Processing potato giant McCain has cut off price negotiations with Tasmanian growers as it pursues a $15 a tonne cut, following a similar move by rival Simplot, TasFarmers says.
The farm lobby group said McCain had “unexpectedly” ended talks with the growers committee, which represents growers, just as the planting season begins.
TasFarmers said the proposed cut follows a $19.50 a tonne reduction in 2025, which growers agreed to in order to help sustain the processor.
Growers committee chair Glynn Williams said discussions with McCain started early this year, with growers expecting an arrangement well before planting.
“It is now the beginning of October, growers have ground worked up and ready to plant and now they will receive an ultimatum from McCain to either take the cut or don’t grow,” he said.
“The cost of production is skyrocketing, diesel is approaching $3 a litre, fertiliser is twice last season’s price, interest rates are about to rise and employment cost are surging as well, yet growers will have a week to decide if they take a cut or don’t grow spud at all.”
Williams said dragging out discussions since February before issuing an ultimatum on the cusp of planting was “unfair and disrespectful” to growers.
TasFarmers chief executive Nathan Calman said it appeared to be a pattern among large processors.
“Simplot were quite brutal in the way they put their ultimatum to their growers and we thought that McCain would be different,” he said.
“Cutting off negotiations with the very growers who provide the raw product is short sighted and not in the best long term interests of McCain, nor Tasmania.”
In August, Simplot ended price negotiations with its grower committee and sent contracts directly to individual growers.
The company has said it rejected any suggestion it acted inappropriately or sought to pressure growers.
At the time, Primary Industries Minister Gavin Pearce told parliament the opening price was a commercial matter between processors and the growers they contracted with.
TasFarmers has called on McCain to return to discussions.
A McCain spokesperson contradicted TasFarmers claims, saying the company was “engaged in productive conversations with our growers across South Australia, Tasmania and Victoria on potato pricing for this planting season”.
“Conversations with our growers are continuing and are in good faith by all parties,” the spokesperson said.
Asked about TasFarmers’ statement that McCain had walked away from talks in Tasmania, the spokesperson said: “We are continuing conversations with growers.”
The company, which works with more than 100 potato growers across the country, said its price negotiations were commercially sensitive and not publicly disclosed.
It said it expected to reach agreements with growers before the start of the planting season.
