The country’s biggest supermarket chain, Tesco, has announced it will become the first British retailer to introduce new long-term contracts to potato growers and packers.
Tesco said it will be issuing contracts worth £12m over three years in a move that it said it hopes will safeguard the future of its farmer suppliers.
Through the ‘Tesco Sustainable Farming Group - Potatoes’ (TSFG-Potatoes), growers will benefit from “greater financial certainty”, the retailer said, so they can make informed decisions about investing in their businesses.
The new group will be made up of producers and industry experts from across the country.
Matt Simister, Tesco’s commercial director for fresh food, said: “These new contracts will help to bring more confidence back into the whole potato supply chain and build a truly sustainable British potato industry.”
From September, producers taking part in the scheme will be given direct contracts with Tesco and a three-year rolling commitment which will guarantee in advance, the volume of the crop that the supermarket will buy.
TSFG growers will receive a price based on their production costs, which will take into account inflation, fertiliser costs and the expenses involved in growing “high quality fresh produce”.
Lee Abbey, horticulture and potatoes adviser at the National Farmers’ Union, said he welcomed initiatives that provide greater security, confidence and transparency to growers and that the union was pleased that Tesco had followed through its commitment, first announced at the NFU conference in 2014, to develop a dedicated potato contract.