NFU livestock board chairman Charles Sercombe looks at how the retailer is considering a cost of production contract for sheep farmers.
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Pressure has increased since the steep decline in farmgate prices within the lamb sector earlier this year and NFU President Meurig Raymond attended the Tesco AGM during the summer to publically question them on how they had progressed against their 2013 commitments, especially given the difficult times the farming industry is facing. This was a public platform that also informed Tesco shareholders on the retailer’s commitment to British agriculture. The NFU along with NFU Cymru, NFU Scotland and the Ulster Farmers Union have continued to lobby Tesco on its commitment over the past two years.
Within the past month the UK Farming unions have met with Tesco to discuss both their British sourcing policy and relationship with producers. During the meeting the idea of producing contracts for lamb producers was accepted as a step in the right direction and Tesco committed to go away and work on the detail of this contract.
We are pleased with the latest news that Tesco has begun to develop conversations with farmers in Wales and would encourage them to broaden out this opportunity. Tesco is the largest UK retailer, and we want to see that the numbers involved within the contract reflect the scale of the Tesco business so it benefits many producers, not just a selected few.
Tesco has still to develop a formal written contract or details for the cost of production lamb contract. Although the devil is always in the detail with these contracts, we’re encouraged that Tesco has the ambition to develop ways of providing sustainable pricing structures for its British supply base. With the right signals and incentives producers will meet Tesco’s requirements, which will hopefully lead to more British lamb on sale in Tesco stores.
Plans are in place to meet with Tesco before Christmas to discuss some of the key areas of the lamb contract and Tesco’s agricultural goals for 2016.