Tasmanian potato growers are locked in a bitter standoff with frozen chip giant Simplot after unanimously rejecting a proposed 6% price cut for the upcoming season.
Talks between the multinational processor and local farmers have stalled, with growers demanding a return to the previous gross margin pricing model.
Leigh Elphinstone, chair of the Simplot Potato Growers Negotiating Committee and a Sisters Creek farmer, said the company’s proposal was “100% rejected” at an August meeting in Deloraine.
“We have had zero official response from them since,” Elphinstone told the Country Hour.
“Since their very first price offer or proposal they put to us, they have not come back with one thing to negotiate on.”
The dispute centres on Simplot’s move away from the long-standing gross margin model that had been used for years to set fair potato prices.
Under that system, growers and Simplot calculated direct growing costs together, then added a margin for overheads and profit.
The American-owned company now appears to be taking a tougher global approach.
“It definitely appears that they don’t hold Tasmania in high regard,” Elphinstone said.
The stalemate comes despite Simplot investing millions in recent upgrades at its Ulverstone plant and new storage facilities at Penguin.
Growers are now weighing up reducing plantings amid pricing uncertainty, with some questioning their future in the industry.
“Growers are angry, they’re bitterly disappointed with the way we’ve been treated,” Elphinstone said.
He added that global management has threatened to shut the factory and import from Asia if local costs can’t match international prices.
TasFarmers CEO Nathan Calman said last month that growers are also being hit with rising expenses outside their control.
“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.”
“TasFarmers urges Simplot to come back to the negotiating table with a sensible offer that represents a fair deal for farmers.”
Meanwhile, rival processor McCain has wrapped up its seasonal talks, settling on a smaller 3.7% price cut after what its committee described as “good faith” negotiations.
