PRODUCER ORGANISATIONS _g CAP. 447.  1
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.
PART I
Preliminary
Short title.
Act.
Interpretation.
''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; 
''interbranch association'' means an association made up of
representatives of economic activities linked to the production, the
trading in and the processing of the product, and may include
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;
''member'' means a person who, together with other persons,
forms, creates or joins a producer organisation; 
''Minister'' means the Minister responsible for agriculture and
fisheries;
''operational fund'' means the producer organisation account,
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
particularly in terms of marketing, product quality and
environmental conditions;
''producer'' means any person who is involved in the trade of
2 _g CAP. 447. PRODUCER ORGANISATIONS
tilling land or tending live stock, or engaged in the fishing industry;
''producer organisation'' means an organisation, recognised by
the Director, being a voluntary legally constituted body of
producers of particular products or of persons engaged in the
agricultural and, or fishing industries, acting together to produce,
harvest, store, package and, or market their products;
''producer organisation non-member'' means producers who
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, covered by regulations made under article 19; and
''production'' shall be construed accordingly. 
PART II 
Constitution of Producer Organisations
Establishment 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, be prescribed by the Minister in
regulations made under article 19, may form a producer
organisation.
Functions and aims 
of producer 
organisations.
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.
Recognition of 
producer 
organisations.
5. A producer organisation shall only be recognised for the
purposes of this Act if, after it applies for recognition to the
Director in accordance with the provisions of this Act, it satisfies
the requirements laid down in regulations made under article 19.
Membership of 
producer 
organisations.
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
PRODUCER ORGANISATIONS _g CAP. 447.  3
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
compliance with the terms and conditions it lays down, the
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.
Duties of Director.
( 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.
4 _g CAP. 447. PRODUCER ORGANISATIONS
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 operational 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 effective without the prior 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
withdrawals only where the operational programme has been
approved by the Director in accordance with article 8(2).
(3) The Minister may make regulations establishing the
conditions under which products covered by an operational
programme may be withdrawn from the market, and the manner in
which products so withdrawn may be disposed of.
Promotion and 
competitiveness of 
products.
10. The Director shall take such measures as he may deem
appropriate to promote and improve the competitiveness of
products listed in regulations made under this Act and intended to
be placed on the market by producer organisations.
PART IV
Interbranch Associations
Recognition of 
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 -
PRODUCER ORGANISATIONS _g CAP. 447.  5
(i) the terms and conditions for recognition
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 other law, 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 the interbranch association liable to such administrative
penalties and fines as may be prescribed.
PART V
General
Annual report.
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 the three month period
immediately preceding such publication.
Extension of 
benefits.
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 payable to such producers, in the form of financial
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 overall withdrawal costs borne by such
producers:
Provided further that compensation shall not be granted
where the amount of products withdrawn from the market is higher
than the percentage, as the Director may from time to time
establish, of the total amount of the product 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).
Payment of 
compensation.
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
6 _g CAP. 447. PRODUCER ORGANISATIONS
under article 19, to producer organisations or interbranch
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
beginning of the year, to prevent imbalances in withdrawals of
products from the market for the payment of withdrawal
compensation.
(3) Where producer organisations and interbranch associations
are unable to direct withdrawn products to one of the destinations
referred to in article 15, the withdrawal compensation shall be
granted only if the products are disposed of in accordance with
such instructions as the Director may give.
Disposal of 
products.
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
carry out spot checks to ensure the proper application and
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 organisations and interbranch
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 known as the Producer Organisations Appeals Board,
hereinafter referred to as ''the Board'', consisting of the Auditor
General or his representative, who shall preside, two persons
nominated by National Audit Office, and two other persons who are
conversant with matters relating to producer organisations and
PRODUCER ORGANISATIONS _g CAP. 447.  7
interbranch associations, each of whom shall be appointed by the
President acting on the advice of the Minister. Saving the
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.
Cap. 12.
(2) A member of the Board shall be disqualified from hearing
an appeal in such circumstances as would disqualify a judge in
terms of Sub-Title II of Title II of Book Third of the 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
appeals made by a person aggrieved by any decision of the
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.
Cap. 12.
(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
Organisation and Civil Procedure.
Regulations.
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
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
8 _g CAP. 447. PRODUCER ORGANISATIONS
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 one thousand liri, 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
one thousand liri, 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.
