Australia: Potato surplus deal sends right signal to industry

A first time program between potato growers in Tasmania and wholesaler and processing company Simplot, where Simplot will accept an additional 5% surplus above agreed quotas, has hopefully sent the right signals to industry. 

The Simplot Agricultural Services team and Processing plants are there to help manage and develop increased yield, according to Tony van-der-El, Executive Supply Chain Director for Simplot. “It’s a new program, very much still in its formative stages,” he told Fresh Plaza. “We sit down every year to negotiate with our potato growers, we probably deal with about 150-160 growers altogether.” The ABC has reported that Simplot will accept an additional 4000 tonnes of potatoes from around 20 plus growers under the agreed ‘productivity clause’.

This year in particular the low Australian dollar helped negotiations, conducted with the Tasmanian Farmers and Graziers Association. “With the dollar where it is it protects us, to a degree, from imports,” said Mr van-der-El. Ordinarily growers would be forced to dump excess above agreed contract amounts. “They’d normally be competing with cheap international imports at this time of year.” The news comes as fresh market potato growers in Thorpdale are dealing with a surplus yield in many cases, and selling for below the cost of production.

Negotiations become more important when the yield is as large as what potato growers have had this year, according to Mr van-der-El. “We have a strong relationship with our growers to manage these situations,” he said. “We do around 280 000 tonnes of potatoes in Tasmania, and we have a plant there. We’ve got to make sure we keep that plant full. At the same time you can imagine if every grower produces a surplus, that’s a lot of extra tonnage we have to deal with.”