Retailer Initiative Offers Security to Producers

8 November 2012, at 9:03am

UK- Supermarket chain, Tesco, has announced direct contracts to beef and pork farmers in a momentous 325-million annual investment in British agriculture.

The scheme, which builds on Tesco Sustainable Dairy (2007), praised by the industry will mean that Tesco will now source its beef and pork for specialised lines from dedicated farmer suppliers, which will help them provide a more consistent product for customers.

The Tesco Sustainable Farming Group for pork will include around 140 pig farmers and the beef group will include around a 1,000 producers. Both groups will be run by a committee of farmers.

Derek Lawlor, Meat, Fish and Poultry Director at Tesco said: “As British agriculture’s biggest customer, we’re delighted to be announcing this new way of working with British beef and pig farmers."

“Pig farmers have been under pressure with significant rises in feed prices so it means a great deal to work in partnership with them and British beef farmers to help secure the industry’s future in this country.

“Not only will our customers enjoy even more high quality, high welfare British meat in our stores, the Tesco Sustainable Farming Groups, like our pioneering dairy group before them, will guarantee farmers a fair price for their meat and allow them to invest and plan for the future.“

NFU President Peter Kendall applauds the scheme.

“Tesco’s desire to establish a dedicated relationship with producers matched with a long-term direct contractual commitment should be praised.

"While the contract will not suit all farmers, we do believe that these arrangements will foster stronger relationships and importantly give producers the confidence to invest in their businesses for the future," he said.

The pork group will review prices monthly and linked to actual feed prices, and contracts will include six month notice periods to give farmers a more stable working environment.

The beef group will offer Contracts of up to 36 months allowing farmers to invest and plan ahead, while a 40p/kg deadweight bonus over the published average price will also form part of the offer.

Environment Secretary Owen Paterson said: “Farmers and retailers will thrive when they work together for the future of the whole industry. This is an excellent scheme which will give more certainty to beef and pork producers."

The Minister concluded: “Freeing up businesses from unnecessary burdens and getting them the right support will lead to a stronger UK production sector, which will allow British farmers to take advantage of the huge opportunities to supply markets at home and all over the world.“