Tesco's move to raise milk prices and work directly with dairy farmers looks set to open the floodgates for similar demands from other farming sectors.
Livestock farmers are already talking about securing retailers' support by the end of the year. Thomas Binns, the NFU's livestock board chairman, said Tesco had made the first move by publicly acknowledging that changes to the CAP since 2005 made it more likely farmers would quit unprofitable food production.
"We need to capitalise on this because it creates a better environment for talks with retailers," said Binns.
He claimed previous attempts by Tesco and Sainsbury's to offer direct contracts to producers had failed because the prices on offer were unsustainably low.
Tesco trading director Richard Brasher refused to rule out the possibility of direct contracts for livestock farmers. "We're not blind to the challenges in different parts of the agricultural sector," he told The Grocer.