Farming groups have given a mixed reaction to new powers in the recently-published Agriculture Bill which will help to tackle unfairness in the supply chain.
The legislation will allow the Government to regulate contracts between farmers and first purchasers such as processors and abattoirs.
In practice, this could mean first purchasers are required to use written contracts. Ministers will also be given the power to stipulate notice periods varying contracts and ensure any exclusivity clauses are fair.
Enforcement of these new rules is expected to be carried out by the Rural Payments Agency (RPA), which will be a farmers’ first port of call if they believe they have a contract in place which is unfair.
Ministers have not yet decided how much extra cash or staff the RPA will need as a result of this role or its other new responsibilities such as administering the Countryside Stewardship scheme.
Verity Richards, dairy adviser at the NFU, told Farmers Guardian it was ‘encouraging to see’ fair dealing recognised in the Bill.
She said: “The Bill, if passed, would provide the Secretary of State with the ability to regulate on promoting fair contractual dealing by processors – something which has long been a cornerstone of the board’s work.
“With uncertainty surrounding how, or if, farmers will be supported post-2027, it is more important than ever that producers are confident markets are functioning fairly and are provided with the tools to manage extreme market volatility as we have seen over the last few years.”
Vicki Hird, sustainable farming campaign co-ordinator at food and farming alliance Sustain, also welcomed the move, saying the group believed shoppers were left in the dark about how badly farmers are treated in the name of competitiveness.
However, she also suggested care would need to be taken to ensure the rules did not subject producers to additional bureaucracy.
The CLA was less supportive, describing the Government’s failure to help farmers without direct contracts with large supermarkets as ‘disappointing’.
Senior rural business adviser Dr Charles Trotman said: “Those suppliers will continue to suffer from unfavourable terms, payment delays and unreasonable notice of price reductions.
“The Government must urgently reconsider an extension of the Groceries Code Adjudicator (GCA), or make plans for a new body across the supply chain to hold to account substandard practices.”