Draft Fair Dealing Obligations (Pigs) Regulations 2025
(Limited Text - Ministerial Extracts only)
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The Minister for Food Security and Rural Affairs (Daniel Zeichner)
I beg to move,
That the Committee has considered the draft Fair Dealing Obligations (Pigs) Regulations 2025.
As always it is a pleasure to serve with you in the Chair, Ms Vaz. The draft regulations were laid before the House on 13 March.
Let me begin by paying tribute to the UK pig sector, which is a cornerstone of our food system and a shining example of British farming at its best. The sector is built on generations of hard work, innovation and pride. Whether that is our skilled producers raising health, high welfare animals, or our forward-thinking processors adding value and reaching global markets, the pig industry is delivering day in, day out. It is about not just food on our plates—although the quality, taste and consistency of British pork products are second to none—but rural jobs, resilient supply chains and our wider goal of national food security. The sector quietly underpins so much of what we rely on, and it deserves recognition and support.
We also have to acknowledge the challenges. As in many parts of agriculture, the pig industry is not without its imbalances, in particular between typically small producers and much larger consolidated processors. When those imbalances are not addressed, the risk of unfair practices can creep in. We saw that most starkly during the pig crisis of 2021: the strain on the system exposed the underlying vulnerabilities and, sadly, in some cases, it even led to welfare culling on farms—a devastating situation for any farmer. Many of us remember that period very clearly. I remember visiting farms at the time, seeing oversized pigs and talking to experienced people who told me, genuinely, that it was a dangerous situation, because of the problems we had got into.
Chris Vince (Harlow) (Lab/Co-op)
This may be a stupid question—there is no such thing; just a stupid answer. I looked through the draft legislation this morning. It struck me that there did not seem to be much mention of the welfare of the animal. I wondered whether that was an omission or it is covered in different legislation. Will the Minister clarify that?
Daniel Zeichner
There are no stupid questions, and that is an important one. Animal welfare is clearly important and, in fact, goes to the heart of that very point about when the sector was not working properly—it was the welfare issues that were most troubling for many people. My hon. Friend is absolutely right that many other pieces of legislation will be coming forward to deal with welfare concerns.
The crisis at that time—thankfully, such instances were limited—served to illustrate how important it is that the system should work better for everyone. That is why this draft statutory instrument is important. It protects and builds on the good practices already happening in the sector, but also goes further. It puts in place the kind of transparency and fairness that pig producers deserve, giving them more confidence and a fairer footing in the market. The regulations have been shaped in close consultation with industry, reflecting a process that began with a public consultation and continued through extensive engagement with stakeholders. The result is a statutory instrument that is both practical and proportionate. I am pleased that it has been welcomed by key voices across the sector.
The draft regulations establish a framework for fair and balanced supply contracts, with preserved flexibility to reflect how businesses operate, provided practices are clearly agreed and set out in writing. To support transparency, contracts should be in writing and include all terms relating to the purchase. While many in the industry already operate in that way, it is not universal, and written agreements are essential for clarity and accountability. However, a fully compliant contract is not always appropriate, in particular in spot market trades, so the regulations include an option for producers to issue a notice to disapply and to step outside the framework for particular purchases when that suits both parties. Where the regulations apply and a written contract is in place, several key terms must be clearly set out. Most importantly, contracts must specify expected supply volumes and remedies if those volumes are not met. That was a major point of failure in the recent crisis I just mentioned, and the new requirement will give producers and processors greater certainty and stability.
The draft regulations also promote pricing transparency. We have been keen to protect and encourage transparent models in which prices are based on factors that farmers can verify themselves, such as market indices or shared cost of production data. Where prices are determined through internal or discretionary methods, additional rules ensure that farmers can understand how prices are set and raise concerns if needed. For many farmers, the ability to negotiate collectively, primarily through marketing groups, is a vital safeguard against imbalance. The regulations support that model, by ensuring that collective sellers benefit from the same protections as individual producers.
Other key provisions address fairness in contract termination and clarity around force majeure events. Although specific terms may still be negotiated, new restrictions help prevent one-sided practices, and contracts must clearly explain both parties’ rights and responsibilities in such situations. The core principle throughout this is that contract terms cannot be changed unilaterally. Any changes must be agreed in writing by both parties, ensuring transparency and fairness, while allowing flexibility.
We recognise that even with clear rules in place, disputes can still arise. That is why contracts must now include a clear dispute resolution procedure. That will give farmers clarity on how to raise concerns with the processor, and confidence that those concerned will be handled fairly and consistently. To ensure proper enforcement, oversight will be provided by the Agricultural Supply Chain Adjudicator—ASCA. Acting on behalf of the Secretary of the State, the ASCA can investigate alleged breaches of the regulations that have not been resolved through dispute resolution. If breaches occur, it has the authority to impose fines, order compensation, or both.
This statutory instrument is the second to make use of the powers in the Agricultural Act 2020 to improve fairness in supply chain contracts, following the Fair Dealing Obligations (Milk) Regulations 2024. It also makes a targeted amendment to those regulations. After implementation, we were made aware of unintended consequences relating to the rules on tiered pricing in exclusive supply agreements. For businesses with shared ownership structures, moving away from exclusivity is challenging, as exclusive supply is often fundamental to their operating model. To address that, we have made a limited amendment to the regulations to permit certain practices that were prohibited for those types of businesses.
In closing, I hope that I have demonstrated why these changes are both proportionate and essential. They respond directly to the concerns that we have heard from producers, and in a way that supports best practice, maintains flexibility and creates a fairer, more transparent market for the pig sector.
Daniel Zeichner
I am grateful for the contributions of knowledgeable and well-informed hon. Members. I am sure we can all agree that a resilient and sustainable pig sector that supports Britain’s food security depends on fair treatment across the supply chain, in particular for those in a weaker commercial position. I am therefore encouraged to hear support for the draft regulations. I am confident that they will deliver the protections needed to ensure a stronger and fairer future for the sector.
I am grateful for the Opposition’s support and perfectly happy to pay tribute to the previous Government and to my predecessors, Victoria Prentis and Mark Spencer. Victoria and I discussed the Agriculture Act over many hours, and it is good to see its provisions coming into effect. The hon. Member for Epping Forest chided me slightly on pace, but he will not be surprised when I point out that the gap between the Agriculture Act and the end of the previous Government’s term in office was about four years, while this Government have been in place for eight or nine months. We all understand why these things take time—in part, because it is important to get them right.
I also endorse the comments of the hon. Member for Bridlington and The Wolds. I pay tribute to him for his important piece of joint work between Government and organisations such as the National Pig Association. The praise he lavished on officials and farmers to get it in place was well merited and deserved.
The hon. Member for Epping Forest asked about the milk regulations. I do not think that any mandatory penalties have been issued, but I will go away and check. I think that the regulations are working as intended, but it is important to point out that we are making a strong commitment to keep these draft regulations under review and to make any amendments necessary. The fact that we came back with an amendment to the milk regulations demonstrates that the process is working.
On the poultry and fresh produce sectors, work is ongoing. I do not think it is a secret to say that the fresh produce sector is challenging—it is a complicated sector —and, again, it is important that we get it right and that we introduce regulations that work for the sector appropriately.
Finally, the hon. Member for Westmorland and Lonsdale missed no opportunity to raise the issue of the Groceries Code Adjudicator. I say gently that we also have the Agricultural Supply Chain Adjudicator—they are different jobs, different roles, and it is important to ensure that we support both of them in their important work. I am confident that they will be able to achieve the outcomes that we are all looking for. With that, I am hopeful that the Committee will agree the draft regulations standing in my name.
Question put and agreed to.