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Parliament Briefed on Agricultural Produce Agents Bill

May 27, 2022

Parliament

The risk for farmers is worsened when farmers transfer their produce to agents to sell on their behalf without transferring the risk of loss.

The agriculture, land reform and rural development department emphasised this in a briefing in parliament on the Agricultural Produce Agents Amendment Bill.

The bill was tabled in parliament in November 2020.

The bill aims to amend the Agricultural Produce Agents Act, 1992, so as to:

• refine certain definitions;
• provide for certain provisions of the Agricultural Produce Agents Act, 1992, to apply to all categories of agents;
• clarify the appointment and responsibilities of the registrar;
• provide for financial statements of the council to be audited by the Auditor General;
• provide for insurance of the fidelity fund;
• further clarify the conditions for acting as an agent;
• provide for trust accounts for export agents;
• provide for insurance by export and fresh produce agents; and
• provide for matters connected therewith.

According to the bill’s memorandum, the objectives of the Agricultural Produce Agents Council (APAC) are to regulate the occupations of fresh produce, export and livestock agents and to maintain and enhance the status and dignity of the occupations and the integrity of persons practicing them.

The functions of the APAC include the formulation of policy and the setting up of rules and codes of conduct.

Briefing the portfolio committee on agriculture, land reform and rural development on the bill last year, the department pointed out that current shortcomings of the act include that APAC can’t undertake inspections, investigations and disciplinary actions against export and livestock agents; fresh produce and export agents are not compelled to fidelity insurance to protect producers against losses; export agents not compelled to keep producer trust accounts and Fidelity Fund not insured with a risk of large claims.

The committee called for comment on the bill in 2021.

During a briefing in March 2022, the department emphasized that the “protection of the farmer who uses the aggregated services of a third party (agent) to market his Agricultural Product (defined in the Act) is of utmost importance”.

Hearings on the bill were held at the beginning of May 2022.

In the latest briefing, the department also pointed out that “agents charge fees/commission on the produce they sell on behalf of the farmer, but barely take any responsibility for failure to sell (i.e. the risk of loss rests solely with the farmer while the benefits of gain are shared between the farmer and the agent)”.

The department added that the act is more effective with regards to the regulation of fresh produce agents.

In another briefing, the department updated the select committee on land reform, environment, mineral resources and energy on the African Continental Free Trade Area (AFCTFA) and steps taken to ensure that it expands markets for domestic production.

The department highlighted that its main role in the agreement is to ensure that a conducive environment for businesses to thrive is put in place.

The department confirmed that all the rules of origin have been concluded except for Sugar Heading 1702 and 1704.

It continues to form part of the negotiation for the unresolved rules of origin.