Price cut for Simplot potato growers

A six percent cut in the price paid to Tasmanian potato growers by Simplot “is simply unacceptable”, according the chair of the Simplot Potato Growers Committee, Leigh Elphinstone.

Potato growers met in Deloraine this afternoon to discuss Simplot’s move to decrease potato prices in Tasmania for the next season.

“Growers, like all other farmers, have seen a continual rise in input costs that must be recognised by Simplot as they determine the agreed price for this coming season,” Mr Elphinstone said.

“It costs on average around $22,000 a hectare to establish and maintain potatoes, which is a significant expense and risk for growers, all of whom are family-based farmers.

“Add to this the volatility of global markets and supply chains for critical inputs such as fertiliser, fuel and essential chemicals and farmers are looking at a very marginal crop.

“Simplot’s demand for a 6 percent cut in price effectively is a 32 percent decrease in the gross margin for growers.”

TasFarmers CEO Nathan Calman also emphasised that other costs are also increasing that are out of the control of growers.

“Costs such as local government rates, insurance, fixed operating costs and the rise in registration charges for farm vehicles also compounds the issue for growers,” he said.

“Farmers can no longer be the sponge that soaks up price decreases and input cost increases. 

“If this trend continues it won’t be long before any sort of vegetable cropping for processing will become unviable, placing at risk the downstream processing industry in the state.

“TasFarmers urges Simplot to come back to the negotiating table with a sensible offer that represents a fair deal for farmers.

According to growers, Simplot is walking away from a gross margin model that’s been in place for several years and worked extremely well to balance out the peaks and troughs in the market while paying a fair price that covers overheads for farmers and affords them a living.