Agriculture Act 2020

Part 3: Transparency and Fairness in the Agri-Food Supply Chain

Chapter 1: Collection and Sharing of Data

Section 23: Agri-food supply chains: requirement to provide information

195. Subsection (1) provides the Secretary of State with the power to collect data, by requirement, from persons in, or closely connected with, the agri-food supply chain. The information that may be collected under this power must relate to that person’s activities that relate to the agri-food supply chain (colloquially known as "farm to fork"). Section 24 defines a person in or closely connected with an agri-food supply chain. A primary power is appropriate where the class of persons from whom information is to be required is a "known" class; for example, if they are readily identifiable and contactable.
196. Subsection (2) mirrors the power in subsection (1), except it is a power to make secondary legislation to collect information from persons in, or closely connected with, the agri-food supply chain. A power to make regulations is needed where the class of persons from whom information is required is not readily identifiable or quantifiable, or where it may be difficult to ascertain and contact them.
197. Subsections (1) and (2) clarify the territorial extent of the powers in this section as only applying to those activities taking place in England. Where a supply chain spans more than one of the constituent nations of the UK, unless an arrangement (formal or otherwise) is reached with the devolved administration/s in question, the intended information will not be able to be collected by the Secretary of State.
198. Subsection (3) refers to definitions.
199. Subsection (4) exempts the ultimate consumer (anyone who is only in the food chain because they consume the ultimate products) from the scope of the data collection powers.
200. Subsection (5) exempts any information which is subject to legal privilege from the scope of the data collection powers.
201. Subsection (6) states that a requirement to provide information under subsection (1) must be in writing i.e. that the Secretary of State must publish a requirement (on www.gov.uk for example) or write to the relevant person to require them to provide information.
202. Subsection (7) states that subsection (1) applies to the Crown.
203. Subsection (8) specifies that regulations made under this section are subject to the affirmative procedure.

Section 24: Meaning of "agri-food supply chain"

204. Subsection (1) explains that the definitions apply to the whole Chapter.
205. Subsections (2) and (3) define the "agri-food supply chain", and the persons in it. The agri-food supply chain may be colloquially known as "farm to fork" – from primary producers, through intermediary food processors to retailers such as supermarkets and ultimately individual consumers. The products in the agri-food supply chain include any plant products grown (cereals, fruit and vegetables) as well as animal products for consumption (meat, dairy, eggs) including plant and animal products taken from the wild (for example, truffles and venison).
206. Subsection (4) defines which actors are considered to be "closely connected" to an agri-food supply chain. This will include those persons (individuals and companies) providing either goods or services for use in the agri-food supply chain. In relation to animal products, this will include (but is not limited to) veterinarians (and any other persons providing animal health or welfare services), abattoirs and cattle markets. This category will also include those who supply inputs to the practice of agriculture, such as feed and fertiliser merchants, machinery merchants and those who supply general equipment.
207. Subsection (4)(c) sets out that information may also be collected from any person performing activities capable of affecting activities in the supply chain. This may include, for example, persons keeping animals (such as those in petting zoos, or hobby chickens) where those animals could be a risk to, or at risk from, animals in the food chain in the event of a disease incursion or outbreak. This is just one example of how a person could be "closely connected" to the agri-food supply chain.
208. Subsection (5) clarifies that the list of persons connected to the agri-food supply chain is not closed.
209. Subsection (6) contains definitions.

Section 25: Requirement must specify purposes for which information may be processed

210. Subsections (1) sets out that the provisions apply whether the requirement is made under the general power or through secondary legislation.
211. Subsection (2) ensures that every request for information must set out the purposes behind the request for collecting the data.
212. Subsection (3) has the effect that the purposes for which information may be required must be in, or be included within, at least one of the purposes stated in subsection (4). The information cannot be used for purposes that fall outside those stated in the requirement to provide information.
213. Subsection (4) defines the broad categories of purposes for which requirements may be made.
214. Subsection (4)(a) enables data to be collected to support persons in the agri-food supply chain to increase productivity and manage risks and market volatility. This section aims at assisting primary producers, for example by collecting data that enables benchmarking of farm performance.
215. Subsection (4)(b) enables data to be collected for the purpose of promoting transparency or fairness in the agri-food supply chain. This may include information that will be used to establish price or profit monitoring tools for a supply chain, or information required to combat unfair trading practices, which occur in agri-food supply chains.
216. Subsections (4)(c) and (4)(d) enables data to be collected for improving animal health, welfare and traceability, and plant, fungi and soil health and quality. This could include collecting data that enables improvements in the ability to detect disease incursions, monitor disease levels and animal welfare standards, and target actions to tackle disease, whether this action be taken by industry or government.
217. Subsection (4)(e) enables data to be collected for minimising adverse environmental effects (such as runoff from fertiliser or greenhouse gas emissions) which could also include assessing baseline levels of effects, and monitoring improvements or deteriorations.
218. Subsection (4)(f) allows data to be collected for minimising waste from agri-food supply chains, which may include food waste (products going out of date or unused off cuts) which could also include assessing baseline levels of waste, and monitoring improvements or deteriorations.
219. Subsection (4)(g) enables data to be collected for monitoring or analysing markets connected to agri-food supply chains. This may include general commodity price levels or sectoral output statistics, which can be used to inform the use of crisis management measures.
220. Subsection (5) references the definitions outlined in section 24.

Section 26: Requirements under section 23(1): duty to publish draft requirement

221. Subsection (1) states that the Secretary of State must publish a draft requirement before such a requirement is finalised. Subsections (1) (a) (ii) and (iii) stipulate the information to be included in the draft, including the deadline for comments. Subsection (1) (b) states that the final requirement may be imposed in either its draft or a revised form, based on the comments received in the published timeframe.
222. Subsection (2) states that the requirement may be imposed on a person at any time once the final drafting has been agreed.

Section 27: Provision of required information and limitations on its processing

223. Subsection (1) states that the provisions apply to requirements whether they are made under the general power or the power to set out requirements in secondary legislation.
224. Subsection (2) provides that information given in response to a requirement can only be used for the purpose that was set out in that requirement.
225. Subsection (3) stipulates that the requirement to only use information for the purpose for which it is provided apply to the first recipient of the information, and to anyone who subsequently receives the information. For example, a requirement for data may be issued for the purpose of "establishing demand level information" for a certain cut of meat. The authority may collect information about slaughterhouse throughput, which is then subsequently passed on to a different authority that collate the information to produce useable datasets. Both authorities would be obliged to only use the information for the specific stated purpose.
226. Subsection (4) notes that the purposes for which information can be used are subject to the restrictions on how information can be used, and in what forms it can be disclosed, which are stated in subsections (7) to (9).
227. Subsection (5) sets out that the requirement may detail matters including how, when, and to whom information is to be provided.
228. Subsection (6) establishes that the requirement, must set out the types of processing to which the information supplied may be subjected and the forms in which information supplied may be disclosed.
229. Subsection (7) sets out that information provided in response to a requirement may not be subjected to types of processing or disclosed in any form other than those specified in the requirement (unless the requirement specifies circumstances in which other forms of processing or disclosure may occur).
230. Subsection (8) sets out that, where there is a proposal for information provided under a requirement to be disclosed, that disclosure is subject to the conditions set out in subsection (9).
231. Subsection (9)(a) sets out that when there is a proposal to disclose information in a non-anonymised form, the person proposing the disclosure must consider whether the disclosure can harm the commercial interests of any person (meaning the person providing the information, or anyone else who may be affected by the disclosure of the information). Subsection 9(b) sets out that, if the proposer considers that the disclosure may be commercially harmful, then non-anonymised disclosure is not permitted, unless the Secretary of State considers there to be a public interest in disclosure.
232. Subsection (10) defines what is meant by "processing" information and lists types of processing that information may be subject to. This could include, for example, aggregating price data, making certain information accessible (to the public or a class of persons), creating statistics, and benchmarking certain performance-related data.

Section 28: Enforcement of information requirements

233. Subsection (1) provides the power for the Secretary of State to make secondary legislation to enforce data requirements whether those requirements arise under the general power or in secondary legislation. This means that requirements can be issued that contain information about the sanctions that will be applied in the event of non-compliance (if someone fails to provide information or provides false information).
234. Subsection (2) sets out definitions.
235. Subsection (3) clarifies that the provisions for enforcement will include details of how compliance will be monitored, investigated and addressed.
236. Subsection (4) details the matters that may be included in the enforcement provisions.
237. Subsection (4)(a) provides for the imposition of monetary penalties, which can either be a specified amount or an amount arrived at using a specified manner or calculation, or can be made by way of suspending or withholding payment.
238. Subsection (4)(b) provides that regulations may include provisions for recovering money by setting off debts against payments to be made or by requiring a security and may also include provision regarding interest.
239. Subsection (4)(c) states that regulations can be about providing advice or warnings.
240. Subsection (4)(d) provides for the regulations to enable the acceptance of undertakings.
241. Subsection (4)(e) enables regulations to confer functions on those enforcing the regulations.
242. Subsection (4)(f) enables regulations to set up review and appeal mechanisms.
243. Subsection (5) sets out that the monetary fines listed in subsection (4) (a) can be calculated using information relating to income, turnover or profits. This is so that fines may be calculated which are appropriate, and suitably dissuasive, for a broad range of operators.
244. Subsection (6) specifies that regulations made under this section are subject to the affirmative procedure.

Chapter 2: Fair Dealing with Agricultural Producers and Others in the Supply Chain

Section 29: Fair dealing obligations of business purchasers of agricultural products

245. Section 29 provides the Secretary of State with the power to make regulations to introduce obligations that promote fair contractual relationships between primary producers, Producer Organisations, associations of Producer Organisations, produce aggregators and the business purchasers of their products. As the issues faced by different farming sectors vary considerably, the section will enable sector-specific as well as general regulations to be made, to improve principles of fair contractual practice across the whole industry.
246. Subsection (1) empowers the Secretary of State to make regulations, including enforcement, imposing obligations on operators who buy agricultural products in the course of a business ("business purchasers") from "qualifying sellers" (defined in subsection (3)).
247. Subsection (2) specifies that the powers under subsection (1) must be exercised to promote fair contractual dealing.
248. Subsections (3) – (5) set out definitions for the purposes of the section. A "business purchaser" is defined at subsection (3)(a) as set out above, as a person who purchases an agricultural product in the course of business which includes the purchase of products of that kind. A "qualifying seller" is defined at subsection (3)(b). This includes a person carrying on an agricultural activity for the production, or in connection with the production, of the product. This category of qualifying sellers is intended to capture farmers and other primary producers. The other categories of "qualifying seller" are Producer Organisations and Associations of Producer Organisations, recognised under section 30 of the Act, and produce aggregators, insofar as they are not themselves Producer Organisations or associations of Producer Organisations. Produce aggregators are further defined at subsections (4) and (5) as purchasers from more than one qualifying seller which do not carry out any further processing of the product. "Processing" is defined at subsection (11) of the section and helps determine whether a business is a ‘produce aggregator’. The definition of produce aggregators in this section is intended to cover and protect smaller sellers who do not typically engage in thorough processing activities, rather than established purchasers who are more likely to hold a dominant market position.
249. Subsection (6) sets out examples of the kinds of obligations that may be imposed on business purchasers under the section. This includes obligations to:

• use a written contract (subsection (6)(a)). This will aid transparency and certainty for those sectors, such as dairy, where it is appropriate;
• include, or not include, a term in the contract dealing with a particular matter (subsection (6)(b)). This will ensure that key elements of the commercial arrangement are specifically agreed by producers, and is particularly useful in respect of pricing mechanisms that could otherwise result in hidden premiums and deductions;
• include terms that make specific provision (subsection (6)(c)(i)). This means that the Secretary of State can specify the content of the terms to be included in a contract – for example, that notice periods for varying the contract may not be less than three months;
• comply with a set of principles and practices that promote fair dealing (subsection (6)(c)(ii)). For example, if a contract includes an exclusivity section, fair dealing principles could require that qualifying sellers is not be paid less for surplus product than if they sold the surplus to a third party.

250. The list in subsection (6) is non-exhaustive. In certain circumstances, regulations under the section could also impose obligations which are not strictly connected to a term in the contract. These could be related to problematic behaviours which may typically occur before a contract is signed, or outside of the contractual agreement. As an example, a business purchaser may threaten a qualifying seller with commercial retaliation, such as threatening to remove the seller from their business’s approved supplier list in response to a qualifying seller querying the contract with a lawyer before agreeing to sign.
251. Subsection (7) provides examples of the types of terms that could be regulated through the contractual obligations imposed under subsection (6)(b) and (c).
252. Subsection (8) outlines the enforcement provisions which may be made under subsection (1)(b), such as investigating complaints and creating a robust appeals process. It is intended that obligations will be set out in sector-specific statutory codes, which will initially be introduced in the sectors where voluntary codes have been unable to significantly improve contractual relationships (for example dairy).
253. Subsection (9) provides the Secretary of State with powers to delegate authority to another person. This will be used to enable an independent party to consider appeals provided for under subsection (8)(d).
254. Subsection (10) specifies that regulations made under this section are subject to the affirmative resolution procedure.
255. Subsection (11) contains further definitions relevant to this section.

Chapter 3: Producer Organisations

Section 30: Producer and interbranch organisations etc.: application for recognition

256. Section 30 sets out the conditions that need to be met for groups of operators to qualify for recognition as one of three types of organisations. Much of the detail of the conditions is to be "specified" pursuant to regulations to be made by the Secretary of State under this section.
257. An organisation may apply for recognition as a PO under subsection (1) if it meets the conditions in subsection (2). The detail of these conditions to be specified will ensure that only organisations that meet the objectives of the PO structure will be eligible for recognition. For example, the conditions will ensure that the organisation is representative of the sector (or sectors) in which it operates, that it carries out activities that will improve the market position of its members, and that its members control it in a fair and democratic way. Once a PO is recognised, its members can collaborate in carrying out certain activities in ways that would normally be prohibited by competition law; these exemptions are set out in Schedule 2 by way of amendment to the Competition Act 1998.
258. Subsections (3) and (4) set out conditions which need to be met for a group of recognised POs to be eligible for recognition as an Association of Producer Organisations (APO). APOs are vehicles for even greater scale collaboration between producers in the same sector. An organisation may apply for recognition as an Association of Producer Organisations (APO) under subsection (3) if it meets the conditions in subsection (4), namely that all the APO’s members are recognised POs, and that the industry itself drove the formation of the APO. APOs enjoy very similar exemptions from competition law to those that apply to POs.
259. An organisation may apply for recognition as an interbranch organisation (IBO) under subsection (5) if it meets the conditions in subsection (6). IBOs are vehicles to enable greater vertical collaboration within an agricultural supply chain. They differ from POs and APOs in that they can include members from different stages of the supply-chain (so long as they include at least one producer member). Their activities are not usually focused on production or marketing, but on wider market issues, including research and development to improve the way that products are placed on the market, or to explore potential export markets. Because of the potentially far-reaching nature of an IBO’s activities, the agreements between its members can have particularly distortive effects on competition. The provisions regulating their exemption are therefore stricter than for the other types of organisation.
260. Subsection (7) provides that "unlawful activities" in subsections (2)(f) and (6)(f) includes a failure to comply with a duty, as well as breaching a prohibition.
261. Subsection (8) defines what it means for businesses within an IBO to meet the condition at subsection (6)(a)(ii), which requires the business to be carrying out activities linked to any one or more agricultural sectors.
262. Subsection (9) allows the Secretary of State to introduce further conditions, beyond those set out in subsections (2), (4) and (6), that prospective organisations would need to meet in order to qualify for recognition.
263. Subsection (10) requires the Secretary of State to specify in regulations the period within which an application for recognition under subsections (1), (3) or (5) must be determined.
264. Subsection (11) requires the Secretary of State to notify both the applicant and the Competition and Markets Authority when an application decision has been made. If an application is granted, this must be published online (on GOV.UK, for example).
265. Subsection (12) allows the Secretary of State to introduce further provision, by regulations, about the application process, which may include supporting evidence to be submitted, factors the Secretary of State will take into account when deciding an application, amending time periods or deadlines, application fees or provision about reviews and appeals.
266. Subsection (13) contains definitions.
267. Subsection (14) allows the Secretary of State to amend, by regulations, the list or descriptions of agricultural sectors listed under Schedule 1.

Section 31: Recognised organisations: competition exemptions and further provision

268. This section sets out the exemptions from general competition law, which are available to recognised organisations, and confers power on the Secretary of State to make further provision about recognised organisations.
269. Subsection (1) refers to Schedule 2, which amends the Competition Act 1998 to give domestic effect to competition exemptions framed in similar terms to those that currently exist in EU legislation. This is necessary because the exemptions are currently given effect by section 10 of the Competition Act 1998, which is going to be "turned off" when the equivalent retained EU legislation repealed, and a new domestic PO regime is introduced. The exemptions will allow the members of recognised organisations to collaborate in carrying out activities in ways that would normally be prohibited under general competition law, as long as the organisations comply with conditions intended to ensure that the benefit of their coordinated activities justifies any adverse effects on competition.
270. Subsection (2) allows the Secretary of State, by regulations, to make further provision about recognised organisations.
271. Subsection (3) provides examples of such further provision; including introducing further requirements or reporting obligations with which a recognised organisation needs to comply. These will ensure that a recognised organisation continues to operate in a way that justifies the freedom its members enjoy when operating outside of the normal competition rules and includes the power to make provisions about monitoring and enforcement.
272. Subsection (4) details the type of provisions that may be introduced under subsection (3), to monitor and enforce compliance with ongoing recognition requirements.
273. Subsection (5) specifies that the provisions introduced under subsection (2) may also include provisions regarding the ability for POs, APOs and IBOs to delegate some of their functions. In the absence of such provision, it would not be clear that a third party carrying out a recognised organisation’s functions benefitted from the competition exemption enjoyed by the recognised organisation in respect of those functions.
274. Subsection (6) contains definitions.

Section 32: Regulations under sections 30 and 31

275. This section makes provision about the regulation-making powers in sections 30 and 31.
276. Subsection (1) makes it clear that the Secretary of State can use the powers in sections 30 and 31 to delegate functions to another body, in particular the function of deciding applications for recognition. This will allow the Secretary of State to ensure that the appropriate body carries out the administration of the recognition regime.
277. Subsection (2) confers power on the Secretary of State to make regulations introducing sector-specific PO, APO or IBO rules, which could introduce additional or different conditions for recognition, or make other additional or different provisions. This would allow the recognition criteria to be tailored to the needs of a sector if the producers in that sector were experiencing particularly adverse market conditions. For instance, this would allow for the limits placed on the size of a PO to be altered, if market conditions warranted such a change.
278. Subsection (3) specifies that regulations made under sections 30 and 31 are subject to the negative procedure, unless either section 50(5) applies, the regulations contain new sector-specific provision, or the regulations amend Schedule 1. Subsection (4) provides that in these cases, the affirmative resolution procedure applies.
279. Subsection (5) requires the Secretary of State, before introducing any new sector-specific provision, to consult with persons who are representative of any agricultural sector to which the regulations will apply, or persons otherwise affected by the provision. This reflects the fact that sector-specific provision could substantially advantage or disadvantage a sector so there is a particular need for transparency and engagement.
280. Subsection (6) contains definitions.