Australia: Potatoes maintain key role in Tasmania with new Simplot deal

Frozen French fry maker Simplot has agreed to pay its Tasmanian potato suppliers 5 per cent more, phased in over the next three years.

The new contract was negotiated by a growers’ collective bargaining group, headed by Scottsdale farmer Trevor Hall.

"There are a few points to it, it’s a three-year contract," Mr Hall said.

"Simplot have offered a supplementary payment for the harvest we’re currently doing, due to adverse conditions, and that’ll be $320 a hectare.

"That’s for the crop that’s being pulled out of the ground now, so that’s classed as a supplementary payment.

"Then we’ll start a three-year contract for the next planting in spring, which will see a price increase of $7.50 a tonne, then a year after that $5, and the year after that a price increase of $2.50 a tonne."

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The new contract ends a period of uncertainty for processing potatoes in Tasmania, when declining terms of trade and wage demands took a toll.

It was ratified by 60 growers at a meeting in Deloraine.

Mr Hall told the meeting Simplot intended to maintain its current cropping area in Tasmania until 2019, but its plans to upgrade the Ulverstone factory had not been confirmed.

He described the gains as "modest" but said the deal provided stability to growers who were contending with declining demand for poppies, pyrethrum and milk.

"It adds stability to the industry, because you know what price you’ve got three years out," Mr Hall said.

"You’re not growing on a one year crop, to re-invest in a new harvester, irrigator, or buying water, which there’s been a lot of that done.

"It gives some sort of stability that you’re not going to receive a sudden price drop."

Last year McCain Foods announced it had committed $10 million to expand its potato processing operation at Smithton in Tasmania.