or issued, as the
case may be, without further proof, unless the contrary is proved.
5. (1) The functions of the Authority are to— Functions of
Authority
(a) certify warehouses;
(b) approve negotiable warehouse receipt books; and
(c) perform any other function incidental or conducive to the
carrying out of its functions under this Act or any other
law.
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to the
carrying out of its functions under this Act or any other
law.
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(2) The Authority may, for the purpose of carrying out its functions
under this Act—
(a) investigate the storage, warehousing, classification,
weighing and certification of agricultural commodities;
(b) inspect any warehouse or cause it to be inspected for
purposes of this Act;
(c) determine whether warehouses for which certificates are
applied for, or have been issued under this Act are
suitable for the proper storage of any agricultural
commodities;
(d) classify warehouses according to their ownership, location,
surroundings, capacity, conditions and other qualities and
according to the type of certificate issued or to be issued
under this Act;
other qualities and
according to the type of certificate issued or to be issued
under this Act;
(e) determine the duties of the warehouse operators with
respect to their care of, and responsibility for, the
agricultural commodities stored;
(f) formulate guidelines and standards for the proper storage
of the agricultural commodities;
(g) suspend or revoke any certificate for any contravention
of, or failure to comply with, any provision of this Act or
condition of the certificate;
(h) charge, assess and collect fees for the examination or
inspection of a warehouse and for the issue of
certificates;
(i) examine the books, records, documents and accounts
relating to warehouses;
(j) close a warehouse which is operated without a valid
certificate or contrary to the provisions of this Act; and
(j) close a warehouse which is operated without a valid
certificate or contrary to the provisions of this Act; and
(k) carry out any other function incidental or conducive to the
carrying out of its functions under this Act.
Authorized 6. (1) The Minister may, by statutory instrument, appoint an
agencies authorised agency to perform such functions of the Authority as
the Minister may specify.
(2) The Minister may, where an authorised agency fails to
comply with the terms and conditions of its appointment, suspend
or revoke the appointment of that authorised agency, after giving
that authorised agency twenty-one days’ notice to that effect and
an opportunity to be heard.
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(No. 35 of 2010 481
(3) The suspension or revocation of the appointment of an
authorised agency may be in addition to any other penalty to which
the authorised agency may be liable under this Act.
7. (1)There is hereby constituted a Board of the Authority which
shall consist of the following part-time members appointed by the
Minister:
Act.
7. (1)There is hereby constituted a Board of the Authority which
shall consist of the following part-time members appointed by the
Minister:
(a) a representative of the Ministry responsible for agriculture;
(b) a representative of the Ministry responsible for trade;
(c) a representative of the Ministry responsible for livestock;
(d) a representative of the Attorney General;
(e) one representative of the clearing and forwarding agencies;
(f) one representative of the Bankers Association of Zambia;
(g) one representative of a small scale farmers organisation;
(h) one representative from the Zambia National Farmers’
Union; and;
(i) one representative of the insurance industry;
(j) one representative of the Zambia Association of Chambers
of Commerce and Industry; and
(k) two other persons appointed by the Minister.
(2) The Chairperson and the Vice-Chairperson of the Board
shall be appointed by the Minister from amongst the members of
the Board.
(3) A person shall not be appointed as a member of the Board if
that person—
(a) is not a citizen of Zambia;
(b) is a declared insolvent or bankrupt;
(c) is declared to be of unsound mind; or
(d) is convicted of an offence under this Act or any written law and been sentenced therefor to imprisonment for a
period exceeding six months without the option of a
fine.
ffence under this Act or any written law and been sentenced therefor to imprisonment for a
period exceeding six months without the option of a
fine.
(4) A member shall hold office for a period of three years and
may be appointed for one further period of three years.
(5) A member may resign upon giving one month’s notice in
writing to the Minister.
(6) The office of a member shall become vacant
Board of
Authority
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riting to the Minister.
(6) The office of a member shall become vacant
Board of
Authority
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(4) A member shall hold office for a period of three years and
may be appointed for one further period of three years.
(5) A member may resign upon giving one month’s notice in
writing to the Minister.
(6) The office of a member shall become vacant
Board of
Authority
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482 No. 35 of 2010] Agricultural Credits (a) if the member is absent, without reasonable excuse from
three consecutive meetings of the Board of which the
member has had notice;
(b) if the member is adjudged bankrupt;
(c) if the member is convicted of an offence under this Act or
any other written law and sentenced therefor to
imprisonment for a period exceeding six months without
the option of a fine;
(d) if the member is declared to be of unsound mind; or
(e) upon the member's death. (7) The provisions of the Schedule apply to the Board. Functions of 8.
mber is declared to be of unsound mind; or
(e) upon the member's death. (7) The provisions of the Schedule apply to the Board. Functions of 8.
Subject to the provisions of this Act, the functions of the
Board Board are to—
(a) carry out the functions of the Authority;
(b) cause the operations of warehouse operators to be
examined, including auditing the agricultural commodities,
books, documents and records relating to the warehouse
so as to determine whether the interests of the producers,
shippers and receivers of agricultural commodities and
the holders of warehouse receipts are adequately
protected and safeguarded;
(c) formulate standards for agricultural commodities stored
in warehouses certified under this Act;
(d) determine the rules relating to the certification, weighing,
classification and grading of agricultural commodities
stored in warehouses certified under this Act;
(e) take such action, or issue such orders, as are necessary to
prevent any fraud by, or discrimination against, depositors
of agricultural commodities in warehouses; and
(f) perform such other functions as may be conferred or
imposed on the Board under this Act or any other law.
in warehouses; and
(f) perform such other functions as may be conferred or
imposed on the Board under this Act or any other law.
Director and 9. (1) The Board shall appoint a Director on such terms and
other staff conditions as the Board may determine. (2) The Director shall be the chief executive officer of the
Authority and shall be responsible, under the direction of the Board,
for the day-to-day administration of the Authority. (3) The Director shall be an ex- officio member of the Board.
(4) The Board may appoint, on such terms and conditions as it
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Agricultural Credits [No. 35 of 2010 483
may determine, such other staff as it considers necessary for the
performance of the Authority’s functions under this Act.
Inspectors
10. (1) The Board may appoint any suitable person to be an
inspector for the purposes of ensuring compliance with this Act, on
such terms and conditions as the Board may determine.
(2) The Board shall provide an inspector with an identity card,
in the prescribed form, which shall be prima facie evidence of the
inspector’s appointment as such.
shall provide an inspector with an identity card,
in the prescribed form, which shall be prima facie evidence of the
inspector’s appointment as such.
(3) An inspector shall, in performing any function under this
Act—
(a) be in possession of the identity card referred to under
subsection (2); and
(b) show the identity card to any person who requests to see
it or is subject to an investigation under this Act.
(4) An inspector may, with a warrant, at any reasonable time
(a) enter and search any warehouse or any other premises,
including a private dwelling, where information or
documents which are relevant to an investigation may
be kept;
(b) search any person in a warehouse or premises if there
are reasonable grounds to believe that the person has
possession of any document, warehouse receipt or article
that has a bearing on an investigation:
Provided that a person shall only be searched
by a person of the same sex;
(c) examine any document, warehouse receipt or article
found in any warehouse or other premises that has a
bearing on an investigation;
document, warehouse receipt or article
found in any warehouse or other premises that has a
bearing on an investigation;
(d) require information to be given about any document,
warehouse receipt, article, warehouse or any other
premises by—
(i) the owner of the warehouse or premises;
(ii) the person in control of the warehouse or premises;
(iii) any person who has control of the document,
warehouse receipt or article; or
(iv) any other person who may have the information;
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(e) take extracts from, or make copies of, any book, warehouse
receipt or document found in the warehouse or premises
that has a bearing on an investigation;
(f) use any computer system in any warehouse or premises,
or require the assistance of any person in the warehouse
or premises to use that computer system, to—
(i) search any data contained in, or available to the
computer system;
(ii) reproduce any record from the data; or
(iii) seize any output from the computer for
examination and copying; and
mputer system;
(ii) reproduce any record from the data; or
(iii) seize any output from the computer for
examination and copying; and
(g) attach and, if necessary, remove from the warehouse or
premises for examination and safeguarding any
document or article that has a bearing on an investigation.
(5) An inspector who removes any warehouse receipt, document
or article from any warehouse or premises under paragraph (g) of
subsection (4) shall—
(a) issue a receipt for the document, warehouse receipt or
article to the owner of, or person in control of, the
warehouse or premises; and
(b) return the document, warehouse receipt or article as soon
as practicable after achieving the purpose for which it
was removed.
(6) A person who—
(a) delays or obstructs an inspector in the performance of
the inspector’s functions;
(b) refuses to give an inspector such reasonable assistance
as the inspector may require for the purpose of
exercising the inspector’s powers;
(c) gives an inspector false or misleading information in answer
to an inquiry made by the inspector; or
(d) impersonates or falsely represents oneself to be an
inspector;
on in answer
to an inquiry made by the inspector; or
(d) impersonates or falsely represents oneself to be an
inspector;
commits an offence and is liable, upon conviction, to a fine not
exceeding two hundred thousand penalty units or to imprisonment
for a period not exceeding two years, or to both.
(7) An inspector shall furnish the Authority with a written report
and any other information relating to an inspection, as the Authority
may require.
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Agricultural Credits [No. 35 of 2010 485
(8) Nothing in this section requires a person to disclose or
produce information, a warehouse receipt or a document, if the
person would in an action in a court be entitled to refuse to disclose
or produce the information, warehouse receipt or document.
PART III
AGRICULTURAL CHARGES
11. (1) An agricultural charge may be fixed or floating, or both.
(2) An agricultural charge may be in any form and made upon
such conditions as the parties to the charge may agree, and any
surety may be made a party to the charge.
ural charge may be in any form and made upon
such conditions as the parties to the charge may agree, and any
surety may be made a party to the charge.
(3) A farmer may, individually or in association, create in favour
of any person a charge on any farming stock, additional asset or
other agricultural asset, security for—
(a) inputs or other items required for cultivation;
(b) sums advanced or to be advanced to the farmer; or
(c) sums paid or to be paid on the farmer's behalf under any
guarantee; and such security may cover any interest,
commission or charge thereon.
(4) Notwithstanding any other provision of this Act, a related
business or a trader may create in favour of any person, an
agricultural charge on all or any portion of the agricultural
commodities that the related business or trader purchases or intends
to purchase from a farmer and such security may cover any interest,
commission or charge thereon.
(5) Any property affected by a fixed charge may include farming
stock, additional assets or other agricultural assets belonging to the
farmer, trader or related business at the date of the charge and as
may be specified in the charge.
sets or other agricultural assets belonging to the
farmer, trader or related business at the date of the charge and as
may be specified in the charge.
(6) The principal sum secured by an agricultural charge may
be—
(a) a specific amount advanced in one sum or in instalments;
or
(b) a fluctuating amount advanced on a current account not
exceeding at any one time such amount, if any, as may
be specified in the charge:
Provided that any charge for securing a current
account or any further advances shall continue to be
effective against the farmer, trader or related business
and against the holder of any subsequent interest in
the agricultural commodities charged, not withstanding
the fluctuation or temporary extinction of the
indebtedness and notwithstanding that the lender may
have had notice of the subsequent interest.
Agricultural
charge on
farming
stock and
assets
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Effect of
fixed charge 12. (1) A fixed charge shall confer on the holder the following
rights:
6 No. 35 of 2010] Agricultural Credits
Effect of
fixed charge 12. (1) A fixed charge shall confer on the holder the following
rights:
(a) a right, upon the happening of any event specified in the
charge as being an event authorising the seizure of
property subject to the charge to take possession of the
property; and
(b) where possession of any property has been taken, a right,
after an interval of twenty-one days or such shorter
period as may be specified by the charge, to sell the
property.
(2) A holder shall, where the holder exercises the power of sale
under paragraph (b) of subsection (1), apply the proceeds of the
sale in or towards the discharge of the moneys and liabilities secured
by the fixed charge and the costs of seizure and sale, and to pay
the surplus, if any, of the proceeds to the farmer.
(3) A fixed charge shall impose on the farmer, trader or related
business, the following obligations:
s to the farmer.
(3) A fixed charge shall impose on the farmer, trader or related
business, the following obligations:
(a) an obligation where the farmer, trader or related business
sells any of the property, or receives any money in
respect of any asset, comprised in the charge, forthwith
to pay to the holder the amount of the proceeds of the
sale or the money so received, except to such extent as
the charge otherwise provides or the holder otherwise
allows, and any sum so paid shall be applied, except so
far as otherwise agreed by the holder, in or towards the
discharge of moneys and liabilities secured by the charge:
Provided that if the holder is a related business,
the farmer or trader shall not sell, except as provided
under this section, the commodity for which the farmer
received loans or advances of inputs or other items
required for cultivation but shall deliver to the holder
the agricultural commodity in the amount agreed in
the charge; and
ltivation but shall deliver to the holder
the agricultural commodity in the amount agreed in
the charge; and
(b) an obligation, in the event of the farmer, trader or related
business receiving any money under any policy of
insurance on any of the property comprised in the
charge, forthwith to pay the amount of the sum so
received to the holder, except to such extent as the charge
otherwise provides or the holder otherwise allows, and
any sum so paid shall be applied, except so far as is
otherwise agreed by the holder, in or towards the
discharge of moneys and liabilities secured by the charge.
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Agricultural Credits [No. 35 of 2010 487
wards the
discharge of moneys and liabilities secured by the charge.
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Agricultural Credits [No. 35 of 2010 487
(4) An insurer may, where any money is due to a farmer, trader
or related business, as the case may be, under any policy of
insurance on any of the property comprised in a fixed charge,
notwithstanding anything contained in the insurance policy, pay such
money to the holder of the charge to the extent of the charge, and
any such payment shall be a valid discharge of the liability of the
insurer to the farmer, trader or related business, as the case may
be, to the extent of the amount so paid, and the provisions of
paragraph (b) of subsection (2) shall apply to the amount so paid as
if it had been paid to the holder by the farmer, trader or related
business, as the case may be.
(5) Subject to compliance with the obligations imposed under
subsection (3), a fixed charge shall not prevent a farmer, related
business or trader from selling any of the property subject to the
charge.
shall not prevent a farmer, related
business or trader from selling any of the property subject to the
charge.
(6) A holder shall, where the proceeds of a sale made under
subsection (2) are paid to any person other than a person referred
to under that subsection, have a right to recover the proceeds from
such person if the holder proves that the person knew that the
proceeds were paid to the holder in breach of the farmer’s, related
business or trader’s obligations.
13. An agricultural charge creating a floating charge shall have Effect of
the like effect as if the charge had been created by a registered floating
debenture issued by a company: charge
Provided that—
(a) the charge shall become a fixed charge on the property
upon—
that—
(a) the charge shall become a fixed charge on the property
upon—
(i) a receiving order in bankruptcy being made
against the farmer, trader or related business;
(ii) the death of the farmer or trader;
(iii) the dissolution of the partnership in the case
where the property charged is partnership
property; or
(iv) notice, in writing, to that effect being given by
the holder on the happening of any event
which, by virtue of the charge, confers upon
the holder the right to give the notice; and
which, by virtue of the charge, confers upon
the holder the right to give the notice; and
(b) the farmer, trader or related business, while the
agricultural charge remains a floating charge, shall
be subject to the like obligation as in the case of a
fixed charge to pay over to the holder the amount
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488 No. 35 of 2010] Agricultural Credits
se of a
fixed charge to pay over to the holder the amount
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488 No. 35 of 2010] Agricultural Credits
(b) the farmer, trader or related business, while the
agricultural charge remains a floating charge, shall
be subject to the like obligation as in the case of a
fixed charge to pay over to the holder the amount
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488 No. 35 of 2010] Agricultural Credits received by the holder by way of proceeds of sale, in
respect of other agricultural assets or additional assets
under policies of insurance, or by way of
compensation:
Provided that it shall not be necessary for the
farmer, trader or related business to comply with the
obligations if and so far as the amount so received is
expended in the purchase of farming stock which, on
purchase, becomes subject to the charge. Notice of 14.
s the amount so received is
expended in the purchase of farming stock which, on
purchase, becomes subject to the charge. Notice of 14.
(1) Notwithstanding sections eleven, twelve and thirteen, a
agricultural farmer, trader or related business shall, when selling or causing to
charge be sold, any farming stock or additional asset which is subject to an
agricultural charge, give to the person buying, or the person effecting
the sale of, the farming stock or additional asset, before payment
of the purchase price, a written notice which shall be acknowledged
by the purchaser or the person effecting the sale signing the original
and a copy of the notice, containing the following information:
(a) the name and address of all persons holding an agricultural
charge over the farming stock or additional assets to be
sold;
(b) the priority of the agricultural charges; and
(c) the amount secured by each agricultural charge.
(b) the priority of the agricultural charges; and
(c) the amount secured by each agricultural charge.
(2) Where a farmer, trader or related business gives written
notice to any person under subsection (1), the written notice shall
constitute written notice, in respect of any subsequent sale of any
agricultural commodity which is the subject of the charge, given to
that person within a period of twelve months from the date of the
written notice:
Provided that the farmer, trader or related business, before making, or causing to be made, any subsequent sale,
shall notify that person of any agricultural charge which
affects the agricultural commodity created by the farmer,
trader or related business after the date of the written notice
and such notice shall state the name and address of the
holder, the priority of the charge and the amount secured
by the charge.
such notice shall state the name and address of the
holder, the priority of the charge and the amount secured
by the charge.
(3) A notice given under the proviso to subsection (2) shall, for
the purposes of this section, be treated as forming part of the written
notice given under subsection (1) by the farmer, trader or related
business to the buyer or person effecting a sale on behalf of the
farmer, trader or related business, as the case may be.
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Agricultural Credits [No. 35 of 2010 489
(4) A person who receives a written notice under subsection (1)
shall pay the proceeds of the sale to the holder in accordance with
the written notice, having regard to the priority and amounts stated
in the written notice and shall pay the surplus, if any, remaining
after making the payments, to the farmer, trader or related business.
(5) A person who contravenes subsection (4) commits an offence
and is liable, upon conviction, to the full value of the agricultural
charge as specified in the notice.
s subsection (4) commits an offence
and is liable, upon conviction, to the full value of the agricultural
charge as specified in the notice.
(6) Any moneys paid out in accordance with subsection (4) shall
reduce the liability of the farmer, trader or related business under
the agricultural charges created by the farmer, trader or related
business, in order of their priority, and the amount of each
agricultural charge shall be reduced by the amount so paid.
(7) Any payment made in accordance with subsection (4) shall
discharge the buyer or person effecting the sale on behalf of the
farmer, trader or related business, as the case may be, from any
claim, howsoever arising, in respect of the proceeds of the sale.
(8) A farmer, trader or related business who fails to give written
notice in accordance with this section commits an offence and is
liable, upon conviction, to a fine not exceeding ten percent of the
outstanding loan.
accordance with this section commits an offence and is
liable, upon conviction, to a fine not exceeding ten percent of the
outstanding loan.
15. (1) An agricultural charge shall have effect Supplementary
notwithstanding anything contained in the Bills of Sale Acts, 1878 provisions in
and 1882, of the United Kingdom and an agricultural charge shall respect of
not be deemed to be a bill of sale within the meaning of those Acts. agricultural
charges
(2) Agricultural charges shall, in relation to one another, have
priority in accordance with the times at which they are respectively
registered under this Act:
Provided that an agricultural charge created solely to
secure the payment of insurance premiums upon farming
stock shall have priority over any other agricultural charge
not created for such purpose.
(3) Where an agricultural charge creating a floating charge has
been created, an agricultural charge purporting to create a fixed
charge on any of the property comprised in the floating charge
shall, as respects the property subject to the floating charge, have
no effect so long as the floating charge remains in force.
in the floating charge
shall, as respects the property subject to the floating charge, have
no effect so long as the floating charge remains in force.
(4) Farming stock which is subject to an agricultural charge
shall not, for the purpose of the Bankruptcy Act, be considered as Cap. 82
goods in the possession, order or disposition of a farmer, trader or
related business in the farmer’s or trader’s trade or business, by
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490 No. 35 of 2010] Agricultural Credits
the consent and permission of the true owner thereof, under such
circumstances that the owner is the reputed owner thereof.
(5) An agricultural charge shall not protect property which, but
for such charge, would have been liable to distress for rent or
rates.
Registration 16. (1) An agricultural charge shall be registered within thirty
of agricultural days after its execution and if not so registered, shall be void as
charge against any person other than the farmer:
after its execution and if not so registered, shall be void as
charge against any person other than the farmer:
Provided that the Registrar may, in proving that
omission to register within the specified time was
accidental or due to inadvertence, extend the time for
registration on such terms as the Registrar thinks fit.
(2) An agricultural charge shall be effected by sending by post
or delivering to the Registrar's office located in the district, or,
where no such office exists, to such other office as the Minister
shall, by notice in the Gazette, specify, a memorandum of the
instrument creating the charge and the particulars of the charge as
may be prescribed, together with the prescribed fee and upon receipt
thereof, the Registrar shall enter the particulars in the register and
file the memorandum.
(3) The register kept and the memoranda filed under this section
shall, at all reasonable times, be open to inspection by any person
on payment of the prescribed fee, and any person inspecting the
register or any memorandum may, on payment of the prescribed
fee, make copies or extracts therefrom.
ibed fee, and any person inspecting the
register or any memorandum may, on payment of the prescribed
fee, make copies or extracts therefrom.
(4) A person may, on payment of the prescribed fee, require to
be furnished with a copy of any entry in the register or memorandum
certified to be a true copy by the Registrar.
(5) Registration of an agricultural charge may be proved by the
production of a certified copy of the entry in the register relating to
the charge, and a copy of any such entry purporting to be certified
as a true copy by the Registrar shall, in all legal proceedings, be
evidence of the matters stated therein without proof of the signature
or authority of the person signing it unless the contrary is proved.
(6) The Registrar shall not be liable to any action or proceeding
for, or in respect of, any act or matter done or omitted to be done,
in good faith, in the exercise or purported exercise of the powers
conferred on the Registrar under this Act.
(7) A person aggrieved with a decision of the Registrar may
appeal to the High Court within thirty days of the decision.
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Agricultural Credits [No. 35 of 2010 491
e Registrar may
appeal to the High Court within thirty days of the decision.
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Agricultural Credits [No. 35 of 2010 491
(8) Registration of an agricultural charge under this section
shall, from the date of registration, be deemed to constitute actual
notice of the charge and of the fact of the registration to all persons
and for all purposes connected with the property comprised in the
charge:
Provided that—
(a) where an agricultural charge is expressly made for
securing a current account or further advances, the
holder, in relation to making further advances under
the charge, shall not be deemed to have notice of
another agricultural charge by reason only that it is
so registered if it was not so registered at the time
when the first mentioned charge was created or when
the last search, if any, by or on behalf of the holder
was made, whichever was the later; and
(b) registration shall not be deemed to constitute actual
notice to a purchaser for the purposes of section
fourteen.
ion shall not be deemed to constitute actual
notice to a purchaser for the purposes of section
fourteen.
17. (1) Except as otherwise provided under this Act, a person Restriction
on
shall not print for publication or publish any list of agricultural charges
publication
or of the name of any farmer, trader or related business who have of
agricultural
created agricultural charges. charges
(2) A person who contravenes subsection (1) commits an
offence and is liable, upon conviction, to a fine not exceeding three
hundred thousand penalty units.
(3) A prosecution for an offence under this section shall not be
commenced without the consent of the Director of Public
Prosecutions.
units.
(3) A prosecution for an offence under this section shall not be
commenced without the consent of the Director of Public
Prosecutions.
(4) Where a farmer, trader or related business mortgages
interest in land, and the farmer, trader or related business creates
an agricultural charge which includes growing crops, the rights of
the holder under such charge shall have priority over those of the
mortgagee, whether in possession or not, and irrespective of the
dates of the mortgage and the charge.
18. (1) A farmer, trader or related business who creates an Fraud
agricultural charge and who, with intent to defraud—
(a) fails to comply with the obligations imposed by this Act as
to the payment to the holder of any sums received by
the farmer, trader or related business by way of proceeds
of sale, or in respect of other agricultural assets, or under
a policy of insurance or by way of compensation; or
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492 No. 35 of 2010] Agricultural Credits
a policy of insurance or by way of compensation; or
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492 No. 35 of 2010] Agricultural Credits
(b) removes or permits to be removed any property subject
to the charge;
commits an offence and is liable, upon conviction, to imprisonment
for a period not exceeding seven years.
(2) Where any related business, with intent to defraud,
misrepresents its rights and obligations under this Act or in any
way deprives a farmer of the farmers rights under this Act, the
directors and managers of the business committing such violation
shall be liable, upon conviction, to a fine not exceeding three hundred
thousand penalty units or to imprisonment for a period not exceeding
three years, or to both, unless they show that the offence was
committed without their knowledge or consent.
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Agricultural Credits [No. 35 of 2010 493
PART IV
CONTRACTS FOR ADVANCES ON INPUTS AND OTHER ITEMS
19. (1) A contract for the advancement to a farmer of Validity of
inputs or other items required for cultivation shall state— contracts
(1) A contract for the advancement to a farmer of Validity of
inputs or other items required for cultivation shall state— contracts
(a) the value of the inputs or other items at the time the inputs
or items are advanced to the farmer;
(b) the interest rate to be charged, expressed at an annual
percentage rate; and
(c) any charges, fees or penalties that the farmer will be
required to pay if the farmer does not pay or deliver the
produce at the price agreed on, as stipulated in the
contract, unless subsection (1) of section fourteen
applies.
(2) A trader or related business advancing any inputs or other
items required for cultivation shall furnish the farmer, at the time
each input or item is advanced, a written statement showing the
value and cost to the farmer of the input or item, the interest rate
and any charges, fees or penalties, as provided under this section.
(3) Direct or indirect compounding of interest shall not be allowed
as part of the contract specified under subsection (1).
d under this section.
(3) Direct or indirect compounding of interest shall not be allowed
as part of the contract specified under subsection (1).
(4) Notwithstanding any other law, a person who advances
inputs or other items required for cultivation to a farmer and fails to
fully disclose to the farmer the cost of the input or item, the interest
to be paid by the farmer and any charges, fees or penalties as
required under this section shall be ineligible to register, under this
Act, a charge created by the farmer on the basis of an agreement
or contract, and such charge shall be void.
20. A person who advances inputs or other items required for Failure to
cultivation to a farmer and fails to fully disclose to the farmer the make full
cost of any input or item, the interest to be paid by the farmer and disclosure of
any charges, fees or penalties as required under section nineteen, cost of inputs,
commits an offence and is liable, upon conviction, to a fine not items, etc.
exceeding three hundred thousand penalty units.
PART V
REGISTRATION OF WAREHOUSES
three hundred thousand penalty units.
PART V
REGISTRATION OF WAREHOUSES
21. (1) A person who intends to operate a warehouse business Application
shall apply for a certificate under this Part. for
registration
(2) An application for a certificate shall be made to the Board of
in the prescribed manner and form upon payment of the prescribed warehouse
fee.
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494 No. 35 of 2010] Agricultural Credits
Bond
22. (1) An applicant shall execute and file with the Board a bond sufficient to secure the performance by the applicant of the obligations as a warehouse operator under this Act.
(2) Where the Board determines that a previously approved bond is or has become insufficient, it may require an applicant to give such additional bond as the Board may specify for purposes of this Act.
(3) The Board may, where an applicant fails to give the additional bond within the period specified by the Board under subsection (2), reject the application for a certificate or suspend or revoke the certificate of registration.
the period specified by the Board under subsection (2), reject the application for a certificate or suspend or revoke the certificate of registration.
Designation as certified and bonded warehouse
23. The Board may, where an applicant executes a bond as required under section twenty-two, designate the warehouse in respect of which a bond is executed as both certified and bonded.
ant executes a bond as required under section twenty-two, designate the warehouse in respect of which a bond is executed as both certified and bonded.
Designation as certified and bonded warehouse
23. The Board may, where an applicant executes a bond as required under section twenty-two, designate the warehouse in respect of which a bond is executed as both certified and bonded. Insurance
24. (1) An applicant for a certificate to operate a warehouse shall file with the Board a certificate of insurance evidencing an effective policy of insurance issued by an insurance company licenced under the Insurance Act, 2005, in the name of the applicant insuring all the agricultural commodities which are or may be in the warehouse for their full market value for loss by fire, explosion, theft, lightening or such other risk as may be prescribed. (2) A warehouse operator shall, where a fire, explosion, lightening or any other risk destroys or damages any agricultural commodities in a warehouse, upon demand by the depositor, and upon being presented with the receipt or other evidence of ownership and after deducting the warehouse operators charges and advances at the market value of the agricultural commodities, make settlement with the insurance company.
educting the warehouse operators charges and advances at the market value of the agricultural commodities, make settlement with the insurance company.
(3) A warehouse operator shall make complete settlement to all the depositors whose agricultural commodities are stored in the warehouse which are damaged or destroyed, within ten days of the settlement with the insurance company. (4) The Board shall, where it determines that a previously approved insurance in relation to a warehouse is insufficient, require the warehouse operator to give additional insurance. (5) The Board shall, where a warehouse operator fails to comply with subsection (3) or (4), suspend or revoke the warehouse certificate.
Issue of certificate
25. (1) The Board shall, before granting a certificate, inspect the warehouse in respect of which an application is made to determine whether the warehouse is suitable for the storage of the agricultural commodities for which the certificate is required.
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Agricultural Credits [No. 35 of 2010 495
for the storage of the agricultural commodities for which the certificate is required.
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Agricultural Credits [No. 35 of 2010 495
(3) A warehouse operator shall make complete settlement to all the depositors whose agricultural commodities are stored in the warehouse which are damaged or destroyed, within ten days of the settlement with the insurance company. (4) The Board shall, where it determines that a previously approved insurance in relation to a warehouse is insufficient, require the warehouse operator to give additional insurance. (5) The Board shall, where a warehouse operator fails to comply with subsection (3) or (4), suspend or revoke the warehouse certificate.
Issue of certificate
25. (1) The Board shall, before granting a certificate, inspect the warehouse in respect of which an application is made to determine whether the warehouse is suitable for the storage of the agricultural commodities for which the certificate is required.
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Agricultural Credits [No. 35 of 2010 495
for the storage of the agricultural commodities for which the certificate is required.
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Agricultural Credits [No. 35 of 2010 495
(2) The Board shall, within thirty days of receipt of an application
for a certificate, register a warehouse and issue a certificate,
where —
(a) the applicant is in possession of the warehouse, whether
as a tenant or owner;
(b) upon inspection, the warehouse is suitable for warehousing
of agricultural commodities in accordance with the
provisions of this Act;
(c) the director or manager of the warehouse or warehouse
operator has not been convicted of an offence under
any law involving fraud or dishonesty;
(d) the warehouse and the agricultural commodities which
are or may be kept in the warehouse are fully insured in
respect of fire, theft, lightening or any other risk; and
(e) the applicant is financially capable of conducting the
business of warehousing.
risk; and
(e) the applicant is financially capable of conducting the
business of warehousing.
(3) Two or more warehouses which constitute a single operating
unit may be certified under a single certificate if —
(a) the same warehouse operator operates each warehouse
in conjunction with the other; or
(b) all the warehouses function under the same name and
with the same personnel, office, books and records. (4) The warehouses certified under a single certificate shall be
treated as a single warehouse for purposes of this Act except for
the issuance of warehouse receipts and the delivery of agricultural
commodities. (5) The Board shall reject an application which does not meet
the requirements of this Act and inform the applicant accordingly
and give the reasons therefor. (6) The Board shall communicate its decision in respect of an
application for a certificate to the applicant, in writing, within seven
days of such decision. 26.
of an
application for a certificate to the applicant, in writing, within seven
days of such decision. 26.
A certificate issued under section twenty-five shall— Validity of
(a) contain the terms and conditions of the certificate; and certificate
(b) be valid for such period as may be specified in the
certificate.
27. A holder of a certificate shall display the certificate in a Display of
conspicuous place in the office room of the warehouse. certificate
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