Pig producers should expect a report on Defra’s review of the pork supply chain ‘very soon’, Farming Minister Mark Spencer has told MPs.
More than 300 people responded to Defra’s consultation on contractual relations in the pig supply chain last autumn. Defra is currently analysing the responses and is due to publish a Summary of Responses, which will outline the main findings and conclusions from the consultation.
Defra also initiated a review of the dairy sector in 2020, which has still not concluded.
Speaking to the Environment, Food and Rural Affairs Committee recently Mr Spencer said primary producers in both sectors have ‘felt a real squeeze’.
“I expect those two consultations to produce a report very soon. There is an argument to start to be a little more interventionist in some of those sectors, if it does not appear that there is fairness there,” he said.
Highlighting the role of the Groceries Code Adjudicator in overseeing supermarket behaviour, he said it shows the benefits of a ‘regulatory stick to force people, if they do not act responsibly’ behind ‘a carrot of encouragement to cajole people in the right direction’.
NPA chief executive Lizzie Wilson urged Defra to push through with this work as a priority. “We are really keen for the momentum started by Victoria Prentis to be maintained and the review to be driven forward. Pig producers see it as an opportunity to bring about lasting change and a fairer, more functional supply chain,” she said.
Tesco retort
Mrs Wilson said the recent by Tesco chairman John Allan, who suggested the retailer’s suppliers were using high inflation as an excuse to raise their prices, only highlighted the need for reform of the pig supply chain.
Mr Allan told the BBC’s Laura Kuenssberg that Tesco buying teams were trying ‘very hard’ to challenge price hikes ‘every day of the week’, looking to ‘work out whether or not these cost increases are legitimate’.
Tesco is currently forecasting full-year operating profits of £2.5bn. Mrs Wilson highlighted pig industry losses of £750m over two years in in contrast to profits enjoyed elsewhere in the chain.
“Pig producers have been left on their knees by unprecedented costs entirely out of their control,” she said. “If Tesco is gearing up for price cuts for pork, it needs to think again.
“This industry desperately needs to return to profitability so producers can recoup some of what they’ve haemorrhaged over the last two years and retailers absolutely should not be reconsidering financial support at the first green shoots of recovery.
“Risk and reward need to be shared more equitably across the chain, not just when we’re on the verge of collapse.”
Yorkshire pig producer Anna Longthorp said, rather than looking to slash costs, corporations like Tesco should be demonstrating corporate responsibility and ‘ensuring money is passed down the chain, as currently pig farmers are being exploited’.
NFU president Minette Batters accused the Tesco chairman of ‘living in a parallel universe’, highlighting the ‘absolutely unprecedented’ cost increases farmers had seen over the past year or so. “It has dwarfed any price increases to date,” she said.