The beef sector could get its own voluntary code of conduct on farmer contracts, following a crisis summit chaired by Defra on Tuesday.

Farmers and processors had agreed to explore how such a code might work and what it could cover, and would report back in the autumn, said Defra farming minister George Eustice after the summit on 1 July.

Key areas for the code to cover could include measures to increase transparency in the beef supply chain, particularly around abattoir charges and changes to carcase specifications at short notice, he added.

The possibility of longer-term contracts between farmers and processors was also raised at the summit, Eustice said, but attendees’ views on these were mixed. “It was precisely those long-term contracts, tying farmers to processors, that caused problems in the dairy sector a couple of years ago.”

Defra called today’s summit in response to growing farmer concern about falling farmgate beef prices. “As I’ve been going round agricultural shows, it’s become very clear that this is a big concern,” said Eustice. “It’s the number-one issue raised with me.”

Prices had fallen because beef imports into the UK had increased, exports had gone down and there had been a fall in UK consumer demand for beef, Eustice said. There was also “some evidence” that retailers had not always passed on lower farmgate and wholesale prices for beef by lowering retail prices, he added.

NFU president Meurig Raymond welcomed the prospect of a code. “This is a positive step forward and something that we’ve been calling for,” he said. “We will also hold further discussions with the trade on the transparency of abattoir charges because our members regularly contact us on this issue.”

Origin labelling

In addition to a possible voluntary code for the industry, the summit also discussed the need for better country-of-origin labelling on processed foods, Eustice said, although he reiterated Defra’s position that it was not minded to legislate on the issue.

“We agreed that we – Defra – would look at what more we can do to encourage food processors to do origin labelling,” he said. “The retailers have got quite solidly behind origin labelling already, but it’s more difficult with some complex, processed products. We are clear that we support the principle of origin labelling, but we recognise there are difficulties with some complex, processed products.”

Research by the European Commission had suggested mandatory origin labelling could increase the cost of some processed meat products by as much as 50%, he said, adding “we must be mindful of not having unintended consequences”.

Further key action points from the summit included Eblex agreeing to look into what more could be done to identify and open up new export markets for British beef. There would also be a work stream on productivity, which would explore how genetics improvements to the UK beef herd – possibly including a database on sire performance – could help farmers get the best value out of their cattle.

All these work streams would also report back in the autumn, Eustice said.

Charles Sercombe, NFU livestock board chairman, also stressed the need for retailers to do their bit and stimulate demand for British beef. “We must increase demand for our product and we’ve said to retailers that they need to actively promote Red Tractor-assured British beef. I’m pleased that at the summit, retailers acknowledged the importance of clearly, unambiguously and accurately promoting British beef.”

Attendees at this week’s beef summit included Aldi, Asda, The Co-operative Food, Lidl, M&S, Morrisons ,Tesco and Waitrose as well as the British Meat Processors Association and a number of farming organisations, including the NFU.