A major UK government farming review has called for tighter supply chain rules and stronger supermarket sourcing commitments, warning that labour shortages and policy uncertainty are now the biggest barriers to profitable food production.
The Farming Profitability Review, published in December, argues that farmers and growers need clearer long-term signals from government and retailers if domestic food supply is to remain stable.
The review highlights access to labour as the single largest constraint on profitability, particularly in horticulture, where workforce gaps continue to affect volumes of UK fresh produce entering retail channels.
Supermarkets Named As key Demand Drivers
Supermarkets are identified as one of the main routes to rebuild confidence across the farming sector.
The review calls for higher and more measurable demand for British food through UK supermarkets, public procurement, food manufacturing, and out-of-home channels. It argues that growing domestic sourcing would help farmers sell more product, stabilise income, and reduce exposure to volatile export markets.
British edible horticulture was valued at £3.1 billion in 2024. The sector aims to increase domestic consumption and exports by up to 40%, but the report warns that this will not be achievable without closer coordination across the UK grocery supply chain.
Market monitoring is also flagged as a weakness. The review notes that farmers currently lack transparent data on volumes, imports, and input prices, making it harder to plan production and investment.
Push To Extend Grocery Supply Rules
One of the most direct retail-facing recommendations is a proposal to strengthen supply chain fairness.
The review suggests extending the Groceries Supply Code of Practice (GSCOP) beyond retail and into the out-of-home sector, which now represents roughly half of UK food sales by value. It also recommends expanding voluntary country-of-origin principles so that British sourcing commitments apply more consistently across foodservice as well as retail.
Origin labelling schemes linked to Red Tractor and similar assurance marks are described as central to maintaining trust and transparency.
Infrastructure, Planning, And Finance
Beyond retail rules, the review calls for reforms to planning and finance to unlock on-farm investment.
Recommendations include easier permitted development for reservoirs, renewable energy, and livestock buildings, alongside better access to finance and more effective use of tax reliefs. The aim is to give farmers confidence to invest in productivity, water security, and resilience.
Environmental delivery is also positioned as a potential income stream, provided private finance and nature markets are properly structured and regulated.
Why It Matters
For supermarkets, the review signals renewed political pressure to support domestic sourcing, transparency, and fair dealing.
For suppliers, it underlines that labour availability, planning delays, and uneven demand remain unresolved risks. Any shift toward stronger sourcing rules or expanded grocery codes would have direct implications for buying strategies, contracts, and long-term supply planning across the UK market.
