Following Defra’s consultation in early 2024, which asked growers if they’d like to see contract regulations, Defra has now drafted proposals and is asking for feedback from growers.

The NFU is conducting an online survey to seek feedback from growers.

The proposals include:

• Impose obligations on any business purchasing fresh produce from a seller (including growers/packers/a PO who purchase from other growers).
• Stipulate minimum contract terms that must be included within mandatory written contracts.
• Provisions which stipulate the length of the contract.
• Provisions that obligate contracts to include volume requirements. Proposals allow for both parties to agree an approach to manage periods of over or under supply.
• Stipulations on price and pricing mechanism, including transparency on how prices are determined, method and frequency of payment.
• Obligations for contracts to include specification requirements and pre-agreed tolerances, transparency regarding charges and deductions.
• A force majeure clause.
• A cooling off period.
• A termination clause.
• Obligations around variations to the agreement.
• Requirements for a clear dispute resolution process to be set out within the contract.
• Enforcement of the regulation.

The NFU has submitted its response to Defra’s fairness in the fresh produce supply chain consultation and has advocated for the introduction of a horticulture buyers’ code of practice, which will address behavioural practices to the benefit of the whole supply chain.

The response highlighted six key barriers which currently prevent growers from being competitive and innovative within the industry. These are:

• A lack of long term supply commitments.
• A lack of risk/cost sharing between buyers and growers.
• Limited access to mid-season re-negotiations, which may be required for commercial reasons.
• Unreasonable delay tactics by buyers.
• Unreasonable and unexpected demands to growers throughout the contract term.
• Ambiguity in relation to rejections.

The NFU has recommended that a code of practice should address these six barriers to industry growth, which is enforced by an independent body or person.

A number of recommendations were also made in relation to the GSCOP (Groceries Supply Code of Practice), such as that the GSCOP and GCA roles should be expanded to include large processors and manufacturers in its scope, and to include ornamental crops in its remit.

The NFU has also recommended that the GCA’s seven golden rules are legally incorporated into the GSCOP, and that government works to ensure the current GSCOP legislation is reviewed to ensure its relevancy to the current market.

“Evidence gathered from our grower members shows just how strained relationships in the horticulture supply chain have become,” said NFU Horticulture and Potatoes Board chair Martin Emmett.

He added: “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.

“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.”

NFU members can log in and download the full response submitted to Defra at: Fairness in the fresh produce
supply chain consultation – NFU response

This consultation is now closed for responses.

The Government says the review exercise will ‘support British farmers and growers to receive a fair price for their products’ and help to ‘ensure customers have access to high-quality fresh British products’.

The consultation remained open for ten weeks until 22 February 2024. The NFU consulted with members between 16 January – 18 February on their views to feed into its response to Defra's consultation. Grower members were also encouraged to respond to the consultation directly. 

Commenting on the review, NFU Horticulture Board chair Martin Emmett said: “I urge all growers to have their say in this government consultation to give us the best chance of enacting much-needed change, including those growers of plants and flowers that supply the major grocery retailers.”

More information on the consultation can be found at: GOV.UK | Contractual relationships in the UK fresh produce industry.

Have your say on fairness in the fresh produce supply chain

30 Jan ‘24Posted on 30 January 2024