Supermarkets were today ordered to sign a new code of practice to protect farmers and other suppliers.

Trade and Industry Secretary Stephen Byers stepped in to stop food giants like Sainsbury, ASDA and Tesco using their buying power to bully suppliers.

He took the action after the Competition Commission identified three areas where competition between supermarkets was distorted and against the public interest.

Overall, it concluded the industry was "broadly competitive" and prices and profits were not excessive.

But it was concerned about the relationship between supermarkets and their suppliers including farmers.

The Commission found 30 practices by the larger supermarkets which adversely affected the competitiveness of suppliers and distorted competition.

It cleared supermarkets of failing to pass on cost reductions at the farmgate to consumers.

But it said their buying power had meant cost increases in the supply chain had hit farmers disproportionately.

Ryedale Tory MP John Greenway warned that many farmers were getting less for their produce than the cost of production.

He said: "Farmers I have met this week are deeply concerned about the buying power of the big supermarkets.

"Whether this code of practice will make a difference remains to be seen."