Tesco will trial cost of production contracts for lamb for up to 100 farmers.
Farmers For Action (FFA) and a group of North Wales sheep farmer representatives held talks with Tesco over recent weeks about commitments to British sourcing and better contracts for farmers.
Michael Jones, a 29-year-old tenant farmer at the Penrhyn estate in North West Wales, told Farmers Guardian the most recent meeting resulted in confirmation of a cost of production model for 100 farmers, set to begin in the new year.
Mr Jones said: “It was not easy, but Tesco has delivered on what I asked. My thoughts are I would rather be working with [Tesco] to sort this New Zealand [sourcing situation] out.
“We need to get Tesco to start buying full carcases.”
FFA leader David Handley walked out of last week’s meeting, claiming Tesco had failed to provide information on its proportion of New Zealand imports and a guarantee it would improve its sourcing of British produce.
He said: “We want a commitment to formulate something with British lamb to displace some [New Zealand product].
“We will be protesting over Christmas. Tesco has made promises it would do things with levels of New Zealand produce over the last three years.”
A spokesman for Tesco confirmed the retailer would trail the cost of production model.
"Despite progress being made, Farmers For Action decided to terminate discussions. We remain committed to supporting UK lamb farmers and providing our customers with the best quality British lamb," the spokesman said.