| (1) |
A co-operative retains ownership in respect of any debt owed to it by a farmer or member if the debt arises from any transactions related to farming or agricultural purposes, including the provision of the following: |
fuel, spare parts, fertilisers, plants materials, agricultural remedies, packing materials, livestock, feeding stuff, fumigating, spraying or cleansing operations or repair services, electricity, or money advanced for purposes of production.
| (2) |
If a co-operative gives assistance to a farmer or member- |
| (a) |
the products produced or acquired by the farmer or member are deemed to be pledged to the co-operative as if they were delivered to the co-operative, under the principles applicable in the law of pledge in the Republic; and |
| (b) |
the farmer or member is prohibited from selling the products referred to in paragraph (a) or using them as security to a third party without the written consent of the co-operative. |
| (3) |
A farmer or member of the co-operative referred to in sub-item (2) is required by a co-operative to indicate the following: |
| (a) |
The agricultural products deemed to be pledged; |
| (b) |
the land on which the products deemed to be pledged are being produced; |
| (c) |
the exact location of the livestock which is the subject of the deemed pledge; |
| (d) |
whether the products and livestock referred to in paragraphs (b) and (c) are pledged; |
| (e) |
names of other co-operatives of which the member or farmer is a member; and |
| (f) |
the extent of the debt of the member or farmer to other co-operatives and other third parties. |
| (4) |
If products cannot be found on inspection by the co-operative or its representative, the farmer or member will be required to explain the whereabouts of the products. |
| (5) |
If products or livestock of the member or farmer are pledged to more than one co-operative— |
| (a) |
the products or livestock is deemed to be pledged to the co-operatives jointly to the extent of the indebtedness of the farmer or member; |
| (b) |
the co-operatives must share the proceeds of the products or livestock proportionate to their claims irrespective of which co-operative has possession of them; and |
| (c) |
an affected co-operative must send notice to the other affected co-operatives disclosing its interest and proof of its claim. |
| (6) |
If a farmer or member requests finance for the purposes of fanning operations from a third party- |
| (a) |
the third party and the farmer or member must ask a co-operative which has a deemed pledge over the products of the member or farmer to waive its rights; and |
| (b) |
a co-operative may not refuse the request unless the estimated value of the products on the farm is insufficient to cover its debts and those of the third party. |
| (7) |
If a co-operative agrees to waive its rights in terms of sub-item (6), the third party may only sell in execution, pursuant to a court order, agricultural products or livestock with the written consent of the co-operative and thereafter pay to the co-operative what is due to it. |
| (8) |
A co-operative may refuse to give permission for a sale in execution referred to in sub-item (7) if it is of the view that the sale in execution will prejudice its claim for the debt owing and secured by the deemed pledge. |
| (a) |
If there is a dispute regarding the estimated value of products, the insurer of products must be requested to evaluate. |
| (b) |
The value given by the insurer is final and binding to all parties. |
| (c) |
The request and valuation referred to in paragraph (a) must be completed within seven working days. |
| (10) |
A farmer or member may use the products referred to in this item for his or her consumption with his or her workers and family in an appropriate manner. |
| (11) |
Anyone who contravenes sub-items (2)(b) or (3) is guilty of an offence. |
Housing Development Agency Act, 2008
