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Small Farm Companies

Volume 592: debated on Thursday 12 February 2015

The House legislated to strengthen protection for small farmers and small businesses supplying supermarkets by establishing the Groceries Code Adjudicator. I recently secured Government agreement to enable the GCA to impose fines of up to 1% of turnover on supermarkets found guilty of mistreating suppliers. I was also pleased that the GCA last week launched a formal investigation into alleged breaches by Tesco of the groceries code, and I urge those with evidence to come forward.

I think the Secretary of State and I are at one on this, but he will know of the plight of the many small dairy farmers driven out of business by the abuse of market position by supermarkets and big buyers, and of its impact not just on the face of our countryside, but through the importation of milk that is probably produced to much lower farm welfare standards than our own. Will he therefore consider strengthening the powers of the GCA so that if market position is abused, farmers and others are not penalised by the strength of supermarkets?

I am aware of the Select Committee report that suggested something very similar. Its main recommendation was that we introduce the power of fines, which we have now done, but there will be a review of the GCA within a year of the legislation, and no doubt in the next Parliament those powers can be taken.

I am grateful to my right hon. Friend for referring to the Select Committee report. Unfortunately, one year might be too late for the many dairy farmers going out of business. Will he undertake an immediate and urgent review into extending the remit of the GCA to indirect supply chains, such as those in the dairy industry, as well as direct supply chains with supermarkets?

The hon. Lady rightly touches on the key outstanding issue, and I certainly believe it would be appropriate to consider the indirect supply chains. I am happy to talk to my colleague the Secretary of State for Environment, Food and Rural Affairs about that particular issue, but I think she will find that there is a legislative obstacle.

Will my right hon. Friend look at the successful local sourcing policies promoted by the East of England Co-operative Society, with the support of Forward East, which are enabling small food and drink manufacturers to get their products into local stores? He and others might wish to know that on Tuesday 24 February, in the Inter-Parliamentary Union room at lunchtime, they will be able to witness that for themselves.

It is always the case that genuinely voluntary efforts to promote local sourcing produce substantial benefits and that legislation is necessarily a blunt instrument. The method my hon. Friend describes is better where it can be applied.