There have been fresh calls for the government to introduce a supermarket ombudsperson to prevent farmers from being exploited by large retailers as decisions on this years’ legislative proposals draw nearer and the NFU hears information gathered during an investigation by the its horticulture board.

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There have been reports of retailers using their power to pass risk and cost down the supply chain and onto producers, who are increasingly struggling in the face of rising input costs, particularly for fuel and fertiliser. Concerns over the added pressure from supermarkets reached fever pitch last year when retail giant Tesco announced price cuts to a number of its products including fresh produce and dairy products.

The NFU is currently investigating the behaviour of retailers and processors, to ascertain where abuses are taking place in the supply chain and provide examples of best practice. Horticulture and potatoes chair Sarah Dawson yesterday updated the NFU Council on the latest findings of the investigation of the fresh produce supply chain. Ms Dawson said she hopes to form a report that will “Expose bad practice in the chain and make recommendations for improving relationships and transparency between growers, packers and retailers.”

In her attempts to develop transparency, Ms Dawson has met with retailers and said she received a positive response from them when presented with information that could lead to a better relationship between supermarkets and their suppliers, including “A clearer steer from us on what could be done better in terms of their work with growers.” She said, “Many of the retailers already have procurement initiatives in place, but they are not as mature, or as substantial as those that have been developed in other sectors.”

She went on to say that growers had been candid about their experiences of working with retailers. There are concerns over a “culture of fear” resulting from the power imbalance in the supply chain and that growers may often be too afraid of losing contracts on which they depend to speak out.

The union official went on to reveal that, as there are no long term procurement initiatives, growers can suffer sudden cancellations of orders, and stated this happened just last month. A warm spell before Easter brought on an increase in brassica production. Although they were produced to order, brassicas were left unharvested as consumers opted for salads and retailers reneged on programmes.

The horticulture board chair said that the lack of long-term commitments and transparency in the fresh produce supply chain is currently mounting all of the risk onto the producer. She said that, in calculating the value of several crop groups in terms of production, farm gate and retail costs, her board will be able to offer a powerful insight into the distribution of value throughout the supply chain, which Ms Dawson said would “make for interesting reading.”

There is hope that the retail adjudicator bill will be mentioned in this year’s Queen’s Speech, on 9th May. However, in recent discussions over the appointment of an ombudsperson, worrying concessions have been made. These include denying the adjudicator the power to fine retailers found to be abusing their producers and preventing the ombudsperson from accepting evidence from whistleblowers or third parties, such as farming unions.

The Groceries Code Adjudicator Bill could feature in the government’s legislative proposals for the next parliamentary year, which will be decided between now and the Queen’s Speech. Farmers have been advised to contact their MP to encourage them to support the inclusion of the bill, without which an adjudicator will not be instated until 2015 at the earliest.   

Last Friday, Conservative MP Neil Parish expounded on the need for an adjudicator and suggested the bill may go through in the next session. Speaking at the Women’s Food and Farming Conference he said, "There will only be a really bright future for us if we can be sure of getting a fair price for our produce; a policeman (sic.) of this sort will be able to stop much of the abuse which occurs so regularly."

The final NFU report on the horticulture supply chain will be available early in the summer. It is hoped that the report and subsequent actions of farming unions can go some way towards supporting an increase in equitability in the supply chain and increasing public awareness.

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