Potato negotiations set to start - Ensuring the price is right

31 May 2024

Farming is never short of significant issues. Some are more contentious and ongoing, some are purely philosophical and yet others will perhaps never be solved. Yet the constant through all issues is the need for strong and effective representation so that individual farmers are not left out, left behind or disadvantaged.

This is particularly evident in a small state like Tasmania, where despite our nation-leading productivity as farmers, we still work with a relatively small number of commodity customers. Vegetable growers have two main processors and a comparable amount of fresh vegetable agents, dairy farmers have two or three companies to buy their milk, beef and lamb growers are in a very similar situation, and wool, poppy and pyrethrum growers the same.

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The definition of a free and open market is an economic system with little to no barriers to free-market activity, however farmers would be the first to recognise that many different things interfere with that. Unlike other international markets where the state subsidises farm production, Tasmanian farmers have no subsidies available to them but still have the many different impediments placed by regulations, red tape costs and other handbrakes.

As Tasmanian farmers are acutely aware, for the most part we are not price setters. However, that does not mean necessarily that farmers are simply price takers. For many years now, TasFarmers/ TFGA have held an exemption from the Australian Competition and Consumer Commission (ACCC) to allow farmers to negotiate collectively for the price of certain commodities. Under normal competition rules, individual businesses are not permitted to collaborate or collude and act as a single entity, which if this were to be the case for vegetable growers, each farm would have to negotiate individually with processors, a situation which would never work in favour of an individual farmer.

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Over the past two decades, this has led to better outcomes for vegetable farmers as a whole, where farmers have negotiated together for price based on solid and well-researched arguments. It’s not a perfect system and there have been years where prices and contracted volumes have gone backwards, but for the most part it has resulted in the best possible outcomes for growers and the overall industry as a whole.

These negotiations will soon commence for the potato sector, and with support from TasFarmers, growers will seek to strengthen their on-farm efficiencies with prices in line with their efforts, investment and commitments. These negotiations are not just about price, although that is critical, it is also an opportunity to advocate for issues around quality and delivery efficiency with each processor and also understand the challenges faced by our Tasmanian-based processors.

As these talks progress with the negotiating committees, keep an eye out for our member alerts with dates and times for grower meetings where farmers can get the latest information and have the opportunity to have your say.