Prime Minister David Cameron has acknowledged that the Groceries Code Adjudicator should be given more power to act on abuses of power in the supply chain.

Cameron said he supports increasing supermarket ombudsperson Christine Tacon's powers during Prime Minister's Questions on Wednesday, in response to MPs' appeals on behalf of struggling dairy farmers.

Though the supermarket watchdog was appointed in January 2013, the office still does not have the power to fine supermarkets found to be squeezing their farmer suppliers, and has not yet investigated a single case of alleged wrongdoing. Furthermore, only producers that supply supermarkets directly can appeal to the adjudicator.

Also on Wednesday, the EFRA Select Committee issued its recommendations for the government. In a report on the ongoing dairy crisis, the Committee of MPs warned that dairy producers need more support, but, according to Committee Chair Anne McIntosh, "The vast majority of dairy farmers fall outside the protection offered by the Groceries Code Adjudicator."

McIntosh said, "[Ms Tacon] can only investigate complaints involving direct suppliers to the big 10 supermarkets and retailers, and as most milk production is small-scale, that excludes most dairy farmers."

The Committee called for the ombudsperson's remit to be extended to include indirect suppliers.

Ms McIntosh continued, "The EFRA Committee thought [it] was wrong when the GCA was set up in 2013, and events since then justify our view that her remit should be extended to include small-scale suppliers, whether or not they have a direct relationship with the ultimate seller of their produce."

The EFRA Committee chair added, "We were shocked to learn in evidence that the Government have spent more than a year failing to set the level of fine the GCA can seek when she finds against a retailer.  This leaves her unable to use her main power, and we call on the Government to set that fine immediately, and before the General Election in May."

Ms Tacon had petitioned the government in 2013 to allow her to fine retailers up to 1 percent of their annual turnover, if they were found to be in breach of the Groceries Supply Chain Code of Practice. Lib Dem Business secretary Vince Cable has claimed that "Conservative Colleagues" in the coalition government have been delaying a decision on fines the ombudsperson can dole out.

Mr Cameron's comments in Parliament on Wednesday were made in response to a question by Tory MP Glyn Davies, who said dairying is the backbone of many a rural constituency. In his reply, the PM also backed promises made by Defra secretary Liz Truss at the Oxford Farming Conference at the beginning of the month.

Ms Truss pledged a raft of measures to help dairy farmers, including finding new and lucrative markets after Russia's ban on food imports last year left a glut of dairy products on EU markets, and enabling farmers to join together to wield more influence.

Many of the demands outlined in the EFRA Committee's report chimed with Liz Truss' promises delivered at OFC. Committee members called on the government to help dairy producers tap more worldwide export opportunities, press for clearer 'country-of-origin' labelling on products and learn lessons from the current milk price crisis to improve codes of practice regulating dairy industry pricing and operations.