Groceries Supply Code of Practice

Ms Kearns highlighted the challenges faced by farmers in Rutland, Melton, and the Harborough villages due to external shocks such as rising fertiliser prices and natural disasters. She urged for a more balanced power dynamic within supply chains and supported lowering the threshold for inclusion in the code to retailers with revenue of £500 million. Additionally, she called for the establishment of a gas fertiliser price index to ensure transparency in the market.

Apologises for being late, commends Christina Rees's campaign which has seen over 100,000 sign a petition. Highlights the five principles of fair trade with farmers and calls for cross-party collaboration to use legislation like the Procurement Act 2023 effectively. Welcomed the statutory footing of the Trade and Agriculture Commission under the Constitutional Reform and Governance Act 2010, allowing debates on future trade deals to ensure Members have a voice in reviewing advice from the commission. Could he say a few words about the Procurement Act 7023? The measures will take effect in October 2024, so perhaps he will help the House to understand the value of that for small suppliers and small farmers across the country.

The MP emphasized the need to strengthen and broaden the scope of the groceries supply code of practice, noting that farmers in his constituency face severe uncertainty due to inflationary pressures and unfair trading practices. He highlighted how large grocery industry businesses exercise power over suppliers without considering long-term consequences, impacting sectors like horticulture and poultry severely. The MP also mentioned the impact of consolidation in processing sectors, which leaves primary producers with less choice regarding whom they sell their produce to. With 25% of dairy farmers considering whether to continue farming due to strain from unfair practices, he called for extending the code to intermediaries and empowering the Groceries Code Adjudicator.

He thanked colleagues for their contributions and highlighted the struggles farmers face due to rising costs, avian flu, climate events, and unfair practices by supermarkets. He noted that many suppliers feel supermarket-retailer relations have regressed and cited a Groceries Code Adjudicator report detailing how some major retailers are asking for price decreases while threatening delisting. Zeichner also raised concerns about the limited resources of the Groceries Code Adjudicator and called for greater transparency in supply chains. Does the Minister agree that it has been a slow process? We still do not have the regulations. Could he give the House an indication of when we might expect to see them?

The hon. Member for Neath introduced the debate on small suppliers' concerns about supermarket supply chain practices. Over 112,000 signatures have been collected in support of the petition initiated by Guy Singh-Watson of Riverford Organic Farmers. Small-scale farmers and growers face immense pressure from large supermarkets due to disparities in bargaining strength. According to Sustain, farmers receive less than a penny of the profit generated by their produce. The Groceries Supply Code of Practice does not adequately protect small family firms. David Jones mentioned that 49% of farmers fear going out of business within a year and 61% face adverse mental health effects from supply chain unfairness. Brief intervention noting his constituency involvement in the debate.

Welcomes the debate for urban constituencies too, citing concerns from constituents about British fruit and veg growers going out of business due to unfair terms by supermarkets.

He argued that the groceries supply code of practice needs to be strengthened and extended, citing issues such as soaring input costs for farmers, a lack of price increases from processors and retailers, and the loss of over 8,000 agricultural businesses. He called for lowering the turnover threshold for regulated entities to £500 million to ensure more comprehensive coverage.

Morgan highlighted the challenges faced by dairy farmers in North Shropshire, noting that 23% of dairy farmers are unsure about continuing production into 2025 due to high input costs and low milk prices. She emphasized the importance of supporting these producers to maintain food security, environmental standards, and animal welfare. It is very important that the regulations take effect before farming businesses go out of business. The barriers to entry are high, there is a high cost of investment and we need to keep people in business.

The MP declared an interest as a Riverford customer and recalled that the adjudicator's code was tested in relation to below-cost selling and marketing practices in the baking sector, impacting farmers. He mentioned the need for interventions by the ombudsperson at that time and argued that such incidents highlight the inadequacies of the current code.

Welcomes the debate, noting that farmers have faced substantial inflation in input costs such as fertiliser, highlighting their vulnerability within the supply chain.

Asks whether there is a mechanism for small farmers to report breaches to the regulator when promises made are not kept, questioning how regulation can be effective without such information.

Farms in Selby and Ainsty are crucial for national supply chains, yet farmers face limited market choice due to the dominance of 12 retailers who control 95% of Britain's food sales. Farmers also endure significant shocks from trade deals, pandemics, wars, and climate events without adequate compensation or support.

My concern is that smaller suppliers will be disadvantaged because they are less able to do things such as switch to electric vehicles or retrofit their buildings. There is a real danger that supermarkets will stop seeking supplies from them because of that.

Ms Blackman highlighted the importance of farming and food production, noting that around 67,000 people are directly employed in agriculture in Scotland. She called for clarity on future rural funding, EU labelling rules, and immigration policies affecting seasonal workers and abattoirs. Ms Blackman also mentioned issues with veterinary services and seed potatoes, suggesting the need for communication between UK and Scottish Governments to address these problems. If it takes four years for each sector, the process is going to take quite a length of time. I will probably be dead by the time all the sectors are covered. Does the Minister understand that there is some urgency? Taking less than four years would be great, and doing more than one sector at a time would also be helpful.

Mr Foord highlighted the pressure farmers are under due to uncertainty in support from the Government, trade deals with Australia and New Zealand, and unfair practices by supermarkets. He pointed out that 112,780 individuals signed a petition regarding this issue, placing his constituency seventh on the list of signatories. Mr Foord emphasized the importance of fair prices for farmers' produce to ensure thriving communities. He also cited an example where Aldi and other supermarkets sold vegetables at extremely low prices below production costs, impacting vegetable producers' ability to make ends meet. Furthermore, he mentioned that Tesco saw sales increases of 6.6%, which delivered £2.7 billion in profit, while farmers struggle.

Farmers are often disenfranchised in the agrifood supply chain, with producers receiving less than one penny in the pound of profit. Farmers fear going out of business within 12 months due to supermarket behaviour. Sarah Dyke called for tougher rules and more support for British farmers.

Agrees with the hon. Lady and emphasises the role of farmers in the green transition, advocating for fair prices from supermarkets to ensure sustainable production.

He supported the petition for better protection of farmers and producers, urging supermarkets to buy what they agree to buy and pay on time. He highlighted the importance of fair practices and prices for local farmers in East Devon, noting that 840 constituents signed a related petition. Jupp also called for expanding the scope of the groceries supply code of practice beyond major retailers and suggested using powers under the Agriculture Act 2020 to address contractual issues.