Tesco has struck two-year contracts with 200 British lamb farmers.

The contracts have been arranged through processor St Merryn, part of 2 Sisters, and the lamb will be used in Tesco’s Finest range between April and December.

“We hope these contracts will play an important part in giving sheep farmers the confidence they need to invest and plan for the future,” said Richard Marris, commercial director of fresh foods.

The lambs in the scheme will be born and raised on Red Tractor-assured farms and all farmers will form part of the Tesco Sustainable Lamb Group. They will be paid a premium above the market price for lamb.

Tesco said it would look to extend its two-year contract offer to more farmers in the coming months.

In December last year, Tesco announced it was “formalising” two-year contracts with 100 beef farmers through St Merryn.

Tesco promised closer and longer-term relationships with its supplying farmers in the wake of last year’s Horsegate scandal. One of its four major post-Horsegate promises states: “Working directly with farmers and growers is key to our new approach. We will build upon our existing Farming Groups and offer contracts with a minimum period of two years to all our suppliers who want them.”

“This commitment from Tesco to Welsh lamb will help us develop our business as we know that the premium has been guaranteed for the next two years,” said Warren Davies, who supplies Finest lamb from his farm near Abergavenny.