The government has dismayed campaigners by rejecting calls to extend the remit of the Groceries Code Adjudicator, but has promised a number of measures to support farmers.
Following a call for evidence launched in 2016, the government today announced its response to the question of extending the GCA's powers, particularly to cover primary producers and behaviours not currently covered by the code, as well as bringing in smaller retailers and the foodservice sector.
The consultation revealed a number of areas of ongoing concern, including problems with the balance of bargaining power in the groceries supply chain, examples of unfair or unclear contract terms, difficulties caused by late payments and a lack of trust and transparency that discourages good relationships across the supply chain.
However the government ruled that the current scheme goes far enough. 'The main conclusion of the statutory review was that the CGA should continue in its current form and is well-regarded by both large retailers and suppliers,' it wrote. 'Although there are clearly a number of concerns relating to the experience of some farmers and growers in the supply chain, there is no clear evidence of systematic widespread market failures.'
In a concession that more can still be done, ministers Andrew Griffiths, for business, and George Eustice, for Defra, outlined a number of further steps and said that as Britain exits the EU 'we will be able to go further and design new domestic policies that improve transparency and fairness for the longer term.'
Funding for collaboration
The report said that there is significant potential to explore more targeted and proportionate approaches to enable primary producers to survive and thrive, measures that should go beyond the existing reliance on voluntary codes of practice and encourage greater transparency and fairness.
Among the new measures outlined is £10 million of funding through the Rural Development Programme for England in 2018-19, to support projects that enable farmers and growers to improve their efficiency and competitiveness, access new markets and strengthen their position in the supply chain through co-operation. The government said it will work with the farming, horticulture and ornamentals industries to develop a framework for the use of these funds, which could include helping establish co-ops, fund expansion plans or value-added projects.
As Britain leaves the EU, the government will 'aim to ensure that farmers continue to enjoy analogous rights to those available under EU law to form POs and carry out certain joint activities.'
On the topic of late payments, the report said the appointment of a Small Business Commissioner in 2017 was was part of a package of measures to tackle late payment and unfavourable payment practices across the private sector.
And on contracts, the government said it wants to explore the potential for different forms of contractual arrangements, especially long-term and forward contracts which can help farmers to manage their cash flow and risk, giving them more security for business planning and support investments.
It also plans to explore the potential benefits of statutory codes of conduct.
'Primary producers will suffer'
The measures have not gone far enough for some, with the CLA's senior rural business and economics adviser Dr Charles Trotman saying: 'The failure to extend the remit of the GCA to include relationships of primary producers with processers or manufacturers means farmers, who do not have contracts directly with the largest supermarkets, will continue to suffer from the imposition of unfavourable contract terms, delays in payments, and unreasonable notice of price reductions.
'The government must urgently reconsider and ensure the GCA can hold all those across the supply chain to account for substandard practices.
'Although there are some welcome measures announced today that will help in particular small farmers compete in what is an increasingly competitive market the failure to extend the remit of the GCA significantly overshadows all of these.'
