After one of the most difficult growing and harvesting years in recent history, the potato market in the UK is in turmoil and yesterday, East Lothian grower Allan Stevenson – who chairs the Potato Council – announced that there needed to be a drastic change in the supply chain.
Speaking in Crieff, Stevenson said he had seen baker potatoes selling in shops at nine to ten times the cash that the grower was receiving. These were potatoes which had been contracted early in the year at low prices before the weather took its toll and reduced crop yields.
He described the multiplication of price between grower and consumer as “absolutely ludicrous” and demanded that such practices had to stop.
It irked him, he said, that growers who had been loyal to their pre-packers through signing supply contracts were getting low prices while the big margins were being taken by those who made no forward selling plans.
It was not just home-based potato producers who are profiting from the 2012 yield reduction and consequential surge in the final price, with imports from Poland and France now filling the shelves of almost every major retailer.
Stevenson described it as “absurd” that Polish potato growers were now getting more for their crop than many of the UK producers who had contracted early in the season – this situation happening despite there being transport costs of about £100 per tonne getting the Polish potatoes into the UK.
He made it clear he was also sympathetic to the financial plight of the pre-packers who are being held to supply contracts signed with retailers in the early months of 2012 before it was known that yields would be down and prices would double, saying: “They are losing enormous amounts of money in trying to hold on to their contracts.”
With only 2,200 potato growers left in the industry, he cast his eye enviously on how, two months ago, milk producers had been able to mobilise forces and gain public sympathy for their campaign to fight a 2p per litre price reduction. “We are now a small industry which is shrinking fast and we could not command such a campaign,” he said.
So frustrated was Stevenson at the current situation and imbalance that the Potato Council will organise a summit early in 2013 inviting representatives from all links in the supply chain. He hoped the outcome would be a voluntary code of conduct somewhat similar to that now set in place in the milk sector.
This would address the structural imbalance that exists just now and it would also provide a long-term sustainable future. “Let us get the problem out in the open and let us see if we can get a better deal,” he said.
What is further frustrating for the Potato Council is that they have to get clearance from the UK government Cabinet Office for any expenditure that might be interpreted as marketing.
The Scottish seed potato export business, which has seen record tonnages leave these shores in both 2010 and 2011, will break no records this year. Potato Council export expert Rob Burns said exports were not as bad as might be feared but he still expected a 10 per cent drop in tonnage.