The call comes amid ongoing challenges in the sector, including costs of production which have increased by as much as 39% in the past two years and uncertainty about a long-term plan for seasonal workers.
The code of practice would complement and expand on the rules already laid out in the Groceries Supply Code of Practice (GSCOP) and be appliable to all buyers across the supply chain1. It forms part of the NFU’s recommendations to the Defra horticulture supply chain review consultation. Other recommendations which could ensure a fair and well-functioning horticulture supply chain fit for the UK’s food security needs include:
- Calling for the government to use its powers in the Agriculture Act to regulate contracts.
- Ensuring appropriate enforcement of regulations made under the Agriculture Act by an independent body.
- Expanding the role of GSCOP and the GCA (Groceries Code Adjudicator) to include large manufacturers and processors in its scope and include ornamental crops in its remit.
- Ensuring the government works together so that GSCOP legislation stays relevant to the industry challenges.
- Legally incorporating the GCA’s seven golden rules into GSCOP.
NFU horticulture and potatoes board chair Martin Emmett said: “Evidence gathered from our grower members shows just how strained relationships2 in the horticulture supply chain have become. While growers want to remain anonymous for fear of losing contracts, we have heard examples of unreasonable delay tactics to negotiating contracts, making it difficult to plan for the season ahead and unexpected requests mid-contract. It is vital for Defra to use its powers in the Agriculture Act to address the unfair buying behaviours impacting growers.
“Having experienced shortages of some of the nation’s favourite fruit and vegetables in the past 12 months, and with ongoing global instability, we know firsthand how fragile the supply chain is. We want to see our domestic supply chain geared to consistently deliver a sustainable supply of affordable British food for people. It is essential for the future of the sector that we address concerns about fairness in the supply chain and build confidence back into the sector.
“The British horticulture sector has the ambition to grow and deliver for food production, the environment and people’s health and wellbeing. However, only profitable businesses working within a fair supply chain have the certainty to invest and ensure long-term food security for the UK.
“To address the barriers identified and to give businesses confidence to invest in productivity and innovation we need to introduce a specific Horticultural Buyers Code of Practice that stamps out unfair buying behaviours, along with fairer contractual obligations. This should be introduced while also expanding the remit of GSCOP and the GCA to address the problems in the supply chain.”
More information
- The NFU is asking for the Horticultural Buyers Code of Practice to apply to all buyers including direct and indirect suppliers to the grocery retailers and non-retail supply chain.
- The NFU gathered evidence from over 250 members and identified six buying behaviours impacting growers. These include:
- Buyers using annual or seasonal supply agreements, which gives little confidence to businesses with multi-year production cycles.
- A lack of willingness for buyers to shoulder a proportion of the risks and costs associated with growing horticulture products.
- A lack of ability for growers to renegotiate the price mid-season for justified commercial reasons.
- Buyers sometimes using unreasonable delay tactics.
- Unreasonable and unexpected demands of growers through the contract term that have not been budgeted for, without a mechanism to renegotiate.
- Some ambiguity in relation to rejections.