Nick Brown, the Minister of Agriculture, said at the National Farmers' Union annual conference at the Hilton Hotel in London that a situation where farmers and growers were selling their produce at prices that did not cover their costs was "not sustainable".
Mr Brown said the forum, made up of food experts, supermarkets, farmers and distributors, was a means of tackling tensions and prob- lems affecting "the food chain".
The group will include a senior member of the Ministry of Agriculture, as well as the NFU, the Food and Drink Federation, the Britain Retail Consortium and the Institute of Grocery Distribution. It will hold its first meeting next week.
Mr Brown added: "I am convinced that much could be achieved if all parts of the food chain could be encouraged to come together on issues of mutual interest and concern."
But Asda's chief executive, Allan Leighton, warned: "We don't need a code of conduct. The code that exists within businesses is one of common sense, and if that was changed it would sound failure for us all.
"In the past I don't think we have been as close to producers as we should have been, and the more layers there are between you, the more everything is open to interpretation."
A spokesman for the Tesco chain welcomed the new group, but added: "We would have to be very careful with any attempt to rig the price in a free market. We would have to consider the question of legality."
Richard Macdonald, the NFU's director general, said the forum would bring a vital opportunity for "constructive dialogue". He added: "The NFU's long-held belief has been that the future success of the UK food industry will depend on co-operation.
"The NFU has been working hard to forge greater co- operation within the food industry through regular meeting with key retailers. This initiative will build upon the links we have already established."Reuse content