In response to campaigning by the CLA and its industry partners on the issue, the Association said the announcement by Competition Minister Jo Swinson meant farmers and other producers should be able to rely on a supermarket ombudsman with "bite" to enforce the Groceries Code.
However, CLA President Harry Cotterell sounded a note of caution.
He said: "Under today's announcement, fines will only be imposed on supermarkets as a 'last resort' and large retailers will be permitted to appeal against fines which would then lead to protracted legal battles.
"Giving the Adjudicator powers to impose financial penalties on large retailers without having to go through the Secretary of State for approval is an extremely welcome move. Now it is up to Adjudicator to ensure this works in practice and the supermarkets do not ride roughshod over the new system."
He added: "Supermarkets have got away with unfairly treating suppliers for too long. An ombudsman with bite is really needed to boost economic growth and ensure fair treatment for farmers."
The Adjudicator is being set up through the Groceries Code Adjudicator Bill which is currently passing through Parliament.
Click here more information on today's announcement from BIS.