Tasmanian Potato Growers Sign Simplot Contracts With Average 2.5 Percent Price Cut

Most Tasmanian potato growers supplying Simplot have signed new contracts with the company that TasFarmers says have resulted in an average 2.5 per cent price cut for farmers. TasFarmers Chief Operating Officer Neil Grose said Simplot gave growers until 5pm on September 15 to sign their contracts. According to Grose, Simplot reiterated that growers who did not sign by the deadline would be considered to have decided not to grow potatoes, with their contracted volume allocated elsewhere.

Grose said he understood that most farmers signed their contracts at 4.45pm on September 15. One farmer who did not sign was described by Grose as "a fairly large grower who's just not going to grow spuds." He did not identify the grower for privacy reasons.

Neil Grose, Chief Operating Officer of TasFarmers:

"This is an incredibly difficult situation for Tasmanian family farmers who grow spuds for Simplot. While seeing a 2.5 per cent cut to the average price was hard enough, to lose their contract would be devastating to growers."

Grose said Tasmanian farmers have consistently regarded the health of the potato industry as a priority, with the aim of enabling both growers and processors to thrive.

Neil Grose:

"Unfortunately, the price cut, and Simplot's conduct through this process, shows that Simplot only has concern for their own bottom line. At a time when agriculture is under unprecedented cost of production pressure, Simplot has cut the price to the very sector upon which their profits rely on. Despite the cut to growers, the final product is now more expensive to buy at the supermarket and fast food outlet."

Tasmanian potato growers have a collective investment in Tasmania of more than AUD 1.8 billion, spanning farmland, machinery and other cropping infrastructure. Grose said Simplot's processing future in Australia relies on farmers continuing to invest, while continued price reductions and rising production costs could put that investment at risk.

Neil Grose:

"Potato growing in Tasmania is an incredibly vital industry for the state. Cropping puts significant and much needed economic activity into our regional areas but cutting prices to farmers places the economic vitality of the whole state at risk. Short-term price cutting does nothing for the long-term prosperity of our agricultural sector - Tasmania's farmers need a fairer deal."

Simplot has been contacted for comment.