The Legal Dos and Dont's for Agri-Tech Projects

Agri-tech projects can undoubtedly provide some welcome solutions to the farming industry and although many systems are in their infancy, we are seeing on-farm automation make a difference. However, that doesn’t mean to say agri-tech projects come without risk. In this article, Roythornes Solicitors’ Martin Jinks takes a closer look at the dos and don’ts when planning and undertaking an agri-tech project.

It would be naïve to think agri-tech can’t provide incredible benefits to the farming industry, given the examples already present across the world and the success of technology in other parts of the food supply chain – such as robotic systems in factory production lines. 

Challenges like labour shortages at harvest time, in-field food waste and product damage, plant diseases and forecasting of crop ripening, can all be managed far easier with the support of sophisticated technology. However, before increased efficiency and cost savings can be accessed, training and legal support are essential for a positive experience. 

The planning process with agri-tech projects is so important and a decision to utilise equipment of this nature is one that shouldn’t be made quickly or without the necessary preparation.

Firstly, it’s worth pointing out that an agri-tech fault will affect both the supplier and the farmer so it’s important the correct due diligence is carried out instead of relying on verbal assurances. Suppliers should develop a clear statement of what the farmer wants to achieve, as well as writing out their own proposal on how they believe their tech can help the purchaser. On both sides, it’s also pertinent to put in place a contract that would address any potential defaults. Don’t forget that funders will also often require formal contracts with suppliers, including collateral warranties in their favour as a condition of funding.

In terms of payment, a farming customer is well within their rights to hold off a substantial part of the payment until a final milestone is achieved, in addition, they can also request a comprehensive testing phase which will prove the equipment is ready to be put into use. If, for whatever reason, there are post-completion defects, the supplier should always be transparent with defect liability response times and competencies.

On the other hand, farmers should get written assurances from the supplier or their authorised contractors on the costs for spare parts, maintenance and call-out support. Similarly, where bespoke software is being supplied, be sure to check access arrangements to source codes in case of supplier failure.

It's often enticing for farmers to attempt to take on agri-tech projects in-house, without the necessary experience which is required to implement what can be complex technology. We would strongly advise against this. It’s far better to pay a small premium for the lead supplier to integrate all equipment into a working state with a performance guarantee, rather than buy components piecemeal and integrate them yourself, unless of course, you know what you are doing.

Mismanagement of agri-tech projects can have a hugely detrimental effect on both day-to-day operations and long-term plans. Examples of mismanagement could be suppliers running into technical difficulty, becoming insolvent and not completing a project where no performance bond is in place, incorrectly sized items creating unplanned bottlenecks in a system or inexperienced operational staff causing underperformance.

Regardless of what the aspect of mismanagement may be, they all have the same outcome – a great deal of wasted time and money. With these risks at play, we always recommend completing research on different systems and potential suppliers to narrow down which technology may work best in relation to current farming practices. 

The agri-tech sector is the UK’s 35^th fastest growing sector, with a turnover of almost £13bn, so there is plenty of reason for excitement and optimism. Despite the rapid growth of the sector, we are already experienced in providing legal support having been assisted in agri-tech projects involving anaerobic digestion plants, vertical farming facilities and crop storage for example.

Through all stages of an agri-tech project – including initial discussions on options, proposals, contracts, installation, testing, software licensing agreements, funding and dispute management – there is an option for legal support almost wherever a farmer may need it.

For more information about Roythornes’ agricultural law expertise, visit www.roythorne.co.uk/site/sectors/agriculture-lawyers-solicitors/

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