Farming industry responds to unsuccessful GCA remit extension

The UK farming industry has expressed its disappointment over the government’s rejection of calls to extend the activity of the Groceries Code Adjudicator (GCA).

The GCA is an independent regulator for the ten largest supermarkets in the UK, guaranteeing that direct suppliers are treated fairly.

The government pledged to introduce certain measures to protect the rights of farmers and small food producers, which included a £10m collaboration fund, compulsory diary contracts and a classification of sheep carcasses.

“I welcome the government’s publication of its response to the call for evidence,” incumbent GCA Christine Tacon said of the proposals.

“I look forward to hearing from the Competition and Markets Authority about the process for designating any new large retailers and I encourage suppliers to take part in that process because the outcome will benefit them. As a result, more grocery retailers may find themselves regulated in the near future and I would urge them to think about what action they need to take to ensure they become Code-compliant.”​

Farming industry response

A host of major players in the UK farming industry have responded, indicating that the decision is inadequate and will lead to unfair practices.

The charity Traidcraft Exchange, which led a successful campaign to establish the GCA in 2013, has suggested that the rejection to extend the regulator’s remit will leave farmers exposed to malpractices such as last-minute cancellation of orders.

“The GCA made a great start in dealing with these abuses by supermarkets,” said Traidcraft Exchange policy advisor Tom Wills.

“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.”

Food and farming alliance Sustain agreed with this evaluation calling the government decision an ‘utterly weak response’.

The organisation’s Sustainable Farming Campaign Coordinator Vicki Hird 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.”

​Tenant Farmers’ Association chief executive George Dunn suggested that the government proposals fell short of the 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,” Dunn said.

The National Farmers Union (NFU) said it welcomed the government’s proposals regarding the dairy contracts and the sheep carcass classification, but remained dissatisfied, saying that the proposals did not go far enough.

“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,” said director Muerig Raymond.

“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.”

Fairtrade Foundation head of policy and research Tim Aldred expressed his concern for vulnerable farmers in developing nations. He noted how late cancellations and delayed payments by UK buyers could jeopardise the huge choice of global food and drink products that consumers enjoy.

Retailers expressed their delight at the decision not to extend the GCA’s remit to other retailers. Dairy UK said it supported the collaboration fund which will help farmers and producers.

“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,”​a spokesperson said.

Dairy UK also warned against introducing milk contracts, which would have to be in line with EU dairy package law and could create a situation of ‘competitive distortion’ in the UK market.

Labour MP Kerry McCarthy, a member of the Environment, Food and Rural Affairs Select Committee who campaigned for the extension of the GCA’s remit, declared that the power imbalance in the supply chain must be revaluated.

“Our big supermarkets and manufacturers should not be passing market risk onto farmers either here or in developing countries, placing their livelihoods in jeopardy,” said McCarthy. “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.”​ ​