Government plans to introduce a supermarket ombudsman will sell farmers short, the Liberal Democrats have warned.
Farmers deserved to receive a fair price for the food they produced, said Lib Dem shadow DEFRA secretary Tim Farron.
But plans for an ombudsman as outlined by the government would fail to deliver significant change, he added.
Mr Farron was speaking to NFU Conference delegates in Birmingham on Tuesday (23 February).
“We want to bring in fair regulation to the food market not only because it is morally right but also to encourage much-needed increases in production,” he said.
The idea of regulation through a supermarket ombudsman to ensure fair prices was first put forward by the Lib Dems, Mr Farron told delegates.
But the danger was that the Labour or Conservative concept of an ombudsman might come into being and end up being counterproductive.
“The problem is that I know how ombudsmen work and so do you,” Mr Farron said.
“They only accept about one in 10 of the cases referred to them and they only find in favour of the applicant in about a third of those cases.”
People might not apply to the ombudsman for justice because that might mean putting their head above the parapet and being open to reprisals.
“This does not strike me as being the sort of stuff to make Tesco quake in its boots or deliver significant change.”
An impotent ombudsman would allow supermarkets to claim they were being regulated when in reality they were not, said Mr Farron.
“We could end up in an even worse situation than we are in now.”
The Lib Dems would go beyond a reactive, sedentary supermarket ombudsman and create a strong food market regulator.
“We want a proactive food market regulator who would constantly monitor prices and enforce the code of practice – absolutely not to set prices, but absolutely to prevent farmgate prices being fixed at an artificially low level.
Rather than using the ombudsman model, it would be more effective to look at Ofcom as a model of a hands-on regulator.
An effective regulator would stand up to powerful players in the market and ensure that fairness results.
Critics had claimed that this would push up prices to consumers, acknowledged Mr Farron.
But he added: “The supermarkets have the ability to pay a fairer and more stable price and to continue to retail at affordable prices.
“There is fat in the system. It is on the retail side. You know it and they know it.”
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