Tasmanian potato farmers contracted to processor Simplot have reached an agreement on pricing for the upcoming season following nearly four months of negotiations. The deal sets the farmgate price at AU$460 (US$295) per ton, ending a standoff that led to a large growers' rally in Deloraine earlier this month.
The agreement also includes an incentive for supplying bruise-free potatoes. However, growers say that when accounting for rising input costs, profits will still be about 4% lower than last year.
Gawler farmer Stuart Applebee said it was "a bloody relief" to have the issue resolved, but criticised the company's communication. "It was the lack of communication from Simplot that was the biggest disappointment," he said. "As growers, we understand the pressure that Simplot and all processing companies are under. But for them to come out and announce a 36 per cent pay cut off our gross margin, and not communicate that, is pretty serious."
Applebee said the initial price offer caused uncertainty among growers. "There were a lot of phone calls from bank managers and finance companies asking farmers how they were going to sustain profits and what systems they had in place if they weren't growing potatoes," he said. "Looking back, the whole saga was unnecessary."
The new bruise-free incentive was introduced in response to storage issues that affected crop quality. Applebee said the problem was not entirely the growers' fault. "Back when we first started storage, conditions were hot and potatoes were dehydrated – hence there were a few bruising and storage issues," he said. "There's a bit of responsibility back on Simplot for putting potatoes into storage. But that also came from growers who had a lot of potatoes to dig and needed to do it, so they still weren't harvesting potatoes in August."
He said the incentive could encourage improvements in irrigation, crop nutrition, and soil management to reduce bruising. "Farmers might put a few things in place to make the ground conditions better to stop bruising that sometimes happens when potatoes grow in cloddy, rocky conditions," he said.
Applebee added that production costs remain a major concern. "It's horrendous if you see our bills now in comparison to what it was three years ago. Just to service a tractor or buy a piece of equipment that was $60,000 is now $100,000 when you're not actually making any more money out of your crops," he said.
Thirlstane grower Nathan Richardson said the negotiations revived concern about imported potatoes. During talks, Simplot had indicated it might import cheaper potatoes from countries such as India if local prices were too high. "We're not talking about protectionism, but we want to secure our industries," Richardson said. "It's going to be up to our elected representatives to find a pathway."
Source: Tasmanian Country
