Spud growers stand up to Simplot

Nearly 80 percent of the state’s potato growers met at Deloraine today and unanimously rejected individual, incomplete contracts offered by Simplot and demanded the frozen chip processor return to the negotiating table.

About 200 farmers were briefed by TasFarmers’ Simplot Potato Committee and discussed next steps in what is shaping up to be a tense stand-off with the US-based multinational.

They were united in their fury over what appears to be a hurriedly orchestrated two-page letter delivered to some growers in recent days asking them to accept volumes and varying but substantial cuts to the price per hectare paid on four potato varieties that will be grown this season.

The letter asked them to sign a draft contract that had yet to outline any changed commercial arrangements, meaning farmers didn’t actually know what they were signing up for.

Some farmers have been given three more days, until August 21, to sign the contract with the threat that it will expire on September 1, potentially leaving them with no buyer.

There was confusion as to whether the contract was binding for those who had already signed if any new deal was struck as a collective.

In the meantime the Potato Committee has engaged global lawyers, put in enquiries to the Australian Competition and Consumer Commission and crunched the new numbers on the offer from Simplot which will effectively result in a 57 percent reduction in return compared to two years ago.

It also secured a new draft of the contract yesterday showing that potato size could be capped at one kilogram, insurance liability has been moved from sub-contractors to growers when it comes to delivery and storage and farmers could also be held liable if there is a shortfall in supply due to adverse weather and for any recall of chips with latent defects long after they’ve left the farm.

Prices were calculated based on tonnes and not price per hectare and pre-payments could be delayed by a month.

Potato Committee chair Leigh Elphinstone, who grows spuds at Sisters Creek, said Simplot is wanting to execute a new grower agreement with new terms and conditions but “there’s a lot in there that’s very grey and we don’t understand exactly what liability that will put onto farmers”.

“I’m quietly confident that they will come back to the table and hopeful that they will ease the pressures on individual farmers to be signing any document until they fully understand what they are signing,” he said.

Mr Elphinstone said if their plea is ignored the pressure will be ramped up.

“These bullying tactics are just unacceptable - let’s hope common sense prevails.”

The Committee has set up a meeting with Simplot’s biggest customer, McDonalds, which pushes the message of using locally grown produce and other big consumers, Coles, Woolworths and KFC are also being lobbied to support the local industry as Simplot threatens to import cheaper product from other countries.

Planting of early spuds will start in about two weeks’ time if the weather is suitable to get early volume for the factory and a February harvest, with the main season kicking off in early October.

The price being offered following initial negotiations is a 2.5 percent price cut on last year coupled with a 7-8 percent rise in costs. 

“Basically Simplot is just trying to get the lowest possible price per tonne of potatoes,” Mr Elphinstone said.

“What we do have on our side is that the excess European potatoes that flooded the market in recent years is not relevant this year because of extreme drought conditions and the collapse of its potato crop.

“In England they can’t get a potato out of the ground that you could cut a French fry out of  - the surplus is gone so the crop we’re about to plant won’t have that competition.”

However Simplot US management said in a meeting that it was unfazed as “Argentinia, India and China are having a good season”.

Farmers in the room agreed that they were afraid to speak publicly in case there were reprisals.

One farmer who spoke from the floor said he was concerned about liability for latent defects, saying it was “alarming” that he could be held financially responsible for an issue discovered  long after the product is delivered to the factory.

Another farmer spoke about the mental toll that ongoing uncertainty was taking on him and other young farmers

“Farmers want to start planting next month - but I wouldn’t plant without knowing what was actually in the contract - it’s bullshit,” he said.

“My concern is that smaller growers will feel compelled to sign it for fear of missing out.”

Growers unanimously endorsed the following motions:

1. Simplot  potato growers demand that Simplot meet with the negotiating committee within four days from Tuesday 18th August 2026, to clarify the contracts’ terms and conditions of the Potato Supply Agreement (2026-2027).

2. The two page letter growers received is non-binding to the future growers agreement: growers who have signed or who have been issued with deadlines are not bound by those deadlines until the new Potato Supply Agreement (2026-2027) is finalised.

Simplot has been contacted for comment.