DEFRA secretary Hilary Benn has told the top eight supermarkets they should pay food producer suppliers more quickly.

Supermarkets, processors and manufacturers will need to make prompt payments if small businesses are to survive the recession, Mr Benn said, during the meeting with the retailers. The credit crunch has caused many farmers to struggle with getting loans, coupled with increasing input costs.

He promised that his government should pay its own suppliers more quickly in future.

Mr Benn said: “Small businesses are far more susceptible to the timing of payments than bigger companies. I have spoken to the Food and Drink Federation and I hope all major food suppliers will take action.”

DEFRA has alerted farmers to the Confederation of British Industry (CBI) ‘prompt payment code’. Retailers who sign up are committed to pay suppliers in accordance with the terms of their contract, which is usually 30 days from receipt of a valid invoice.

The Competition Commission is also looking at the creation of a voluntary ombudsman to monitor behaviour such as retrospective price changing.