The concept of agrarian receipt in the legislation of Ukraine appeared in 2012 with the adoption of the relevant law on this financial instrument. However, the adoption of a specific act does not mean its actual implementation in practice.
Partly in practice, agrarian receipts began in 2015 by introducing a pilot project on the development of this technology.
Today, the mechanism for raising funds with the help of agrarian receipts does not work in all regions, but it is promised to provide for its implementation throughout Ukraine until the beginning of this spring season. Taking into account the prospect of such a method, its attractiveness for small and medium agribusiness, the national use of this document contributes to the development of the agro sphere and the whole economics of Ukraine as an agrarian country.
For example, in Brazil analog of agrarian receipts in the ’70-’80s helped to overcome the economic crisis.
Among the main advantages of agrarian receipts is a simplified procedure for processing the required documents, more loyal requirements for the subject of collateral (future agricultural products), as well as their transparency due to the existence of a special register.
Now, more about the essence, the order of issue and execution.
First, the agrarian receipt – a document that provides certain obligations. The obligation may be financial – payment of funds or commodity – the supply of property. In any case, such an obligation will be unconditional.
Before issuing receipts debtor and creditor enter into a contract. The creditor under the contract gives the debtor a certain amount of funds. The debtor issues the agrarian receipt, which fixes the unconditional and collateralized obligation.
There are no requirements for persons who can act as a creditor. Consequently, it can be any person, including an economic entity, regardless of the organizational and legal form.
The debtor must meet certain requirements. It should be a producer of agricultural products and have a land plot of agricultural purpose. Such a requirement follows from the mandatory indication of the cadastral number and details of the title documents in the text of the agrarian receipt.
The pledge is always the future harvest (made products), grown on this land. At the request of the creditor and with the consent of the parties, other movable or immovable property, as an additional mortgage, may be indicated on the receipt.
If the manufactured product is not enough to cover the debt, the next future harvest grown on this land plot becomes the pledge.
A person who grows several types of products must issue separate agrarian receipts for different types of goods, the indication of several types in one receipt is not allowed.
The type of receipt determines the method of its execution: the debtor supplies agricultural products (the parties indicate the type and quantity of which on the receipt) or pays cash.
There is no possibility to change the type of receipt (to transfer the financial to the commodity and vice versa) after its issuance. Such a situation, with the consent of the parties, can be settled through the execution of a receipt of one type and the issuance of a new one.
The agrarian order must be notarized and registered with the possibility to verify the credit history of a person. Details of the mortgage are additionally included in the Register of movable property.
After that, the creditor and the notary receive originals. The Debtor has the right to receive only a notarized copy.
Documents for the registration of the receipt include the title documents for the land plot where the cultivation of the products.
You can`t apply to any notary with the agrarian receipt for registration. First, you need to check whether the particular notary has acquired the status of the registrar of such receipts. A list of such notaries can be found on the web-portal of the State Company “Agrarian Registries” (http://agroregisters.com.ua/index.php).
The same website contains the Register of Agrarian Receipts. In the public of the Register, you can find information on the number of the receipt, its type, and date of the certificate, the debtor and the final date of execution. A search is available for the cadastral number, the number of the notary’s form or the number of the entry in the Register.
The creditor has the opportunity to transfer his rights to another person. The transmission is carried out with the help of a transfer inscription, which is notarized.
What to do if the debtor does not fulfill the obligation?
The law provides for the possibility of compulsory execution based on the notary executive inscription. The executive inscription gives the agrarian receipt status of the executive document, which executes according to the Law “On Enforcement Proceedings”.
Agricultural receipts for farmers and lenders are very attractive, primarily because of their flexibility, transparency and simplicity of execution, and collateral requirements.
Therefore, a new stage may soon begin in the field of farmers’ lending, where agricultural receipts will be the main means of financing.