Tesco announces new three year contracts worth £12m to help potato growers

Over the past two decades, the number of potato growers across the country has fallen by over 85 per cent from 14,000
Over the past two decades, the number of potato growers across the country has fallen by over 85 per cent from 14,000

Tesco has announced it will issue contracts worth £12 million over three years to help support British farming.

The retailer has become the first in the UK to introduce new long term contracts for potato growers and packers.

According to Tesco, the contracts will "help to safeguard the future of UK farmers who supply the supermarket and provide customers with the best quality produce."

Through the Tesco Sustainable Farming Group - Potatoes (TSFG-Potatoes), growers are expected to benefit from smoother financial certainty, allowing them to invest more in their businesses.

The TSFG-Potatoes will be made up of a collection of producers and industry experts from across the country, and will aim to build stronger relationships through the whole supply chain.

The group also aims to take pressure off British potato growers, who are faced with the challenges of difficult growing conditions, declining consumption and an increasingly volatile market.

Bringing more confidence back to the sector

Matt Simister Tesco’s Commercial Director for Fresh Food said: "Whilst there isn’t a single simple solution to resolve the uncertainty faced by many potato growers, it’s important that we all play our part.

"These new contracts will help to bring more confidence back into the whole potato supply chain and build a truly sustainable British potato industry."

Under the new scheme, from September, producers will be given direct contracts with Tesco and a three year rolling commitment which will guarantee in advance, the volume of the crop that the supermarket will buy.

TSFG growers will also receive a price based on their production costs, which will take into account inflation, farming inputs like the cost of fertiliser and the additional expenses involved in growing the produce.

By developing a structure to guarantee a fair price for their produce, Tesco says it hopes the scheme will "pave the way" for other retailers to work "more collaboratively" with growers, and "help secure the future of the British potato industry."

'Collaboration can work'

NFU Horticulture and Potatoes Adviser, Lee Abbey, said: "The NFU welcomes initiatives that provide a greater level of security, confidence and transparency to growers and we’re pleased that Tesco has followed through its commitment, first announced at the NFU conference in 2014, to develop a dedicated potato contract.

The Tesco Sustainable Farming Group is a great example of how collaboration can work and it fits very much within the principles of the NFU’s Fruit and Veg Pledge. We hope growers are able to benefit from this new approach."

Potato grower Crawford Black from Fife, Scotland said: "These new three-year rolling contracts will give my family business more confidence to look further ahead, make plans and invest for the future."

Over the past two decades, the number of potato growers across the country has fallen by over 85 per cent from 14,000, as an unpredictable trading environment, poor harvests and producers leaving the industry in favour of alternative crops.