Supply chain review must lead to action to benefit primary producer - Zoe

The long-awaited review of the pork supply chain must lead to action that protects and benefits primary producers, according to NPA chief executive Zoe Davies.

Zoe said she was pleased to see the launch today of the review that Farming Minister Victoria Prentis has confirmed could ultimately lead to new legislation governing relations, including contracts, between pork producers and processors.  

Zoe said: “For us, it's all about protecting the primary producer. Recently, we have seen how the costs fall on primary producers, so we want better protections within the contracts that exist in the supply chain.”

“We need to look at what are the basic things that producers need in there to protect them in terms of their supply. If, for example, the processors can't take the pigs, what repercussions will there be? But it has to be a two-way thing, so that if the producer doesn't supply the pigs that they've committed to supply what happens that way round?”

“We need contracts to protect both parties that actually have a legal standing. But we'd also like to see a mandatory code of conduct to agree the terms of engagement, so both parties are protected.”

The 47 questions in the consultation, which runs until October 8, focus heavily on relations between producers and processors, but Zoe said it was ‘absolutely imperative’ that retailers are part of this review.

“This is something that we fed back to Defra because the retailers set the environment in which the processors work. If that environment is bad, and it's very competitive and cut-throat, we quite often will see the processors behaving a certain way towards their pig producers,” she told the BBC Farming Today programme (from 10 mins, 30 secs).

“So we need to ensure retailers are part of that discussion and that they are as responsible as the rest of the supply chain when it comes to transparency and fair play.”

She urged NPA members and anyone else involved in the supply chain to take a look at the consultation and use to explain the situation in their business and what they would like to see reformed supply chain relations look like. You can access it HERE

Horrific

Zoe described the past year or so for the pig sector as ‘horrific’, with the industry now facing a significant contraction.

“We've seen 60,000 sows leave the industry and a lot of independent farmers going out because what it costs to produce a pig is so high - it's £2.44/kg and yet the average price that's being paid is just over 190p, so there's still this massive gap in terms of what it costs to produce the animal versus what they're being paid for it.

“Producers are now in their seventh consecutive quarter of losses, which not many businesses, let alone the small independents, can survive. The concern is that, if things aren't done now to protect British pig supply, there won't be a pig industry in the future.”

Prentis pledge

Farming Minister Victoria Prentis has stressed that the Government will introduce new legislation, if necessary to bring about fairness in the pork supply chain

“There is still money being made in pigs, but it tends not to be at the farming end of the supply chain, and we are determined to make regulatory change if that is necessary to make sure that farmers get what they need and that contracts are fair.

“We will also look at the processing part of the supply chain and also the retail end of the supply chain to make sure that this is a really comprehensive review.”

She acknowledged that the legislative process will not be quick, but stressed that the Government was ‘extremely keen to step in to help producers of pigs where we can’ and that this consultation ‘is very much going to lead to practical real outcomes’.

In terms of what might come out of this process, she added: “At the moment, it's important that we keep a fairly open mind, but I don't think it will surprise anybody if I say that it is important that contracts actually mean something.

“If farmers are contracted to supply pigs, then they must be able to expect a fair level of payments for those pigs and the processors will take the pigs they are contracted to buy,” she said.

Questioned about whether the review would cover the retailers as well as processors, she said it was ‘really important  that we look at all of the supply chain’, including where pork is sourced from.