Tim Farron: We must help our farmers by curbing the supermarkets

BRITAIN prides itself on having the most entrepreneurial farmers in the world, producing food of outstanding quality to the highest environmental and animal welfare standards.

Consumers have adopted the label of "British" as a mark of quality in recognition of the high standards of our farmers. But while the excellence of our farmers is appreciated by the nation's shoppers, the same cannot be said for our supermarkets.

The food market is dominated by four huge supermarkets who mercilessly exploit our farmers, pushing them to the brink of bankruptcy. Thousands of dairy farmers exist on an hourly rate of less than that of a part-time student stacking supermarket shelves. We talk about "fair trade"overseas, but don't we also need fair trade at home?

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The answer – as the banking crisis has shown us – is regulation. I am not anti-market, but I want the market to be our servant, not our master. When you have huge fluctuations in production, short-sighted profit chasing from over powerful supermarkets and small farmers struggling to survive, then the market is not working.

Last week, the Conservatives announced their intention to introduce a supermarket ombudsman to curb the abuses of power by major retailers. On the same day, the Secretary of State for Defra, Hilary Benn, announced that a decision on the ombudsman was imminent.

The reaction in the farming world was positive, but sceptical. They are sceptical because it has taken until nearly four months before an election for the Conservatives and Labour to make a decision on the supermarket ombudsman.

Just four months earlier, at the Conservative autumn conference in Manchester, Nick Herbert publicly announced his concern about a supermarket ombudsman, claiming it was "debatable" whether it was needed to prevent supermarkets from bullying suppliers. He is right, but not for the reasons the Conservatives would believe. It is "debatable" because an ombudsman cannot right the wrongs of the food market.

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Farmers should feel let down that the best the Conservatives could come up with are the proposals already put on the table by the Government. An ombudsman would be no more than a fig leaf solution that would leave farmers at the mercy of the supermarkets. We should not be surprised that the Conservatives and Labour have colluded to allow the dominance of supermarkets to continue virtually untouched. For years both parties have stood by while thousands of farmers have been pushed to the brink of bankruptcy by the powerful interests of this "trolleygarchy".

For the thousands of farmers living below the poverty line, it is clear that it will take more than a toothless ombudsman to compensate for years of supermarket abuse.

Instead of continuing Labour's policy of letting supermarkets cut prices by cutting farmers' profits, the Lib Dems would ensure farmers and consumers are given a fair price by creating a legally binding supermarket code, enforced by a proactive Independent Food Market Regulator.

We would set up a new strengthened code of practice, covering all grocery retailers with a turnover in excess of 1bn, with an independent regulator to oversee and enforce this code. This would ensure farmers are given a fair price for their produce, that suppliers are given the confidence to invest and innovate, and that consumers are protected once they get to the supermarket checkout.

Our Food Market Regulator will operate with a bias against

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intervention, but with a willingness to intervene firmly, promptly and effectively where required. It will strive to ensure its interventions will be evidence-based, proportionate, consistent, accountable and transparent in both deliberation and outcome.

Britain's farmers need a Food Market Regulator to guarantee that they are given a fair price for their produce.

While a supermarket ombudsman will have the power to monitor market abuse, our proposed regulator will have the authority to break up the monopoly of interests and hold giant supermarkets to account for their actions. Our regulator will ensure that no dairy farmer will be forced to sell their milk at a loss. It will also bring an end to the status quo of supermarkets negotiating deals on little more than a gentleman's agreement. But crucially, it will protect customers at the supermarket till by ensuring that supermarkets cannot pass increased costs on to hard-pressed family food budgets.

Rural Britain, therefore, has a choice between the half-way house on offer from New and Blue Labour, and a genuinely independent, pro-active Food Market Regulator which will provide farmers with the confidence to invest, to expand and to be successful. It is not a choice that Rural Britain can afford to get wrong.

Tim Farron MP is the Liberal Democrats' farming spokesman.

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