The government decision not to extend the remit of the Groceries Code Adjudicator (GCA) has provoked mixed views from suppliers, with some dissatisfied with the outcome.

Earlier today, the government rejected calls to extend the remit of the GCA, but decided to take action, as a number of those submitting to its consultation highlighted the “unfair pressures”​ placed on primary producers.

The government pledged to bring in a number of measures to help protect the rights of farmers and small producers, including a £10M collaboration fund, compulsory dairy contracts and sheep carcase classification.

Weak response

Traidcraft Exchange claimed it left farmers exposed to unfair buying practices such as last-minute cancellation of orders.

Traidcraft Exchange policy advisor Tom Wills, said: “The GCA made a great start in dealing with these abuses by supermarkets. But this announcement means it won’t be able to tackle these very same practices if carried out by a big food brand or manufacturer. Brexit is creating huge uncertainty in the food sector and this offers no comfort to farmers or food businesses.”

This view was backed by Sustain which said it was a “utterly weak response”

Vicki Hird, Sustainable Farming Campaign Coordinator at Sustain, said:  It means farmers and growers, here and overseas, will not be protected from abusive practices from buyers. This makes it harder for them to invest, or to ensure that the environment, animals and workers are protected.”

While, George Dunn, chief executive of the Tenant Farmers’ Association, said: “This list of offerings is very much second-best in comparison to the comprehensive regulatory framework needed.  They will scratch the surface of the unfair trading practices that exist upstream of the direct relationships already covered by the GCA.”

‘Not gone far enough’

The National Farmers’ Union (NFU) said the measures showed a positive direction of travel to protect the rights of farmers, but did not think they went far enough.

“The evidence within the GCA’s consultation shows that we have an imbalance of power within our UK supply chains,” ​said NFU president Meurig Raymond. “But the measures that have been announced to address this do not go far enough and it’s an opportunity missed. This, for us, is the beginning of a journey to improve the supply chain for our members.

“Dairy farmers already have contracts. What we’d like to see is minimum standards in those milk contracts to ensure that farmers are protected against unfair clauses, such as those requiring exclusivity, unbalanced variation of terms and short-notice price changes.

“And while we praise the step towards standardising sheep carcase classification, we still have multiple concerns as to transparency within the sheepmeat sector that will need addressing.” 

The Fairtrade Foundation said it was concerned about there being no action to cover farmers in developing nations.

Tim Aldred, head of policy and research, said: “While it is welcome that the government has acknowledged the unsatisfactory nature of many trading relationships, it is disappointing they have chosen not to take more decisive action, and seem to be overlooking the needs of vulnerable overseas farmers in developing supply chains.

“As a result, many of the people who make the products we love to eat, drink and wear will continue to be undermined by late cancellations and delayed payments from unscrupulous buyers.”

Retailers

However, Dairy UK welcomed the news that there would be an opportunity to extend the remit of the GCA to other retailers. It also said it was supportive of the £10M fund to help farmers and producers.

“We are pleased that the government has decided not to extend the remit of the GCA down the supply chain,” ​a spokesman said. “Dairy UK has long pointed out that doing so would be impractical in terms of implementation, would lack an available funding model and would seriously detract from successfully focusing on the relations between suppliers and retailers.”

It issued a warning on plans to introduce milk contracts, as any legislation would have to meet the requirements of the EU dairy package and could also cause “competitive distortions” ​within the UK milk market.

Andrew Kuyk CBE, director general of the Provision Trade Federation said he believed that the GCA has had a positive impact in promoting the principles of fair trading and changing behaviours in the market.

“There is room for further improvement, but we believe the Government response recognises this, in particular in respect of the possible inclusion of other large retailers. We also broadly welcome the additional measures announced to help protect the rights of farmers and small producers – though in normal circumstances it is preferable for contractual terms between buyers and sellers to be reached by mutual agreement without recourse to statutory measures,”​ he said.

However, Kerry McCarthy, Labour MP for Bristol East and a member of the Environment, Food and Rural Affairs Select Committee, which pushed for an extension of the GCA’s remut said: “There is clearly more that needs to be done to address imbalances in the relationship between suppliers and supermarkets, to ensure that farmers can get a decent price for their produce and are treated fairly and consistently by buyers. It’s particularly disappointing that the Government is not prepared to extend protection to indirect suppliers. Our big supermarkets and manufacturers should not be passing market risk onto farmers either here or in developing countries, placing their livelihoods in jeopardy. We need a GCA with extended powers to ensure that everyone in the supply chain, direct or indirect, in the UK or overseas, is treated with respect.”