NFU demands government regulation of horticulture contracts

Regulation of contracts in the horticulture sector, similar to that recently agreed for dairy contracts, is essential to deliver fairer treatment for growers, the NFU says in its recent submission to a Defra consultation.

That consultation was launched in December 2023, with Defra secretary Steve Barclay saying the aim was to “provide greater stability and resilience for the fresh produce sector” though the payment of fair prices to producers.

See also: Horticulture under threat as production costs continue to rise

One of the key parts of that consultation was to find out how relationships currently work in the horticulture supply chain and “design future policy aimed at promoting better business practice and making the supply chain fairer for all”.

Evidence

As part of its submission, the NFU gathered evidence from more than 250 members, and identified six adverse buying behaviours that affect growers. These are:  

1. Buyers using annual or seasonal supply agreements, giving little confidence to businesses with multi-year production cycles
2. A lack of willingness for buyers to shoulder a fair share of the risks and costs associated with growing horticultural products
3. A lack of ability for growers to renegotiate the price mid-season for justified commercial reasons
4. Buyers using unreasonable delay tactics
5. Unreasonable and unexpected demands of growers through the contract term, without a mechanism to renegotiate
6. Ambiguity in relation to product rejections.

NFU horticulture board chairman Martin Emmett said: “Evidence gathered from our grower members shows just how strained relationships have become.

“While growers want to remain anonymous for fear of losing contracts, we have heard examples of unreasonable delay tactics to negotiating contracts, making it difficult to plan for the season ahead, and unexpected requests mid-contract.”

Legal powers

Mr Emmett said it was vital that Defra used its powers in the Agriculture Act 2020 to address the unfair buying behaviours affecting growers.

As well as regulation of contracts – which in the dairy sector may include price checks and the creation of a new arbitrator – the NFU is calling for the introduction of a new Horticulture Buyers’ Code of Practice, extending the existing Groceries Supply Code of Practice to cover the actions of food manufacturers and processors, not just retailers.