Campaign groups are calling on Defra to pilot a fund that would help new food hub enterprises work with farmers for fairer returns.
The groups, which includes Sustain, the Sustainable Food Trust and the Soil Association among others, have sent a letter to Defra calling for the creation of 15 food hubs.
They are proposing a £5m pilot fund toward market research, building supplier relations, infrastructure, equipment, and kick-starting employment for new food hubs.
Food hubs are small and medium-sized enterprises that buy from local farmers and sell to local retailers. They also take on supply chain roles, such as sorting, packing, and distribution.
A key difference with ‘traditional’ wholesale is that they are built on strong ethical and sustainable values.
By investing in new food hubs across England, the groups said Defra could support "a new future" for the UK’s agri-food system that delivers for the environment and on food security.
This would include farmers getting fairer returns, as well as supply chains better withstanding global and domestic shocks.
Research has found that farmers often receive less than 1% of the profit made in the supermarket chain.
In a letter to Defra farming minister Mark Spencer MP, the groups said: "As you know, the UK’s food supply has experienced different pressures, including food shortages.
"Supporting a more diverse and local/regional supply chain would start to tackle some of these challenges.
"A £5 million fund would help these new enterprises invest in market research, building supplier relations, and infrastructure and equipment.
"This would support the UK government’s environmental and food security objectives, while driving innovation in the UK’s food system and supporting the best of British."