A committee of MPs has blamed supermarkets for encouraging the illegal use of cheap immigrant and criminal farm workers.

The MPs say pressure from supermarkets for cheap goods is forcing farmers to turn to gangmasters for cheap labour.

The environment, food and rural affairs committee also criticised ministers for their "woefully inadequate" response to the problem.

A spokeswoman for Defra told ePolitix.com: "We recognise the seriousness of the abuses of the law and of workers' rights highlighted in the report, and are determined to tackle them.

"The government is working with several organisations including agricultural labour providers, supermarkets and the Ethical Trading Initiative to draw up a Code of Good Practice for those who supply agricultural labour, and to devise an accreditation system for those who abide by these standards.

"The committee's report focuses on agriculture and horticulture but the abuses identified are part of a pattern of unlawful activity affecting many sectors of the economy. The government is already taking action to combat these problems, for example, on illegal working, by strengthening the powers of the Immigration Service to enter businesses and search records in the Nationality, Asylum and Immigration Act 2002.

"Inland Revenue teams are currently in the process of recovering £4.3 million in unpaid tax and National Insurance contributions from gangmasters from last year. We are constantly seeking to improve performance and are evaluating current initiatives."

Andrew George, food and rural affairs spokesman, for the Liberal Democrats, said: "This damning report confirms that the government is turning a blind eye to the scourge of 'gangmasters'.

"Supermarkets place inexorable pressure on farmers and small producers, forcing them to find cheap, short-term labour anyway they can.

"The government must recognise that without the part-time, migrant workers many struggling farmers would fail to harvest their crops. These workers provide an invaluable service to British agriculture and must be given the same rights that British workers enjoy."

Forum Response: British Retail Consortium

Richard Ali, director of food policy at the British Retail Consortium, said: "Retailers are committed to fair competition and take a responsible attitude to the ethical operation of the food chain.

"As well as adhering to all UK and EU legislation retailers have introduced procedures designed to prevent the use of illegal practices within their supply systems, such as the use of 'Supplier Approvals'; utilizing the codes developed by the Ethical Trading Initiative; requiring their suppliers to use only government approved agencies when employing staff, and issuing reminders to producers of their legal obligations."

"Food retailers have done more than any other part of the food chain to promote good practice in supply chains, but neither supermarkets, convenience stores, caterers nor restaurateurs should be expected to act as an on-farm police force. Ultimately government must accept responsibility for enforcing employment, immigration and asylum laws."

Forum Response: Country Land and Business Association

Dr Charles Trotman, rural economy adviser at the CLA, said: "The EFRA select committee report on gangmasters is a damning indictment of the supermarkets' practice of squeezing the life out of suppliers. What is the point of having an existing code of practice which does nothing to curb supermarkets' power and only has the four main retailers as signatories?

"We are calling for the government to appoint an independent ombudsman to ensure suppliers will be protected from the aggressive purchasing tactics of supermarkets. Launching yet another code of practice to deal with the problem of cheap gang labour, when the code will be drafted in consultation with supermarkets, is simply pie in the sky."

Forum Response: National Farmers' Union

Michael Paske, vice president of the NFU, said: "Although we welcome the contents of the report, we do feel the committee has missed an opportunity and the recommendations do not go far enough.

"The NFU will continue to work through the Ethical Trading Initiative to tackle problems associated with gang labour and most importantly to achieve a properly resourced and policed registration scheme."