Long-running claim issue between veg processor and NFU Mutual over faulty steam peeler could result in lost contracts and jobs as pea harvest nears
A number of vegetable farmers in Norfolk have vented their frustration at not being able to secure pea growing contracts this season due to a long, drawn-out claim issue between a local vegetable processor and NFU Mutual.
Normally, at this time of year, pea growers would have contracts in place to give them the security to go ahead and source seed and fertiliser required to establish this year’s crop of vining peas.
However, the local vegetable processor that sanctions the contracts, AP East Anglia (APEA), is caught up in a claim issue worth around £2 million with its insurer, NFU Mutual.
The family-owned company is run by Neil Cranston and processes and freezes over 15,000 tonnes of vegetables a year. He says the claim delay has put the business under considerable financial stress, leaving it unable to justify the investment needed to grow peas with its contracted farmers going forward.
This has left the farmers with a dilemma. Not only do they lose out on a decent income from peas, but when switching to another crop, soil nutrients could also suffer since peas are considered an excellent rotation crop.
Steam peeler incident
The issue goes back to 2024 when an agent was tasked by NFU Mutual to carry out the annual inspection of a 10-tonne-per-hour steam peeler at the APEA factory to ensure it was fit for purpose and safe to use.
However, between the statutory inspection of 2023 and the one due in 2024, the steam peeler effectively blew up. This despite the fact it had been given a clean bill of health at all previous inspections by NFU Mutual’s agent. Thankfully, no one was injured.
Following the incident, which put sections of the APEA factory out of commission, the company contacted NFU Mutual to pursue a claim for damage and compensation.
APEA is claiming against NFU Mutual, which appointed the external agent, arguing that the agent’s inspectors were negligent in not identifying any problems with the steam peeler. The agent cannot be named for legal reasons.
That process initiated discussions between APEA, NFU Mutual and the external agent about who was ultimately responsible for paying the claim.
Ongoing dispute
A year and a half later, the issue is still not settled, creating issues for APEA and the local farmers.
NFU Mutual says it is not responsible for paying the claim, nor compensation, because the work was carried out by the external agent, even though that agent was contracted by the insurer to carry out the inspections on its behalf.
Cranston argues that all insurance policies were taken out between his company and NFU Mutual and that all payments for those policies were made to NFU Mutual, not the external agent.
Cranston said: “In October 2024 we suffered an extremely serious incident which resulted in us losing all production profit for six months.
“This has resulted in a claim now in excess of £2mn, split approximately 50 per cent in loss of gross profit, and 50 per cent in losses due to delayed compensation.
“In general terms, NFU Mutual has passed the responsibility of the claim to the external agent. However, we don’t accept that as it is NFU Mutual who is our insurance agent, who we pay thousands of pounds in premiums to each year. It is up to them to sort this out once and for all.”
Time running out
Local farmer Alistair Cargill, who runs Pitt Farms Ltd, had allocated 250 acres to grow peas this season contracted to APEA, but says time is running out to get the agreements in place before harvesting begins in June.
Cargill added that he will lose around £300,000 in lost sales of peas if he didn’t plant them, plus valuable nutrients from the vegetable in a crop rotation capacity.
He said: “We were very keen to sign contracts to grow peas with APEA this year, but frustratingly we haven’t been able to do so because non-payment of a claim means the company’s cashflow has been hit and they cannot guarantee pea contracts.
“This means we won’t be able to grow peas this year, and growers have been left hanging waiting on some form of resolution.
“If the issue isn’t resolved soon, pea growers will have to change their plans last-minute and plant something else, which isn’t ideal for any of us.
“APEA has a very good reputation, and we were looking forward to working with them for the first time. Of course, we will plant another crop but peas are such a good break crop for us in the rotation. I hope they can get it all sorted out.”
Job losses ‘almost inevitable’
John Purslow is an agronomist in the region that works closely with the pea growers. He said: “Around 30 farms could be affected if APEA cannot offer the vining pea contracts this season. With farmers income at the lowest for decades and prospects poor, the stability given by the peas was always a welcomed part of the rotation.
“Changing to an alternative crop at this stage in the year is extremely difficult being so close to the beginning of the season, with most alternatives already fulfilled by other farms.
“It also seems almost inevitable that this will lead to the loss of jobs within the vining operation as well. I have also been informed that other suppliers to APEA have been unable to supply root vegetables to the plant, and this market has been taken by Belgian imports. If the vining pea group ceases 2026, it will be difficult to see it ever starting again.”
‘No culpability for the incident’
NFU Mutual has stressed that this is not a claim on the insurance policy, but a claim in negligence related to engineering inspections.
The insurer’s spokesman said: “NFU Mutual is not the alleged negligent party and has no culpability for the incident and therefore is not the correct compensator for the claim.
“We understand that this has been a difficult time for APEA, and that is why we have been proactive in seeking to advance the claim and mediate between parties.
“This includes spending a significant sum on forensic engineering and accountancy reports, which ordinarily would be costs incurred by the claimant to support their claim, and convening all-party without prejudice meetings in order resolve the dispute as quickly as possible.
“NFU Mutual’s actions in seeking to support APEA, both as a mediator and in paying for essential reports, have actively worked to advance the claim and mitigate disruption caused to APEA.
“Any suggestion that NFU Mutual has caused a knock-on effect to farmers and growers in the area is therefore false and misleading.”
