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Producer Organisations Act (Cap. 447) Consolidated

CHAPTER 447

PRODUCER ORGANISATIONS ACT

To provide for the creation of Producer Organisations in the

Agricultural and Fisheries sectors.

6th January, 2003

ACT IX of 2002, as amended by Legal Notices 426 of 2007 and 346 of

2008.

PART I
Preliminary

1. The short title of this Act is the Producer Organisations

Act.

2. In this Act, unless the context otherwise requires -

''action plan'' means an approved plan by a producer organisation to meet the criteria for recognition in accordance with regulations made under article 19;
''Director'' means the Director of Agriculture or the Director of Fisheries, as the case may require, and includes, to the extent of the authority given, any officer authorised by the Director, in writing, to act in that behalf for any of the purposes of this Act;
''interbra n c h associat ion'' means a n asso ciati on made u p o f representatives of economic activities linked to the production, the t r adin g i n and th e p r ocessi ng of t h e pr odu ct , and may in cl ude representatives of any one or more of such economic activities;
''marketed production'' means the products of members of the producer organisation marketed through the organisation;
''market withdrawal'' means the withdrawal from the market of products covered by an operational programme; and ''withdrawal from the market'' shall be construed accordingly;
''measure'' means a group of related actions which together meet one or more of the objectives under the operational programme;
''m embe r'' means a person who, toge th er with othe r persons, forms, creates or joins a producer organisation;
''Minister'' means the Minister responsible for agriculture and fisheries;
''op erational fund'' m eans th e produ cer organi satio n acco unt, based on producer contributions and Government funding, which is used solely to finance operational programmes, action plans and market withdrawals;
''operational programme'' means an approved plan by a producer organisation to improve performance of the organisation over time p a r ticul arl y i n t e rms of mark et ing , pro duct quali ty an d environmental conditions;

Short title. Interpretation.

''producer'' means any person who is involved in the trade of tilling land or tending live stock, or engaged in the fishing industry;
''producer organisation'' means an organisation, recognised by the Direct o r, being a voluntary legally constituted body of produ cers of p a rticul ar products o r of person s en gaged i n the agricultural and, or fishing industries, acting together to produce, harvest, store, package and, or market their products;
''p rod u cer organi sat i on no n-mem b er'' m eans produ cers w h o produce products covered by regulations made under article 19, but who are not members of any producer organisation;
''product'' means the type of agricultural produce and, or fishery products, co vered by regu lati ons made und er article 19; and
''production'' shall be construed accordingly.
PART II

Establishment of producer organisations.

Functions and aims of producer organisations.

Recognition of producer organisations.

Membership of producer organisations.

Constitution of Producer Organisations

3. (1) Producer organisations which are recognized by the Director in accordance with the provisions of regulations made under article 19 shall have a distinct legal personality from that of their members.

(2) Producers, whose products fall under any of the categories as may, from time to time, b e prescribed by the Mini ster in regul atio ns m a de und er arti cle 1 9 , m a y form a prod ucer organisation.
4. The functions and aims of a producer organisation shall be: (a) to take such measures as will ensure that its members’
production will be as market-orientated as possible;
(b) to promote the placing on the market of the products produced by its members; and
(c) to promote production techniques which are environmentally sound and along rational lines.

5. A producer organisation shall only be recognised for the purposes of this Act if, after it applies for recogni tion to th e Director in accordance with the provisions of this Act, it satisfies the requirements laid down in regulations made under article 19.

6. (1) Members of producer organisations shall abide by the rules of the organisation of which they are members, and shall -

(a) apply the rules adopted by the producer organisation relating to production reporting, the production itself, marketing and protection of the environment;
(b) belong to only one of the producer organisations in respect of each product, but may belong to various organisations as long as the relative organisations do not market similar products;
(c) subject to the provisions of subarticle (2), market the entire production of their produce through the producer organisation; and
(d) pay such financial contributions provided for in the rules of the producer organisation for the establishment and replenishment of the operational fund provided for in article 9.
(2) Where the producer organisation so authorizes, and in co mpli ance with the term s and condi tions it lays down , t h e members may -
(a) sell part of their production directly to consumers;
(b) market, through any other producer organisation or any other marketing channel, designated by their producer organisation, quantities of products which are marginal in relation to the volumes marketed by their organisation;
(c) market, through another producer organisation or any other marketing channel, designated by their producer organisation, products which, because of their characteristics, are not normally covered by the commercial activities of the organisation concerned; and
(d) in accordance with the procedure laid down by the Director by way of derogation, be authorised only for limited periods and on a gradually reducing scale, and with respect to particular products, to conclude direct contracts with processing undertakings.

7. (1) It shall be the duty of the Director to -

(a) decide whether to grant recognition to a producer organisation within three months of the lodging of an application together with all supporting documents that may be required;
(b) regularly carry out checks to ascertain that producer organisations comply with the requirements for recognition, and are functioning in accordance with the approved operational programme, carry out a proper audit of operational funds, and, in the event of non-compliance, to impose the prescribed penalties and, or, to withdraw recognition;
(c) notify the Minister, within two months of every decision to grant, refuse or withdraw recognition.
(2) Without prejudice to any other action competent to the Director under this or any other law, failure by an organisation to function in accordance with an approved operational programme or to submit its books for inspection and verification and to allow an audit thereof provided for in this article, shall render the officers of the organisation liable to such administrative penalties and fines as may be prescribed.

Duties of Director.

PART III

Operation of producer organisations.

Operation of Producer Organisations

8. (1) Producer organisations shall be governed by such regulations as may be prescribed under article 19 and shall be run in accordance with the opera tio nal programme referred to in subarticle (2).

(2) Producer organisations shall submit, for approval by the Director, operational programmes whenever required to do so by the Director, and no changes to such operational programmes shall become effe ctiv e without th e prio r approval, in writing, of the Director.
(3) The Director shall signify his consent or otherwise to a change in an operational programme within three months of the submission, by the producer organisation concerned, of the request for such change.

Operational fund. 9. (1) Producer organisations setting up an operational fund may apply to the Director, in accordance with the provisions of this Act, for financial assistance.

(2) The operational fund referred to in subarticle (1) may be applied, by producer organisations, for the financing of market with drawals only where the operational pro g ramme has been approved by the Director in accordance with article 8(2).
(3) The Minister may make regulations establishing the con d itio ns under which pro ducts covered by an operat i onal programme may be withdrawn from the market, and the manner in which products so withdrawn may be disposed of.

Promotion and competitiveness of products.

Recognition of interbranch associations.

10. The Director shall take such measures as he may deem app r opr iate to pro m ote an d im pro v e the com p etit iveness of products listed in regulations made under this Act and intended to be placed on the market by producer organisations.

PART IV
Interbranch Associations

11. (1) Interbranch associations which are recognised by the Director in accordance with the provisions of regulations made under article 19 shall have a distinct legal personality from that of their members.

(2) The Director shall, in accordance with regulations made under article 19 -
(a) decide whether to grant recognition to an interbranch association, within three months of the lodging of an application together with all relevant supporting documents, as specified in the said regulations;
(b) carry out checks at regular intervals to ensure that interbranch associations meet the terms and conditions for recognition;
(c) withdraw recognition if -
specified in regulations referred to in this article are no longer met; or
(ii) the interbranch association contravenes or fails to comply with any other regulation prescribed under this Act;
(d) notify the Minister, within two months, of any decision to grant, refuse or withdraw recognition.
(3) Without prejudice to any other action competent to the Director under this or any ot her l aw, failure by an interbranch association to function in accordance with the provisions of this Act or of any regulations made thereunder, shall render the officers of th e i n ter b r a nch associ ati o n li abl e to suc h ad mi ni stra tiv e penalties and fines as may be prescribed.
PART V
General

12. (1) The Director shall, every year, forward to the Minister an annual report on the activities of producer organisations and interbranch associations.

(2) The Director shall, once a year, publish in the Gazette a list of registered producer organisations and interbranch associations; the Director shall also publish in the Gazette any withdrawals of recognition of producer organisations and interbranch associations, as well as lists of products, if any, withdrawn from the market at any particular time or times during th e th ree m onth period immediately preceding such publication.

13. (1) Producer organisations may allow producers, who are not members of producer organisations, if the latter so request, to withdraw products from the market under such conditions as may be prescribed:

Provided that the withdrawal compensation, if any, which may be payabl e to su ch pro ducer s, in the form of fi nancial assistance payable by the Director, shall be reduced by a maximum of ten per centum of the compensation payable to members of the producer organisation, and provided also that the amount paid shall take account of the ove rall wi thdrawal costs borne by such producers:
Provided further that compensation shall not be granted where the amount of products withdrawn from the market is higher t h an t h e p e rcent a g e , as th e Di recto r may fro m t ime to t ime establish, of the tot al am ount of the pro duct which would have otherwise been marketed by the producer.
(2) Producer organisations shall keep the Director informed of any measures taken in accordance with the provisions of subarticle (1).

14. (1) The Director shall authorise the payment, out of the operational fund, of the withdrawal compensation, which shall be fixed in accordance with such regulations as may be prescribed

Annual report.

Extension of benefits.

Payment of compensation.

Disposal of products.

u n d e r art i cl e 19 , t o prod uc er or g a ni sat i o n s or in terbran c h associations which have withdrawn products from the market in accordance with the provisions of this Act or any regulations made thereunder.
(2) The Director may, in such circumstances as he may deem appropriate, authorise the payment of the withdrawal compensation even where the amount of products withdrawn from the market exceeds the limit, which may have been set by the Director at the b eg inni ng of th e year, to prev ent i mbalances in wit hdraw al s of p r od uct s fro m th e m a rket fo r t h e pa ym en t of wi th draw al compensation.
(3) Where producer organisations and interbranch associations are unable to direct withdrawn products to one of the destinations referred to in article 15, th e with dr awal compensation shall be granted only if the products are disposed of in accorda nce with such instructions as the Director may give.

15. Products which are withdrawn form the market in accordance with the provisions of this Act or of regulations made thereunder shall be disposed of in any of the following methods, as shall be determined by the Director:

(a) free distribution to charitable organisations;
(b) free distribution to penal institutions, hospitals and old people’s homes;
(c) use for non-food purposes; or
(d) use in animal feeds, either in their fresh state or after processing by the feeding stuffs industry.

Spot checks. 16. Without prejudice to any other action which the Director may take under any of the provisions of this Act, the Director may carr y out sp ot checks t o en sure the pro p er ap pl icatio n an d implementation of the provisions of this Act, or of any regulations made thereunder, by the members of the producer organisations and of the interbranch associations.

Inspectors. 17. (1) The Director shall designate such number of his officers as inspectors for each sector, as he may deem fit, who shall be persons with suitable qualifications, technical knowledge and experience to take part in such inspections, as may be required in order to ensure that producer or ganisations and in terbran c h associations are acting in conformity with the provisions of this Act, or any regulations made thereunder.

(2) The inspectors shall, in the course of such inspections, follow such instructions as may be given by the Director under this Act, as regards the manner, duration and method of the inspections carried out, and shall be bound by the rules of professional secrecy.

Producer Organisations Appeals Board.

18. (1) There shall be a Board, which shall have such number of divisions as the Minister may by order in the Gazette prescribe, to be k now n as the P r od ucer Or ganisati on s Ap peal s Board, hereinafter referred to as ''the Board'', consisting of the Auditor G e neral o r his rep r esent a ti ve, wh o sh all preside, two person s nominated by National Audit Office, and two other persons who are conversant with matt ers relating to pr od uc er organisati on s and

President acting on the advice of the Minister. Saving t h e provisions of subarticle (2), the Minister may make regulations to regulate the distribution by types of appeals amongst the divisions of the Board, provided that such distribution shall not be specific to a geographical area and that no two divisions of the Board shall deal with the same type of appeals.
(2) A member of the Board shall be disqualified from hearing an appeal in such circum stances as would disqualify a judge in t e rms of Su b-Ti tle II of Titl e II of Bo ok Third of t h e Code of Organization and Civil Procedure; and in any such case the member shall be substituted by another person either appointed for the purpose by the President acting on the advice of the Minister; or the appeal, when there is more than one division of the Board in office, may be referred by order of the Board from one division of the Board to another.
(3) The members of the Board shall hold office for a period of three years, and shall be eligible for re-appointment.
(4) A member of the Board may be removed from office by the President acting on the advice of the Minister, on grounds of gross negligence, conflict of interest, incompetence, or acts or omissions unbecoming a member of the Board.
(5) The Board shall have jurisdiction to hear and determine all appeal s m a de by a p e rson ag grieved by an y d ecisi on of th e Director, relating to the grant, refusal or withdrawal of recognition of a producer organisation or of an interbranch association, or the refusal by the Director of the payment of compensation withdrawal.
(6) The decisions of the Board shall be final except with respect to points of law decided by the Board from which an appeal shall lie to the Court of Appeal (Inferior Jurisdiction).
(7) The Board may require any department or agency of the Government to provide the Board with such information or advice as the Board may deem necessary for the proper execution of its functions.
(8) Appeals to the Court of Appeal (Inferior Jurisdiction) from decisions of the Board as provided in subarticle (6) shall be made within ten days from the day of the decision; and such appeals shall be regulated by rules of court made under article 29 of the Code of Organization and Civil Procedure.
18A. The Board shall respect and apply the principles of good adm i ni strativ e b e havi our l a id do wn in art i cl e 3 of th e Administrative Justice Act.

19. (1) The Minister may make regulations for the better carrying out of the provisions of this Act.

(2) Without prejudice to the generality of subarticle (1), the regulations may make provision for:
(a) the criteria to be used for the recognition of producer

Cap. 12.

Cap. 12. Observance of the

principles of good

administrative

behaviour.

Added by:

L.N. 346 of 2008.

Cap. 490.

Regulations.

Amended by:

L.N. 426 of 2007.

organisations and interbranch associations, including the minimum number of members and the minimum volume of marketable production required for recognition;
(b) the categories of products which qualify for the formation and the recognition of producer organisations and interbranch associations; and the categories of related trades which qualify for the formation and the recognition of interbranch associations;
(c) the conditions under which a producer organisation or an interbranch association shall be deemed to be representative of a sector or of a specific area;
(d) the rules governing the running and operation of producer organisations and interbranch associations;
(e) the information which producer organisations are expected to collect and forward upon demand and the provision for administrative penalties and fines, not exceeding two thousand and three hundred and twenty-nine euro and thirty-seven cents (2,329.37), in cases of unjustified delays or systematic negligence in the proper performance of these tasks;
(f) the contents of operational programmes, and the rules which govern the allocation of financial aid to operational funds;
(g) the proportion of the operational fund which may be used to finance market withdrawals;
(h) the procedure for the establishment, administration and inspections of producer organisations;
(i) the measures which may be taken by the Director to improve the competitiveness of products and their promotion;
(j) the determination of the withdrawal compensation payable for a particular product; and
(k) the administrative penalties and fines, not exceeding two thousand and three hundred and twenty-nine euro and thirty-seven cents (2,329.37), which may be imposed on producer organisations and, or interbranch associations which do not fulfil their undertakings or act in contravention of the provisions of this Act.