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Technology and robotics are seen as one of the solutions to some of the stresses in the food supply chain. Robotic systems have been in factory production lines for a number of years – reducing labour costs, increasing productivity and bringing a reliability to product quality for manufacturers.
The agricultural and horticultural sector has similar issues – labour shortages at harvest time, in-field food waste and product damage, plant diseases and forecasting of crop ripening being some of the key challenges faced by todays’ fresh produce growers. Technology can help to provide a solution, and whilst some of the systems are in early stages, we are already seeing on-farm automation making a difference.
But agri-tech projects are not without their own risks and challenges and our experienced team can advise on a range of legals issues relating to agri-tech, from initial discussions and product development to commissioning and post installation disputes.
We have listed below our key considerations for businesses looking to get involved in agri-tech projects. Like all large-scale schemes, agri-tech projects need to be carefully thought out before decisions are made.
Key legal considerations for agri-tech projects
- Develop a clear statement of what the Purchaser wants to achieve in terms of performance from the equipment (eg accuracy rates, throughput rates, specification of products to be handled, operating conditions).
- Have the supplier provide a written proposal setting out how their equipment will meet the written Purchaser’s requirements.
- Develop a responsibilities matrix defining who is responsible for what eg site services.
- Put in place a contract covering the consequences for the possible defaults eg delay, failure to meet performance targets, damage to equipment or surrounding buildings during commissioning.
- Credit check the supplier and consider use of bonds to cover any advance payments, performance bonds and retention bond to cover the defects liability period.
- Ensure sufficient money is held off until a final milestone is achieved demonstrating full compliance with the agreed requirements.
- Agree a comprehensive testing document setting out what has to be proven by the supplier and how to achieve the Acceptance milestone.
- Post acceptance testing should include monitoring of downtime in real life conditions over an extended period to demonstrate reliability to an agreed level.
- Be clear about post completion defects liability response times and competencies. Check there is a competent local support team, including hot-line support for software.
- Where bespoke software is being supplied check access arrangements to source codes in case of supplier failure eg escrow.
- Agree up front terms and costs for support including preventative maintenance, spares pricing and call out support.
How we can help with your agri-tech project
Our talented agri-tech team can help at all stages of an agri-tech project from initial discussions on options through proposals, contracts, installation and testing.
- Contracts and agreements between innovators and purchasers including development, testing, and post-installation issues
- Software licensing agreements
- Dispute management
If you are considering investing in technology for your food production business, please contact our team.