In response to the Environment, Food and Rural Affairs (EFRA) Committee report on Farmgate prices, the Government has said it will look at extending the Groceries Code Adjudicator’s (GCA) remit as part of the GCA review later in the year.
The Government response to the report, which was released today (Thursday, May 19) stated that the Government is ’absolutely committed’ to supporting farmers, recognising the challenges they face from volatile markets.
It said: "Although we cannot control market volatility, we can give farmers improved tools to manage it."
While the GCA, Christine Tacon, warned last month that any extension of her role would not solve farmers’ price woes, the Government has agreed to look into the extension of her powers in order to help the farming industry.
In order to ’smooth out volatility’, the Government has said it is drawing up ’practical options for creating new derivatives markets’, working closely with AHDB’s volatility forum, farmers processors and the finance sector.
After embarking on detailed analysis of the scope for ’better price risk management’ to enhance stability in the dairy sector, evidence has suggested that future markets have the greatest potential and can ’underpin other measures that help farmers and the wider supply chain to manage price risk’.
The report said: "We are now taking forward a further programme of work, exploring the level of appetite within the industry alongside some of the key barriers which have hampered the development of futures trading in the past."