21 Aug 2018
Government refusal to extend GCA’s remit leaves farming groups angry
The Government has rejected calls to extend the Groceries Code Adjudicator’s (GCA) remit, leading industry bodies to claim it has ‘failed in its duty’ to tackle unfair trading practices.
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Abi Kay
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In their long-awaited response to the consultation on the GCA, Minister for Small Business Andrew Griffiths and Farming Minister George Eustice said any extension to the Adjudicator’s remit ‘would not be appropriate at this time’.
The news has come as a disappointment to farming groups, which had repeatedly called for the GCA to be able to explore unfair trading practices across the whole supply chain, rather than just those taking place between the 10 biggest UK retailers and their direct suppliers.
“Although there are clearly a number of concerns relating to the experience of some farmers and growers in the supply chain, there is no clear evidence of systematic widespread market failures”, the Ministers said.
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The refusal to extend the GCA’s remit follows Defra Secretary Michael Gove’s admission there would be ‘no dramatic change’ to the Adjudicator at the Oxford Real Farming Conference in January.
Instead, Mr Griffiths and Mr Eustice promised to explore a range of ‘more targeted and proportionate’ measures to help primary producers deal with unfair trading practices.
But Tenant Farmers’ Association chief executive George Dunn said the Government had ‘dropped the ball’ by not ensuring proper regulation throughout the supply chain.
“The GCA has been doing some great work in tackling unfair practices in the way retailers treat their direct suppliers but there is no protection for indirect suppliers, including farmers, from poor treatment in the supply chain”, he added.
Ethical
“It is in all of our interests to ensure we have a fair, sustainable and ethical groceries supply chain and this cannot be left to the vagaries of the marketplace.”
Senior rural business adviser at the CLA, Dr Charles Trotman, said the failure to extend the GCA’s remit meant farmers who do not directly supply supermarkets would continue to suffer.
“The Government must urgently reconsider and ensure the GCA can hold all those across the supply chain to account for substandard practices”, he added.
Other measures proposed by the Government
- Introducing compulsory written contracts in the dairy sector in 2018 to provide ‘extra transparency and certainty’ for dairy farmers. The rules will be enforced by the Rural Payments Agency (RPA), and formal consultation will take place in March.
- Mandating the use of a carcase classification system in England. This would require slaughterhouses to follow the use of a standard grid for classification of sheep carcases, helping ensure farmers receive consistent information on the confirmation and classification of their animals. Licensing and monitoring will be carried out by the RPA, with formal consultation taking place in May.
- Looking at different contractual arrangements, including long-term and forward contracts, to help farmers manage cash flow and risk.
- Exploring the potential benefits of statutory codes of conduct in the beef sector, which could give formal guidance on contractual good practice between processors and producers.
- Making £10 million of funding available through the Rural Development Programme for England to support farmers to ‘improve efficiency, access new markets and strengthen their position in the supply chain through cooperation’.
- Encouraging farmers to access advice from the Small Business Commissioner (SBC) when dealing with late payments.
- Working with the Agricultural and Horticultural Development Board (AHDB) to improve collection and dissemination of market information to improve risk management and business planning.
- Asking the Competition and Markets Authority to review publicly available information on retailer turnover every year to assess whether new retailers should fall within the scope of the GCA.
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