SITA creates a manual on contract preparation and execution, to support agribusinesses diversifying into exportable crops

Agriculture is the backbone of Africa’s economies, with more than 70% of African’s dependent on agriculture and allied sectors. Therefore, strengthening the Agriculture sector is essential for the continent’s Sustainable Development. 

East Africa has had a need for self-sufficiency in staple crops, which has encouraged many farmers to grow maize and paddy. Technologies that led to a green revolution in the developed world are now being implemented in Africa, leading to improvements in the productivity of staple crops. However, East Africa has an increasing need to diversify into commercial and exportable crops, such as pulses and oilseeds, which can bring additional income to famers and agribusiness.  

There is a niche group of East African SMEs who are ready to diversify into pulses and oilseeds and explore the global market (some of whom already have). However, they face some barriers. 

Traditionally, the export-import business was controlled by traders from destination markets, leaving exporters in origin markets with low margins or even losses. Advances in communication technology have made information more accessible, equipping African agribusiness in agriculture with much-needed information to prepare themselves for export. However, while more and more SMEs are venturing into exports, many still do not have full knowledge of international commodity trade flows, contract preparation, execution and related protocols which can enable them to overcome the entry barriers to trade.  

To support SMEs in overcoming these challenges, SITA has created a manual on contract preparation and execution. The manual aims to: 

• Help farmers, SMEs and exporters of pulses and oilseeds in East Africa to understand the technical aspects, associated risks and risk mitigation strategies in international trade through proper contract preparation and execution.  
• Act as a ready reckoner on the terminology used in international trade and the various contract formats. 

SITA also conducted a training for East African SMEs and exporters on Forward Contract Preparation and Execution, with a special emphasis on Grain and Feed Trade Association (GAFTA) rules and regulations. Feedback from this training guided the creation of the manual. 

If you are an East African agribusiness or business support organisation wanting to learn more about contract preparation, you can download the manual here.