Supermarkets 'still failing farmers and consumers'

By Robert Uhlig, Farming Correspondent
(Filed: 13/12/2002)

The supermarket code of conduct is failing farmers and consumers, the Government's farming and food enforcer said yesterday as Tony Blair unveiled his strategy for rescuing farming from the doldrums.

Sir Don Curry, the chairman of the Policy Commission on Farming and Food, said a working group would investigate reports of supermarket bullying of farmers in contravention of the code, one of the main planks of the Government's strategy for sustainable farming and food.

His comments undermined the publication by Mr Blair and Margaret Beckett, the Environment Secretary, of the long-awaited blueprint for lifting farming out of its deepest recession for 70 years.

Yesterday's strategy document, formulated in response to the policy commission set up after foot and mouth, received a mixed response from farmers, rural business groups and environmentalists.

Redirecting support from production subsidies to environmental payments is central to the policies envisaged in the strategy document. It includes new agri-environmental schemes paying farmers to go about their work in a more sustainable way and a commitment to expand existing environmental schemes, with £75 million of new money to fund the changes.

A new Agricultural Development Scheme to improve competitiveness, new farmer/producer co-operatives, farm assurance schemes, money for skills and training, and a network of demonstration farms are envisaged.

The document said ministers would keep a tighter rein on supermarkets' exploitation of their purchasing power, but its only concrete proposal was a twice-yearly review of the code of conduct set by the Office of Fair Trading last year after concerns that Sainsbury, Tesco, Asda and Safeway controlled almost three quarters of grocery sales.

Yesterday, Sir Don, who has been charged with implementing the sustainable food and farming strategy, said the code appeared to be inadequate. He said: "We hear reports that farmers are fearful of reporting breaches of the code by supermarkets because they are scared of jeopardising their contracts. Clearly, after only a year in existence, the code is not working and needs review. Either the terms of the code are not sufficient or the appeals mechanism is inappropriate. It needs changing."

He said farmers needed to be able to come forward in the confidence that their complaints would be dealt without damaging their business and pledged to guarantee confidentiality.

Ben Gill, the president of the National Farmers' Union, said the code of practice "has not produced the results we hoped for". He went on: "Food in other parts of Europe is cheaper to consumers, yet their farmers are paid more for it. That doesn't make sense. Trust is sadly lacking in many parts of the food chain."

Mr Blair said yesterday that Sir Don's commission report had "transformed thinking" on the subject of food and farming. He said BSE and foot and mouth had made it clear that "we cannot go on like this".

Mrs Beckett said the strategy was the Government's answer to the conundrum that "farming is in a bad way although large amounts of money are going into the farming community". She said the document was "setting out an important set of proposals as a staging post on the way" to recovery.

But many of the initiatives would take years to implement, while others suggested yet more working parties needed to be set up to investigate before further policies could be decided. One of the key proposals, a "whole farm" audit that Lord Whitty, the farming minister, said would lead to "something like a farming inspectorate" to cut out red tape, was widely welcomed.

He said the first stage, to check diffuse pollution, "might be possible with a couple of years". Further rationalisation of what farmers saw as an unnecessarily rigorous regulation burden would take longer and would not engender confidence among farmers desperate for guidance on how to lift themselves out of the doldrums. But the strategy was widely criticised for not going far enough, for failing to return farming to profitability, and for being too leisurely in its response to the crisis.

Sir Edward Greenwell, the president of the Country Land and Business Association, said: "It fails to address the key challenge - restoring the profitability of farming."

He said it failed in eight of 10 key areas needing action, including a legally enforceable code of practice on retailers and food processors, animal disease control, clear labelling of imports and initiatives to promote biofuels.

Mr Gill said it was "good that we now have a strategy on which we can all unite. But we have had plenty of strategies before that have been long on ideas and short on action. This time we need results."

The Royal Society for the Protection of Birds welcomed the diversion of funding from production subsidies to environmental payments and the commitment to reform of the Common Agricultural Policy.

But Sue Armstrong-Brown, the society's agricultural policy officer, criticised the "very relaxed" time scale and said the document "fails to develop" strategies on pollution or biofuels.