Potato growers suffer from supermarket selling power

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While the poor price of milk being paid to farmers by supermarkets has often hit the headlines, the same inequality in the supply chain also applied to potatoes, according to Allan Stevenson, chairman of the Potato Council.

Analysis of the prices being paid by consumers with the returns going back to growers suggests the primary producers only gets between 10 and 30 per cent of the final price, he told a farming audience in Carnoustie yesterday.

“The current fresh market supply chain is fundamentally bust. It is stifling investment and innovation,” he said.

He added that many of the major retailers neither understood nor seemed to want to understand the vagaries of growing potatoes.

He claimed they often put on promotions when supplies were running out or used “buy one get one free” sales gimmicks which only contributed to household waste.

“You cannot tell retailers,” he said. “They set their own price points. They do not seem to want to speak to growers on what is available and what is not.”

He revealed that, following the poorest crop growing year for more than three decades, there had been far more calls than normal to the Potato Council from growers who found themselves in a position where they had been unable to meet contract tonnages.

The main problem seemed to be in the supply to the fresh market with fewer problems in dealing with the processors.

Next month, Stevenson who farms in East Lothian, will step down from the chairmanship of the Potato Council but before he departs he has organised an all-industry get-together to try and bring more balance into the market.

One result of the boom and bust cycle which has dominated the potato industry is the reduced number of growers still left in the business. Fifty years ago, there were 76,000 growers in Great Britain: by last year that figure had dwindled to just over 2,000.

Stevenson predicted the 2013 number of growers would be down to under that figure and he would not be surprised to see only about 1,000 growers, all handling large acreages of crops in the not-too-distant future.

For those growers sticking it out for next year, life will be more difficult, with farmers who have traditionally let their land for others to grow the crop increasingly reluctant to put up with the damage caused by harvesting crops in wet conditions.

Stevenson said his own experience was either those farmers wanted more money to do so or they were insisting on the merchant harvesting with a tracked self-propelled harvester, a piece of machinery costing around about £400,000.