Fair Dealing Obligations (Pigs) Regulations 2025

Baroness Grender Excerpts

Monday 12th May 2025 Grand Committee

[Baroness Coffey (Con)]

My Lords, I support these regulations but I have a few questions about them.

First, I give credit to the Government for bringing them forward. The gestation period of a sow is three months, three weeks and three days. This issue was first raised with me as an MP back in 2021 and the announcement was made in 2023, so heaven knows how many piglets have been born while we have been getting to this stage.

I want to get a sense of aspects of the contract and enforcement. So that noble Lords know, this came about during the Covid times, when we started seeing a shrinkage in the number of abattoirs. Farmers were starting to be constricted in which abattoirs were open. It was largely the large abattoirs, although not exclusively. As a consequence, farmers saw that, all of a sudden, prices changed, and it was take it or leave it.

There were further issues, and I will ask a question about size. Contracts were being written in a different way about the size of the pig that was being taken into the abattoir and whether it was slightly over in weight—obviously, while you are waiting for the pigs to go into the abattoir, they keep being fed. Farmers I knew were getting 10% of what they had expected, never mind the cuts that were being brought in.

I am conscious that it is very difficult to write the contract; we can see how long this one SI is in trying to reach the principle. On the review that is set out in the regulations, will the Minister perhaps share with the Farming Minister some thoughts on how the contracts are formed at the moment, to see how we start to accommodate for that? If we are getting into a particular situation, we might end up with the cancellation of the receipt of the pig in a way that forces a different way in which farmers are not properly compensated.

The first person who brought this up with me was the marvellous Jimmy Butler of Blythburgh Pork. I see my noble friend Lord Deben is here—we both know Jimmy well. Of course, there are other great pig farmers. On the Suffolk coast, there is Dingley Dell, with the Hayward brothers, and there are many more around the country, as we have already heard. The threat of blacklisting was very real, and it is why we went to Victoria Prentis—who will soon be introduced to this House—which brought about the July 2022 consultation.

Who will undertake enforcement of the regulations set out today? The powers are attributed to the Secretary of State, but, as the Minister will know, we have seen, sadly, breaches of animal welfare just in the last month in an abattoir the name of which I have forgotten, and in other abattoirs as well. Often, these abattoirs want help from the Government, who are not always listening when we go to them for help for farmers. Will it be the Food Standards Agency, which probably has more interaction with abattoirs than any other part of government, bearing in mind the regulations and the listening? It would be useful to understand who is lined up to do that.

I am also quite keen to understand this: at one point, there was consideration around referring the number of abattoirs that were there to the Competition and Markets Authority. I am sure that this will have been considered, bearing in the mind the regulations laid out today. I appreciate that the Minister is not formally responsible for farming but, if she has anything on that, I would be grateful to hear from her now or by letter.

I have a final point. The concentration of abattoirs has happened, as I say, for a variety of reasons, and I do not want to get into the animal welfare issues in that regard. It meant that the previous Administration set up a small abattoir fund. That came to an end in September last year. I would be grateful to have an understanding of that. Again, I appreciate that this is not directly in the regulations, but it could inform in due course the review that is under way on effectiveness of the provision of that funding. I am conscious that it was a difficult decision for the Farming Minister today, in an announcement made in a Written Ministerial Statement, to reopen SFI 24 for farmers who had started their application. I think that, in the review, it would be useful to consider whether the expansion of abattoirs has actually happened. It is vital that, whether mobile or small, we try to make sure that there is a healthy market in this country.

As I say, I applaud the Government for finally bringing these regulations forward. They will be much welcomed, but there are still a few details on which I would be grateful to hear from the Minister.

[Baroness Grender (LD)]

My Lords, my thanks go to the Minister for her explanation of this statutory instrument, which we in the Liberal Democrats support. It represents a positive and necessary step towards addressing the deep-seated issues of fairness and transparency that have plagued our vital, world-leading pig sector. It is a welcome change in the wake of the painful crisis that gripped this industry from 2020 to the spring of 2023—a period marked by, as we have heard from other noble Lords, the Covid period, acute Brexit-induced labour shortages at processing plants, and soaring feed and Putin-induced energy costs outstripping farm gate prices and pushing producers to the brink. The statistics are stark, with losses exceeding £750 million collectively, as well as that awful period when more than 60,000 healthy animals were culled because they could not be processed.

Although the pig sector has a history of volatility, that particular crisis exposed a critical weakness at its heart: a risk/reward imbalance underpinned by commercially unclear and potentially harmful terms, especially for smaller producers, hindering their ability to budget, manage price fluctuation or invest for the future. These regulations are rightly designed to address this imbalance. They mandate written pig purchase contracts between buyers and sellers, setting out clear rules for pricing, contract duration and dealing with market fluctuations. This framework is crucial in rebuilding for them security, clarity and fairness.

The instrument makes necessary amendments to the Fair Dealing Obligations (Milk) Regulations 2024, addressing the unintended consequence described by the Minister that impacts on businesses with an internal democratic structure—typically co-operatives—and allowing for volume-based or tiered pricing in that specific context. We urge Defra and the Agricultural Supply Chain Adjudicator, which will enforce these regulations, to monitor this amendment closely to ensure that it is applied in the true spirit of internal democratic structures. I thank the National Farmers’ Union’s dairy team and the National Pig Association for their valuable briefings on this issue, which have informed our understanding of it. They have asked for specific reassurances on this issue.

While these regulations are welcome and necessary for the pig sector, they highlight a broader need. The Groceries Code Adjudicator was introduced—we are very proud of this—by the coalition Government. It was taken directly from the Liberal Democrat 2010 manifesto, but we regret that its powers to enforce were not sufficiently established when we left Government in 2015, and it still comprises only a handful of people.

Given the clear and continuing power imbalance between producers, processors, supermarkets and the food service sector, does the Minister have any plans to enhance the enforcement powers and capacity of the GCA, given that it is the potential referee in the supply chain? Indeed, will she consider the need for the GCA to be able to intervene in deals between farmers and processers, not just those directly linking to retailers? Producers must be able to raise issues, and we believe that anonymity is vital, given the potential fear of repercussions. We believe that third parties such as the NFU should be empowered to raise concerns and truly hold the more powerful parts of the industry accountable, so the adjudicator therefore needs some more effective tools.

As ever, I thank the Secondary Legislation Scrutiny Committee for its scrutiny of these matters. It would be interesting to get some clarification from the Minister on an issue raised by my noble friend Lord Pack, which was also in the committee’s report. It said:

“Defra has used a specific definition of what constitutes an electronic signature, rather than using or cross-referencing to what we understand is the more standard definition under section 7(2) of the Electronic Communications Act 2000”.


In other words, there is some kind of different use of electronic signature here. That is a technical query that it would be great to understand. The committee continued, saying that:

“The Department was unable to explain … the rationale”.


I am having a second go at that question, and I thank the Minister in advance for even struggling to find the answer.

Finally, we must avoid simply passing this SI and then moving on. Regulations such as these need to be subject to regular review to ensure that they remain fit for purpose. The flexibility within this SI must not be abused, and the Government must ensure that these regulations genuinely work for an industry of which we can rightly be proud.

[Lord Roborough (Con)]

My Lords, in speaking to these regulations, made under Section 29 of the Agriculture Act 2020, I draw attention to my entry in the register of interests, in particular as a dairy farmer and landowner. This is the second use of these powers following last year’s regulations in the dairy sector, and I am most grateful to the Minister for introducing this SI today.

These regulations represent a step towards rebalancing commercial relationships in the pig sector. For too long, small and independent producers have operated under contracts that lack clarity, fairness or enforceability. Many have found themselves at the mercy of buyers wielding considerable market power and facing reductions in volume, unilateral contract changes and dishonoured pricing agreements. These practices have created uncertainty and risk at the farm gate, and undermined confidence across the supply chain.

As the Minister outlined, the instrument requires that all contracts between qualifying sellers and business purchasers be in writing and include transparent pricing terms. It prohibits unilateral changes to contracts, mandates dispute resolution mechanisms and sets clearer parameters around termination clauses. These provisions will enable producers to request a written explanation of how prices are determined if not based on objective and accessible criteria. The Minister also highlighted the usefulness of the notice to disapply in agreed circumstances.

The need for such reforms has been well evidenced. Our previous Government’s 2022 consultation received 374 responses, of which 89% supported mandatory written contracts and 64% said existing agreements were not consistently honoured. These regulations reflect this feedback and follow a constructive sector-specific approach.