Unfair, off-limits and outrageous. Peter Kendall's view of supermarket practices is blunt. But when we meet I don't find the NFU chief wringing his hands in despair and fury at the plight of farmers under the big four.

Kendall has been telling the Competition Commission the way it is, from the union's point of view. And he is optimistic. The Commission, he says, is listening.

"They acknowledged our problem. We've given the Commission plenty of examples of unfair practices and their impact on agriculture."

His case has been boosted, he believes, by supermarkets' admission to the Commission that they do sell below cost.

"It's outrageous. I hate this idea that we should brag about the cheapness of food," he says.

Kendall's submission to the Commission in August included "plenty of new evidence" that retailers are crushing farmers. "Our talk was about highlighting increasing underhand activity.

"Particularly when retailers are coming to declare profits, they start asking for money for this or that promotion. Retailers will say they have plenty of examples where people are building sustainable businesses on the back of relationships with supermarkets. But that doesn't (always) mean it's good practice."

The code of practice doesn't work, says Kendall. What he wants from the Commission is policing of the supply chain, although he prefers to use the word 'auditing'.

"The fear factor will never go away. Whether you've been dumped by a retailer and are looking to replace your business elsewhere, you're never going to get around that element of fear and concern. That's why I want to see the proactive auditing of behaviour and business practices."

Kendall, who is eight months into his role as NFU president, may have another powerful ally in farming's corner. He feels there is a meeting of minds with David Miliband, the latest secretary of state at Defra.

The pair have, apparently, been singing from the same hymn sheet about a positive role for agriculture in the British economy. Miliband, he says, agrees that farmers are not just park keepers.

"He thinks farming can play a really positive contribution. And if my upbeat look at the industry has helped, it's an enormous step forward."

Kendall dismisses concerns that auditing would introduce yet more red tape. He also ducks the question of financing such a regulator, although he admits it could be costly.

He is proposing a carrot alongside such a stick: he wants to publish an ethical league table that ranks retailers according to sustainability of their sourcing. It would take account of food miles, welfare standards, environmental measures and equitable trading policies.

The idea is being researched by the NFU, but Kendall recognises that it would have to be independently run to carry any weight. It would cost farmers and the government money. But he says the time is right because people are becoming so interested in the stories behind their food.

He is also keen for farmers, for their part, to deliver on the moral high ground.

Sustainability is at the heart of ­Kendall's ambitions. He is visibly enthused by bio­fuels and is a strong advocate of ethical practices. And he does not wish to be seen as a supermarket basher and doommonger in the old mould.

His conversation is upbeat. He acknowledges that supermarkets give consumers and shareholders a good deal. The trick is to find a way to hold up good practice as an example. "Supermarkets do get people wanting to shop there; they are very successful and are good businesses. And farmers are generally up for change, despite a slight dichotomy between ages. It's about learning to manage change."

But he thinks retailers have to take their responsibilities more seriously. They need to give suppliers the confidence to invest - although ironically meat and cereal prices are better this year.

"At present, even highly professional producers are quitting because they think their capital can do more for them elsewhere."

He urges retailers to follow the lead of Marks & Spencer and Waitrose, describing them as shining examples of businesses establishing long-term relationships with farmers and growers. Some of the biggest players will regret being slow off the mark, he warns.

He points to the dramatic decline in the British pig industry and says retailers should do more to educate consumers on the welfare and environmental aspects of food.

"If consumers were at that point now, then Waitrose would be Tesco and Tesco would be Waitrose. They're not there yet, so they need help."

Retailers should also seriously get behind supporting farm assurance when farmers have to jump through so many hoops to get it, says Kendall. "If that isn't important to retailers, then they should come out and say it. It goes back to the beef from Brazil. Building supply chains that depend on product many miles away is absolutely crazy. Retailers must realise that sourcing globally is not a smart thing to do.

"I don't think it would cost retailers or consumers very much to send the right welfare and production signals to farmers; otherwise consumers' perceptions of how their food is produced will be adversely affected. And if retailers don't send the right market signals now, then we'll get the wrong outcome, losing the critical mass of large chunks of our industry.

Farmers are not asking for special treatment, says Kendall, just an honest and realistic engagement with the supply chain.

Closer links are needed between farmers and customers. "When I go to see any part of the food chain I urge people to look after their producers. Look after your supply base and develop these long-term supply arrangements."

If the chain works more closely, that should result in better prices and security for farmers and a product better tailored to what processors want.

Kendall cites the contract between grain marketing co-op Centaur and Warburtons, where solid forward contracts have revived a near obsolete wheat variety, Hereward, and given the baker unique traceability and a point of difference.

But Kendall is quick to insist that niche contracts are not the future for British producers. "What we need is support for the mainstream. We need core British agriculture to receive this long-term commitment; otherwise we lose the whole processing sector between farmer and retailer." n


Is the job tougher than you expected?

"For me, as a practical man, some of the meetings are challenging. I've also got three small kids and I don't get home often enough. But it's an exciting time for farming. We're moving from 20 years of farming being seen as not very important and a bit of a pain in the arse to bringing that pendulum back and saying farming matters."

Was Unilever right to oppose biofuels on cost grounds?

"The Unilever stuff is absolute nonsense. I remember oilseed rape fetching £320/t - and now Unilever starts jumping up and down saying it's expensive at £180/t. They're dealing with branded product and to say they're going to be squeezed out of the market is rubbish."

Can farmers afford the NFU's new headquarters?

"Stoneleigh is a brilliant showcase for British agriculture. It cost £7m to build and I think people will look at the building and say 'I want to get involved'."

Is local food the saviour of British farming?

"Local food is a fantastic sign of people's growing concern and interest in food. But no-one has clearly defined where local starts and finishes. The challenge is to find a way of distributing that food, after 40 years of growing specialisation."

Do you support direct action by farmers?

"I understand how farmers feel and I support them demonstrating peacefully. But I want people to think of farming as a big, exciting industry. I've tried to work closely with the Tenant Farmers' Association and the Country Land and Business Association on individual issues - I want to pull the industry voice together."