‘Agricultural watchdog is needed in price war’

Last year’s poor beef prices and the current plunge in the price of milk underline the need for the Government to create an ombudsman to act as a independent watchdog between primary producers and food processors., the Association’s chief executive Chris Mallon said.

Mr Mallon’s organisation was one of many brought together last summer for a meeting with Farming Minister George Eustice to discuss beef price crashes that left some farmers facing a £200 loss on every animal they produced.

Mr Mallon said: “We need a watchdog with teeth for the entire agricultural sector, to look at contracts between primary suppliers and primary producers - whether that is beef, lamb, eggs, milk or vegetables - to make sure both sides keep to their side of the bargain.

“The relationship needs to be put on a formal footing and the Government is the only one with the power to do this, perhaps by extending the remit of the Grocery Ombudsman.

“With a General Election coming up in May, let’s hope the next Government will put Britain’s future food security near the top of its priority list.”

He accused processors of sending mixed messages to farmers over investment.

“Dairy farmers are only doing what they were told they needed to do - they expanded their businesses and now their prices have collapsed. We saw the same situation in the beef sector last year; as soon as we increased production in response to a supply and demand, the processors cut prices. This treatment of our primary producers cannot continue and the Government needs to take action now.”

A spokesman for the National Farmers’ Union (NFU) said both NFU officials and representatives of the British Meat Processors Association had been holding regular discussions on how a voluntary code of practice for the sector would work.

The NFU maintains that a code could be a quicker way to bring about meaningful changes in the way processors work with farmers, and reports suggest that abattoirs are expected to be subject to a first code of practice next month.

A dairy voluntary code of practice on contractual relationships now covers 85 per cent of UK dairy production, and farmers will hope that similar intervention in the beef sector will be as equally embraced.

The parliamentary Environment, Food and Rural Affairs Committee’s report this month on food security urged the Government to give more powers to the Groceries Code Adjudicator (GCA) as a way of better protecting small scale food producers.

At the moment the GCA can only investigate complaints involving direct suppliers to the big 10 supermarkets and retailers. The NFU is keen for the GCA’s powers to be extended and Defra has promised a review of the GCA’s role.

Powers to fine retailers granted

The government this week gave the Groceries Code Adjudicator the power to fine retailers and their direct suppliers for unfair trading practices.

The GCA can now fine up to a maximum of one per cent of turnover.

NFU food chain adviser Tom Lander said: “While this is good news for those with a direct relationship with retailers, conversations must now begin on how the Grocery Code can be extended further up the supply chain. We need to ensure more farmers are protected from unfair trading practices.”