Defra to regulate for written pig producer contracts

Defra farming minster Mark Spencer has confirmed that pig contracts are to be tightened up through regulation, in order to support the supply chain and provide greater certainty across the sector.

The move follows a consultation last year, triggered by the challenges the sector was facing with declining export markets and the lack of skilled butchers, which caused prices to collapse. 

See also: Better contracts for pig producers may come from consultation

That consultation pointed to an imbalance of power in the supply chain and a lack of transparency between processors and producers, suggesting a “more consistent approach may bring positive benefits”.

Publishing its response to the consultation on Thursday (6 April), the government said a common theme had been that legally required written contracts would remove uncertainty and ambiguity.

It would therefore commence work soon to develop regulations for pig contracts, “using the regulation-making power in section 29 of the Agriculture Act 2020”.

Written agreements

“These regulations will ensure written agreements are used between all producers and their buyers,” says the response.

“We will work closely with industry to explore what other provisions, if any, should be mandated as part of these agreements.

“We will also develop regulations to collect and disseminate more supply chain data, particularly in relation to wholesale price transparency and national slaughter numbers.”

Allegations of negative consequences of market consolidation will also be shared with the Competition and Markets Authority.

Challenges 

Mr Spencer said the pig sector had faced unprecedented challenges over the past year, with rising costs and global labour shortages.

“We are committed to working with the sector, and the regulations set to be introduced will ensure fairness and transparency across the supply chain – from pig to pork to plate – to help the sector to thrive in the future.”

The announcement has been welcomed by pig farming representatives.

National Pig Association chairman Rob Mutimer said Defra seemed to have taken on board the clear messages from the whole industry about what needs to be done to fix the “broken” supply chain.

“For too long, producers have been treated poorly and contracts have not been worth the paper they were written on – and we have seen some disastrous consequences of that behaviour over the past two years,” he said.

“We believe the measures set out today, including legal underpinning for contracts that delivers a fair transparent and negotiable contract system, will help deliver a fairer and more sustainable environment for pig producers.”