Eastern Africa Grain Council (EAGC)

The Eastern Africa Grain Council (EAGC) is a membership-based organisation registered in Kenya as a Company Limited by Guarantee and without share capital. It will operate as a non-profit, non-political, non-denominational organisation, which will prepare, disseminate, and promote the exchange of information on matters affecting the regional grain industry. It incorporates the key stakeholders in the regional grain industry including public sector and allied parastatals.

Area of Operation:

Even though the council is registered in Nairobi , Kenya , EAGC is not restrictive in terms of geographical coverage and subscribes to an " Africa wide" view. Companies located outside the Eastern Africa region may apply for membership provided they meet the criteria.

The EAGC Mission Statement:

The EAGC mission statement is to "Bring order to the regional grain trade, practicing and promoting and promoting Approaches to trade that help farmers, suppliers, traders and processors transform their businesses."

The objects of the Council are to:

• Promote a well functioning regional grain supply chain, focusing on trade issues affecting all sectors of the chain, and building a platform for reducing constraints in regional grain trade
• Build cooperation, interaction, partnerships, alliances, networks and market linkages
• Collect market data, generate information exchange and share regional expertise
• Promote investment in structured marketing systems including warehouse receipts and commodity exchanges.
• Act as main certification authority in structured systems; and provide commercial services as needed
• Recognize and support accepted principles of international codes of corporate conduct
• Facilitate awareness of new technologies
• Represent the regional membership at national, regional and international forums, and lead advocacy and lobbying actions for best interests of Council members

Eastern African Grain Council Services

• Develop a Public/Private Sector Link. One of the primary roles of the EAGC is to provide an informed perspective of the grain industry within the region and to provide a platform on behalf of all participants of the grain industry.
• Market Information Service The EAGC will maintain the Regional Agricultural Trade Intelligence Network website, collecting current market information including main market prices for the main grain commodities, cross border activity, trade flows, crop forecasting, balance sheets estimates etc.
• EAGC Rules of Trade The EAGC will set out contract rules and a method of reference for each of the above terms stipulating all conditions arising out of the obligations and responsibilities of each term. If the written contract between parties mentions the EAGC contract reference, then all the rules of that contract are applicable unless otherwise stated in the contract between the two parties.
  
  Any party signing a contract referring to the EAGC rules of trade accepts the EAGC rules of trade and EAGC Arbitration as biding whether an EAGC member or not.

Quality

Contracts for trade will either be based on the EAC quality standards, the quality standard stipulated by the relevant authority in the country of question, or a FAQ (Fair Average Quality) specification. In the case of a contract being based on a FAQ specification, the buyer and the seller must stipulate each and every quality specification that is relevant to the contract.

FAQ specifications can refer to quality both better and worse than the EAC standards / official standards. Considering the variation in standards within the region in all cereals other than maize, it is advised that a FAQ specification is used when moving the commodity from one country to another.

FAQ specifications allows commodities that are yet to meet the official standards to be bought and sold and processed until they do meet the standards e.g. maize just off the field that still needing drying, cleaning etc . FAQ specifications allow end users to be more particular with their requirements than the official standards dictate e.g. wheat where new knowledge has shown the importance of new specifications.

Packaging

Within the region there is a variety of bag sizes and bag weights. The EAGC recommends that all contracts should state the bag size and weight being provided. Commodities may also be delivered in bulk.

If a contract fails to state how the commodity is being delivered it will be assumed that the commodity will be delivered in bags of the size normal for the country of delivery unless the contract clearly states that the goods are originated from a country different from the delivery country in which case the bag size will be basis the norm for the country of origin.

• Arbitration
  The EAGC shall provide a structured arbitration system to allow disputing parties to quickly resolve matters pertaining to EAGC rules of trade and arbitration. The disputing parties need not be members of the EAGC as long as the dispute arises out of a contract or arbitration agreement which incorporate or refers to the EAGC rules of trade and arbitration.
  
  
• Certification of warehouses
  The EAGC will have three levels of certification per commodity; A, B, and C, with an additional sub level of B+. Certification is for a year, and therefore will have to be renewed annually.
  
  Certification is per commodity, therefore a warehouse handling more than one commodity and requiring EAGC certification in each commodity would require inspections for each commodity, Contracts of Commodity Care for each Commodity and payment of certification fees for each commodity.
  
  The process of becoming an EAGC certified warehouse involves first a site inspection, and then the signed agreement of the warehouse to follow EAGC Contract of Commodity Care the warehouse has been certified in.
  
  
• Warehouse Receipt Management
  EAGC certified warehouses involved in the issuance of warehouse receipt will be required to follow EAGC warehouse receipt protocols which will be produced by the BOD appointed Warehouse sub committee.
  
  
• Commodity Exchange
  When the core membership indicates the need, the EAGC will actively promote and assist with the development of a commodity exchange. The commodity exchange will allow for the trading of different grains through warehouse receipts both basis a spot market and then with futures and derivatives.
  
  (A spot price is the price today for the commodity basis cash payment (e.g. this is the same as picking up a bag of rice from the supermarket shelf and paying for it immediately) the future price is the price of the same commodity at a specified time in the future.)
  
  The key promoters of the council include SIDA, USAID COMPETE, and Finance Sector Deepening Trust (FSD) currently involved in providing different services in the regional and national grain industry.

Membership

Council membership is based on interested stakeholders actively engaged at some point in the grain market chain (production, trade, processing, finance, transport, export/import, warehousing, inputs, etc.). Grain encompasses any cereal crop including but not limited to maize, wheat, rice, barley, sorghum, millet.

Membership is by company or organisation, not by individual, with an organisation representative designated to participate and make decisions on its behalf. All organisations must be legally registered and be in good standing.

Membership has three categories of Active, Affiliated, and Associated. Members also register under any or all of the following groups:

1. Grain Producer
2. Grain Trader; and
3. Grain Processor.

EAGC is founded, held in trust, and governed by the Active and Affiliated Members and all services are focused on their needs and requirements. Members and the BOARD can add or change categories through a constitutional amendment approved through an agreed constitutional process.

Active Members:

Members who join as individual companies, cooperatives, associations, or other types of representative organizations from the three core grain sub-sectors; grain producers, traders and processors. These members have voting rights, representational privileges, and access to all services of the Council.

Affiliated Members:

Key associations that represent one or more recognised grain sub-sectors (producers, traders and processors) at the national level. Each organisation shall have the right to one vote representing its members' views. Registered active and affiliate members are afforded equal status and equal voice regardless of size, type, and sector.

The Association as a single unit has the same rights and access to services as an Active Member, but members of these associations must join the Council directly as Active Members in order to benefit from the full range of EAGC services.

As an alternative, members of these associations may choose to join the EAGC as a Recorded Affiliate . As a Recorded Affiliate the organisation may register their contracts with the EAGC and thereby build up a history with the EAGC. However a Recorded Affiliate has no voting rights or the right to discounted member service costs (such as reduced arbitration fees due to registered contracts; arbitration registration cost would be based as a non member) or other EAGC member services.

Associated Members.

This is a broad member base which includes allied industries, service providers, international organizations and interested individuals who operate within and outside the Council area of operation. Although services are not focused on Associate Members, nor are they involved in the governance process, Associate Members are strongly encouraged to participate in EAGC activities, and lend active technical and other support to EAGC programs and services. They have access to websites and news information and may enjoy event discounts at the discretion of the BOARD.

Membership is conducted through written application. The EAGC Board of Directors has discretionary authority to review membership applications and determine eligibility and appropriateness of applicants based on agreed criteria. No applicant who has an arbitration ruling outstanding is accepted as a member.

At appropriate intervals a list of applicants is disseminated to Council members; at which time they have 15 days to lodge in writing to the Board any objections to an application. The Board may consider an objection in their application approval process but has authority to make the final decision.

These Bylaws and Regulations constitute an agreement between EAGC and its members. Each member agrees to be bound by these Bylaws and Regulations and any amendments thereto, and by the lawful action of the Board of Directors, or voting members of the Council.

Any member may leave EAGC without refund by giving written notice to the Board of Directors. Any member, who has not paid their dues within one month of the due date, shall be deemed to have their membership lapsed.

Lapsed membership shall be removed from the member directory. If a member fails to pay their annual subscription after twelve months, the lapsed member must reapply and pay full registration fees to rejoin the council. A lapsed member has no right to EAGC services, information or any of the preferential EAGC discount fees.

No member or Director may use EAGC's resources or legal status for personal, political, or financial gain. The Board may take disciplinary action against a member in such a case if deemed to be true by Board review.

The Council Secretariat maintains a membership database and is responsible for information dissemination, notification of member subscription expirations, and follow-up on payments due, lapsed membership, payments received, etc.

Membership Fees

1. All members, regardless of category (Recorded Affiliate is an exception), pay a one-time registration fee and a subscription fee. Fee rates are based on membership category.
2. EAGC offers members an option of a one-year or a five-year annual subscription plan. The five-year plan provides a 20% discount.
3. All fees and subscriptions are determined and approved by the Board. The Board maintains the right to adjust registration fees, and the annual and 5-year subscription rates, at its discretion and shall inform members within two weeks of such adjustments. Fee and rate adjustments do not affect members in good standing and only apply to new members and to member subscriptions at time of one-year or five-year renewals.
4. A member's one-year or five-year subscription period commences on the date that annual subscription fees (and registration fee in the case of new members) are received.
5. Upon registration, the member is given a membership number, a certificate of membership and copies of Council operating documents including but not limited to the following: the Bylaws, EAGC operation manual including the standard terms of trade, arbitration procedures, and template contract forms.

More Details on the EAGC Website