Agricultural Credits Act, 1995

1. This Acqnay be cited as the Agricultural Credit Act; 1995, and shall come into operation on such date as the Minister may, by statutory instrument, appoint Short title and commence­ ment

2. In this Act, unless the context otherwise requires-· Interpreta­ tion "additional assets" means arty tangible asset, excluding land, that belong to a farmer, trader or related busin�ss, pertain­ fag directly or indirectly to agricultural.production, pro­ cessing ·or trade, all accounts receivable, cha�el paper, · warehouse receipts, both negotiable and non-negoti.able, promissory notes and includes savings accounts on deposit with any bank, credit union, savings institution or other similar organisation; "agricultural charge" means a charge, Jien or assignment created under section three; " agricultural commodity " means anything derivi;:d directly or indireclly from cultivation; " cultivation " means crop production; animal husbandry, game ranching, aquaculture, horticulture or forestry; ( I ---------- 236 No. 23 of 1995] Agricullitral Credit App.4 ".farmer" means any person who, as owner or tenant of land uses such land for cultivation, whether for profit or subsis­ tence; "fanning stock" means :ill agricultural commodities, whether future growing or severed from ihe land, and after sever­ ance whether subjected' to any treatment or manufacture and includes- (a) livestock, poultry and bees, and the produce and progeny thereof; (b) wild animal� in capt_ivity; (<;} fish swcks; (d) timber both standing or cut; (e) seeds .incl m:murcs; (f) fertilisers, insecticides, oils, and fuels (g) agricultural vehicles, trucks and truck spares, ma­ . chinery, and other plant; or (h) :my .igricullural fixture that a tenant, or any person legully occupying land, may by law be authorised 10 remove; " !mldcr " means a person in whose favour an agricultural charge is created, and includes the executors, administra­ tors and assignees of that person; ·, other agricultural assets " means any right of a tenant. including any right to compensation for improvementli: " Registrar" means the Registrar ofAgricultural Charges·or any person appointed to perfonn_thefunctions of Registrar, " related business " means an individual, a company, a cooperative, a partnership, an association-and any group of persons acting in concert, whether ornot incorporated, who or which, as the c.ise maybe, gives loans to fanners for the purchase of inputs or other items required for cultivation; " trader " means any pcrson who, as a l:)roker, dealer, or otherwise, acquires from a farmer or any other person, through purchase or.otherwise, for the ptii-poseof resale, or processing, any agricultural commodity. PART II AGRrc:1:i:rt;RAI, CflARGES Agricullllral charges on farming stock and assets

3. (I) An agricultural charge 11"!:IY be fixed or floating, or both. (2),An agricultural charge may be in fonn and made upon such conditions as the parties to the charge may agree; and any surely may be made a pany to the charge, '\- ----- ---- - - ------ Agricultural Credit [No. 23 of 1995 233 AGRICULTURAL CREDIT firer,, 1995 ARRANGEMENT OF SECT!� PART! ,, PREI.IMINARY Section 1, Short title and commencement

2. Interpretation PART II AGRICULTIJRAL CHARGES

3. Agricultural charges on fanning stock and assets

7. Supplemental provisions as to agricultural charges

9. Restriction. on publication of agricultural charges

10. Frauds PART1II VALIDITY OF CONTRACTS FOR ADVANCES ON INP!ITS AND OTHER ITEMS

12. Failing to make_ full disclosure of cost of inputs or other items and interest etc. I· PARTIV GENERAL

15. Repeal of Cap. 349 ' . L i i l I I, I­ I ' ,, J I Single copies oflhis Acl may be obtained from the Government Prinler, P.O. Box 30136, 10100 Lusaka. Price K260.00. Agricultural Credit [No. 23 of 1995 237 (3) A fanner, may, individually orin association, create in favour -of any person a charge on any farming stock, additional asset 01 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) si.;ms paid or 10 be paid on 1he farmer's behalf under any guarantee; and such security may also c_overinterest, commission and charges thereon. (4) Notwithstanding any other provision of this Act, a relatec.l business or a trader may create in favour of any person-an agricul­ mral charge on all or any portion of the agricultural commodities the related business or trader purchases or intends to purchase from a fanner; and such securitymay also charge interest, commission and charges thereon. (5) �e property affected by a fixed charge shall be such property., fonning part of the farming stock, additional" assets, or other agricultural asseL�, and belonging to the fanner, 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 currel)t account not exceeding at-any one time such amount, if any, as may be spcci lied in the charge: Provided that any charge for securing a current account or any further advances shall continue to be effeclive against the fanner, trader or related business and against the holder of any subsequent interest in the agricultural commodities charged, notwithstand­ ing the fluctuation or temporary extinction of the indebtedness and notwithstanding that the lender may have had notice of the subseql!entinterest. (I) A fixed charge shall confer on the holder the following

4. 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 t!ie charge, to take possession of any property so subject; Effect of fixed charge ! I 1: I­ I I I I : ! ' : I . ' ! ' I I: ' i ··--·- - ---•-r ' . 238 No. 23 of 1995] Agricultural Credit (b} where possession of any propeny has been taken, a right, after an interval of founeen days or such shoner period as may be specified by the charge, to sell the propeny. (2) Where a holder exercises the power of sale under paragraph (b) of subsection (l ), the holder shall apply the proceeds of sale in or towards thedischargeof l11e moneys and liabilities secured by\)le / fixed ch.arge, and the costs of seizure and sale, and to pay the surplus, if any, or the proceeds to the farmer. - (3) A fixed charge shall impose on the farmer, trader or related business, the following ohligaliOns: (a) an obligation whenever the farmer, trader or related business sells any of the propeny, orreceives any money in respect of any asset, comprised in the charge, fonh: with to pay to the holder the amount of the proceeds oi' the sale or the money so received, except to such extent a� the cnarge othe1wise provides or the holder otherwise allows, and· any sum so paid shall be applied, excejlt·so far as otherwise agreed by the holder, in or towards the discharge ofmoneys 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 wnich ne re­ ceived lo�ns or advances of inputs or other items required for cultivation but shall deliverto the holder the agricultural commodity in the amount agreed in the charge: (b) an·ob!igation, in the event of the farmer, trader or related business receiving any money under an)' �policy of insurance on any or the propeny 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 al­ . be ai)piied, except so far lows, and any sum so paid shall as,is otherwise agreed by the holder, in or towards the rlischarge of moneys arid liabilities secured by the charge. (4) Wh�re any money is due to. a farmer, trader or related · business, as the case may he, under any policy of insurance on any of the propeny comprised Irr a fixed· charge, the insurer may, notwithstanding anything contained in the policy insurance,. pay such. money to the holder of the charge to the extent of the said charge, and any such payment .shall be a valid discharge of the Agricultura/Credir [No. 23 of 199·5 239 / Effcc1 of floating charge " ' i ', ,· liability of the insurerto the farmer, traderor 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 i t had been paid to the holder by the farrner; trader or related business, as the case may be. (5) Subject IC.' compliance with the. obligations imposed by subsection (3) a fixed charge shall not prevent the farrner, related business or trader selling any of the property su);Jject to the charge. (6) Where the proceeds of a sale made under subsection (2), are paid to any person other that a person contemplated by or tinder.that' subsection, the holder shall have a right to recover the ·proceeds from such person if the holder proves that such person knew that the proceeds were paid to him in breach of the farmer'.s, related business's or trader's obligations.

5. An agricultural charge creating a floating charge shall have the like effect',as i f th_e charge had been created by a registered debenture issued by a company: -�i ,• Provided that,;.. ' ( a) the charge shall bec?.me a Ii xed charge on the property upon- (i) a receiving orcterin bankruptcy being made against the farmer, trader or related business; '(ii) the death of the farmer or trader; (iii) the dissolutio_n of partnership in the case where . the property charged is· partnership property; or (iv) notice in writing to thareffect being given by the holder on the happening of any event which, by virtue of the charge, confers upon the holder the right Lo give such notice; and 'b) the farrner, trader or related business, while the agricul­ turalcharge remains a floating charge, shall besubjecuo the like obligation as in the case of'a fixed charge to pay over to the holder the amount received by qim byway of proceeds of sale, in respect ofolher agricultural assets or additional i1sscts under pol icics of insurance, or by way of compensation: Provided that it shall not be necessary for- a farmer; trader or related business to comply with such obligations if and so rar as the amount so received is expended in the purchase of farrning sto_ck which, on purchase; becomes subject 10 the charge. 240 No. 23 of 1995) Agricul111ra/, C redil NoLicc of agricultural charge

6. ( l) N otwi U1stand i ng sections three,f aur and.five, any fanner, trader or related business shall, when selling or causing to be sold, any fanning stock or additional asset \\'.hi.c_h is�ubject to an agricul­ tural charge, give to the pcrson·buying;b, the person effecting the ,ale of, the fanning stock or ,idditibnal.asset, before paymen·t of the purchase price, a written notice l\ihich shall.be acknowl<;dged by the purchasers or the person effecting the sale signing the original and a copy of the notice, containing the following infonnatfon: · (a) the name and address of all persons holding an agricultural charge over tlic fannii1g stbek or add_i_1ional assets to be sold; (bJ the priority of the agricullural charges; and (c) the amount secured by each·agricultural 9harge. i. (2) When a fanner, trader or-related business gives written notice to any person under subsection (1), the wriften notic� shall consti­ tute written notice, in respect of any subsequent sale. of any agricultural commodity which is the subject of the charge, given to that �erson .. within a perioct of twelve months from the date of the written notice: Provided that the f;lnner, trade_r or related pusiness, before making, or causing to be.made, any subsequent.sale, shall notify that person or ,iny :1griculluraj charge, which affect the agricu_ltural commodity, created by the fanner, trader or related business aflerthedate of of the written noiice: and such notice shail state the name and address of the holder of the charge, the priority of the charge and tlie amount secured by the·charge. , , {3) A notice given ·under the proviso to subsection (2) shall, for lh<:'purposcs of this section, be treated as fcinning part oflhc written notice given under subsection (l'} by the fanner trader or related business to:the buyer .or pcrsrni .effecting a ·sale on behalf of 1hc fa11T1er,.1rader or related business,. as the case may be. ·(4) Ally person who receives a (1/ritfen notice under subsection {I) shall paYllic proceeds of the sale lo Lhe holders of the agricul lur'al cliargcs in accordance with Lhc wrillen notiQe and having regard to tire priority and amoums stated in the written notice and shall pay lhc surplus, i ( any, remaining after making the payments, to the · fa!l1ller, tradcn1r related business. (SJ Any person who cm1£r.wcncs subsection (4) shall be guilty of an offern:c itild: sh,1!! �Ii! ii:tbff:°, on conviction, 10 the full value of the agrit.-ulnt1i:il d'largc 11� sp�dlicd in the notice. I . I . I ., . i I: i I ' I I I A11ricu/t11ral Credit [No. 23 of 1 995 241 (6) Any moneys paid out in accordance with subsection (4) shall reduce the liability of the farmer, tradcror rcl�rcd business under the agricultural charges created by the fanncr, tradcror related business, in orderof thcir priority, and the amount of each agricultural charge shal l he 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 rel ated .business, as th" case may be, from any claim, howsoever arising, in respect of the proceeds of the sale. (8) Any farmer, Lrnderorrelaicd business who fails to give written notice in accordance with this section shall be guilty of an offence and shall be liable, on conviction, Lo a line nol exceeding ten percent of the outstanding loan.

7. (I) An agricultural charge shall have effect notwithstanding · . Supplcmcn­ anything contained in the Bills of Sale Acts, 1 878 and 1 882, of the �":.;visions a., United Kingdom; and an agriculturnl charge sl1al I not be deemed to be a bill of sale wiihin the meaning of those Acts. 10 ugricul• rural charges (2) Agricultural charges shall, in rel:uicm Lo one another, have priority in accordance with Lh.c Limes al which they are respectively registered under this Act: "rovided that any agricultural charge created· solely t9 secure the payment of insurance prcm iums upon farming stock shall have 'priority over any other agricullural charge not created for such purpose. (3) When a_n agricultural charge cr�>iling a floating charge has been created, �n agric\!llural charge purporting lo ere.ate a fixed charge on any of the property comptiscd in the floating charge shall, as respects the property subject to such floating charge, be of no effect so long as the floating charge remains in force. (4) Afler the CO!llmencement of this Act, where a farmer, trader or related business mortgages interest in land, and such famier, trader or related business creates an agricultural c_harge whicl· includes growing crops, the rights of the holder under such charge shall have priority civer those of the mo11gagce, whether i n possess sion or not,-and irrespccti,vc of the dmcs of the mortgage and'the charge. (5) Farming stock which is subject to m1 agticullural charge shall o1ot, for the purposes of the Bank ruptcy Act,' be considered as deemed to be goods in the the possession, cmlcror disposition ofthe farmer, trader or related business in IJis trndc or business, by the consent and pcnnission of the true owner thereof," under sue)! circumstances that he is the reputed owner thereof'. C:ap. 190 i' i' ii ' I I : t I I I ' ·' : l : ' ' . I ' I , ' I 1 ' 242 No. 23 of 1995 I Agricultural Credit (6) An agricultural charge shall not protect property which, but for such charge, would have been l iable to distress for rent or rates. RcgisLralion of agricul­ luraJ charges

8. (1) Every agricultural charge shall be registered within thi rty days afler its execution and i r not so registered, shall be void as against any person other than the fanner: Provided that the Rcgistnir may, on proof that omission to reg·istcrwilhin such time as aforesaid was accidental or due to inadvertence, ext.end the lime for registration on such tenms as he thinks lit. (2) An agricultural charge sl1all be effected by sending by post or delivering to tlic Registrar's flflice located in the district, or, where no· such office exists, to such other -office as the Minister shall, by statutory notice, spcci fy, :uncmoranol!m ofthe instrument creating the charge and such paiti)Julars of the charge as may be prescribcq, together with the prescribed fee; anq upon receipt thereof the Registrar shall enter the particulars in the regist.er and lile the memorandum. (3') The register kept and tile memoranda filed undei-this section shall, at all reasonable -limes, be open Lo inspection by any perspn on payment of the· prescribed fee, and any person inspecting the register or a:i}' memorandum may, on payment of the prescribed fee, make copies or extracts therefrom. (4) Any person may, on paymelll ofthe prescribed fee, require to be furnished with a copyofany cmry in the register or memorandum certified to be a true.copy by the Registrar. (5) Registration or an ag:1icu l1ural charge may b<,.proved by Lhc production of a ce11i lied copy of the entry i n the register relating 10 the charge, and a copy of any such entry purporting to be certified as a 1111c copy by the Registrar shall, in all legal •pmceedings, be evidence of the maue·rs slated llicrein without proofof,1he·signature or a_uthprily of the person signing it unless the contrary is proved. (6) The Registrar shall not be liable to any action o r proceeding for o r in respect of any act or minter done or omitted 10 be done, in good faith, in the exercise or purported exercise of th_e powers conferred on the Regist rar unaer this Act (7) Any person aggrievii-d b)' .iny decision of the Registrar may appeal 10 the High Cou11 )'Ji thin thirty days of such decision .. · (8) R,egistr:uion of an agiicuhunil charge underthis section shall, from the date of regis1rmion, be deemed to be const!tute actual notice ofthe·chargc antl of tile fact of such-registration to all pe_rsons and for all purposes connected witlrthe property comprised in the charge: · , � Agricu/mral Credit (No. 23 of 1995 243 Provided that- (a) where an agricultural charge is expressly made for secur­ ing a current account or further advances, the hoJct·er, in relation to making further advances undenhe charge, shall not be deemed to have notice of another agricul­ tural 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 las.t search; if any, by or on behalf of the holder was mude, whichever was the later; (b) registration shall not be deemed to constitute actual notice to a pul"Chascr for the purposes of section six. (9) The Minister may, by statutory notice, exempt any person from the. payment of any fee required ·under this section.

9. (1) Except as otherwise provided under this Act, no person shall print for publication or publish any list of agricultural charges or of the name of any farmer, trader or related business who have created agricullurnl charges. • Rcstriciion on publica­ tion of agricultural charges I\ I'. (2) Any person who contravenes the provisions of subsection (1), shall be guilty of an offence and shall be liable; on conviction, to a fine nm exceeding one thousand penalty uriits. (3) No prosecution for an offence under this section shall ba­ commenced without the consent of !heDirector of Public Prosecu­ tions.

10. (1) Any farmer, traderor related business who has created an Frauds . agricultural charge and who, wit1i intcn1 to defraud- ( a) fails to comply with the obligations imposed by this Act as to the payment to th_e holder of any sums received by the farmer, trader orrel.ited 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. (b) removes or suffers to be removed ·,my-property subject to the charge; shall be guilty of an offence and shall be liable; on conviction, to a fine not exceeding one thousand penalty units or to imprisonment for a· period not exceeding three years, or to boll1. .. (2) Where any related l)usiness, with.intent to defraud, misrepre- sents its rights and obligations underthis Act or in ,my way deprives a farmer of his rights under this Act, the directors and managers of . ·• ' . . � ', , ' , , 244 No. 23 of J 995] Agricultural Credit the business committing such violation shall be guilty of an offence and shall be liable, on conviction, to a fine not -exceeding one thousand penalty units or to imprisonment for a period not exceed­ ing three years, or to both, uriJess they show that the offance was committed without their knowledge or consent. PART III V AUDITY OF CONTRACT,S FOR ADVANCES ON INPUTS AND 0TlffiR ITEMS Validity of contracts J 1. (I) A contract for the advancement to a farmer of inputs or other items required for cultivation shall state- ( 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 the farmer will be required to pay 'if the farmer c'.oes not pay or deliver the produce _ at the price agreed on, as stipulated in the contra�t, unless subsection (1) or section six applies. (2) Any trader or related business advancing any inputs orother items required for culti.vation shall furnish the farmer, at the time each input or ,iem 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) No direct or indirect compounding ofinterestshall be alJowed as part of the contract specified under subsection (!). . , (4) Notwithstanding any other law, any person whQ 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 cc,tract, and such charge shall be void. Failing co make full disclosure of cost or inputs or other items and interest; etc. •

12. Any person who advances inputs or other items required for cultivation to a farmer and fails to fully disclose to the farmer the cost of any input or item, the interest to be paid by the farmer, and any charges, fees or penalties, as required under section eleven, shall be guilty of an offence and shall be liable, on conviction, to a fine not exceeding one thousand penalty units • m ] ,l ' ( ' . I ' I i i 1 1 I I I , ' ' ' . I . ' / !j ' : ! I ·...__,.- •, Agricultural Cre,;iit [No. 23 of'l995 . 145 PART IV GENF.RAL

13. The Arbitration Act shall apply to the settlerrient of any Arbiiration dispute arising as-a result ofthe interpretation or application of the provisions of this Act. · Cap. 180

14. The Minister may, by statutory instrument, make regu)a- Regulations tions prescribing anything which under this Act is rajuired ·or pennilted to be prescribed, and, without prejudice !O the g.�nera)ity of the ·foregoing ma:y make regufalions prescribing- ( a) the manner in which a register is to be kept; (b) for thc filling of memoranda and agricultural charges; (c) for the removal of entries from the rel!ister on proof of discharge; ( d) the rectification of the register; and ( e) for the form of a written notice or agricultural cha_rge to be issued under this A.ct.

15. (I) Subject to subsection (2), the Agriculture Credits Act, R•P!'•l or Cap. 349 · 1962, is hereby ,epealcd. (2) Notwithstanding the repeal of_the Agriculture Credits Act-- ( a) any agreement executed under_ that Act shall contintte in force as if made under this Act; cb) any registration done, any other right or benefit accruing or any liabilities s11ffered under that Act shall, unless contrary to this Act, continue iii accorµance with this Act; ( cJ any regulatio.ns maae or directions given under that·Act _ shall, unless cmitrary to t(lis Act, continue in force until -revoked, as if made or given under this Act. i I