Tough trading conditions for tatties

Potato growers in the Borders met last week to discuss the tough trading conditions for tatties.

While supermarkets are selling potatoes for a retail price equivalent to between £500 and £1500 per tonne, many farmers are currently receiving an average of just £50 per tonne. With the true cost of production estimated at being more than £150 per tonne, these trading conditions are unsustainable in the long term.

They come after a difficult year in 2013 and, as a result, many growers may be questioning whether growing ware is justifiable in the future.

Consumption statistics suggest that households are buying fewer fresh potatoes, despite the many advantages of potatoes over pasta and rice. Growers at the meeting took the view that more promotion was needed and also that retailers could improve the way they sell potatoes to make buying potatoes more attractive to consumers.

The Potato Council, the statutory levy body for potatoes, is currently consulting on a draft Business Plan which includes plans for promotion, and an increase in levy rates. NFUS is encouraging all potato growers to respond to that consultation.

Compounding the problem of low market prices, it is reported that some packers of fresh potatoes have been reducing both the volume and price of potatoes that they are contracted to buy, potentially leaving many tonnes of potatoes without a home. Such potatoes could end up as feed for livestock, for which the price paid may only just cover haulage costs.

Unilateral changes to contracts currently leaves producer with little route for recourse. Growers appreciate that the Grocery Code Adjudicator (GCA), who enforces the Groceries Supply Code of Practice only covers the relationship between the retailers and their direct suppliers. There is no equivalent body with a remit to monitor the relationship between packers/food manufactures and those primary producers or co-ops supplying them.

NFUS Potatoes Working Group Chairman, Russell Brown said: “There is a clear need for action to get potato supply and demand into better balance. Potato growers have been caught out by the year-on-year drop in potato consumption. “More promotion of the health and nutritional benefits of eating potatoes, as already highlighted by the Potato Council’s ‘One Voice’ work would certainly help to do that.

“Better physical marketing by retailers would help too – our growers are finding too many green potatoes in plastic bags on shop shelves. That way of marketing needs to be revisited.

“Looking forward, potato growers need to know they have a market for their potatoes and are not growing speculatively - which makes them weak sellers. As a fresh product, marketing of potatoes is unlike grain. Storage and haulage are expensive, so growers can be left exposed – something that some of those further up the supply chain appear to be taking advantage of.

“There has long been a need for change in the contractual relationship which currently leaves almost all risk with the grower. An expansion of the remit of the Grocery Code Adjudicator could help that process. Without that change we may see fewer and fewer growers willing to stick with potato production.”