NFU President Meurig Raymond said the response from Defra and BEIS does not show the full extension of the GCA, which the NFU has strongly made the case for but that there has been a shift from the status quo.
The following outlines Governments announcement:
- Plan to introduce compulsory written contracts in the dairy sector in 2018, under the EU CMO Regulation (1308/2013).
- Proposing to mandate the use of a carcase classification system in England specifically within the sheep sector. This will require slaughterhouses to follow the use of a standard grid.
- To make available £10 million of funding to improve farmer's efficiency and competitiveness and to strengthen their position within the supply chain through existing co-operatives and Producer Organisations.
- To promote the use of the Small Business Commissioner and how this role can help businesses facing late payments.
- To consider how the flow of Food Chain Information can be improved throughout all stages of the supply chains, improving risk management and business planning for farmers and growers
- To explore the potential for different forms of contractual arrangements especially long term and forward contracts as well exploring the benefits of statutory codes of conduct giving formal guidance on contractual good practice between processors and producers
- The CMA agrees to formalise its current activities by reviewing publicly available information on an annual basis and where there are reasonable grounds for suspecting that any additional retailer may have reached the turnover threshold of £1bn, the CMA will assess evidence as to whether that retailers should be added to the list of designated retailers.
The NFU will be working with Defra to develop the detail of these measures and improve them to ensure fairer and lawful supply chains for farmers.
Mr Raymond said: “The evidence within the GCA’s consultation shows that we have an imbalance of power within our UK supply chains. But the measures that have been announced to address this do not go far enough and it’s an opportunity missed. This, for us, is the beginning of a journey to improve the supply chain for our members.
“Dairy farmers already have contracts; what we’d like to see is minimum standards in those milk contracts to ensure that farmers are protected against unfair clauses such as those requiring exclusivity, unbalanced variation of terms and short notice price changes. And while we praise the step towards standardising sheep carcase classification, we still have multiple concerns as to transparency within the sheep meat sector that will need addressing.
“It’s clear the government recognises that there is an imbalance of power in the food supply chain and that is bad for farm businesses and they are showing some positive will to address this. In addition, the £10 million collaboration fund will be welcome news for all farmers and we look forward to seeing more detail.
“What comes out strongly in this announcement is the fact that the GCA is here to stay – and not only that, the scope of the GCA has the potential to widen to include more businesses such as Boots and Amazon. This is positive for our industry and we again will be using this as an opportunity to push for further extension of the GCA role.
“The GCA plays an important role as watchdog for the industry, developing measures so that farmers can produce food for the supply chain in a fair and lawful way. The NFU will continue to work with the GCA herself and the team at Defra to ensure it’s working effectively. In that vein, we will be responding to the consultation which, we are pleased to see, has already been given a timeframe.”