By Daisy Baker
AFTER almost two months negotiating with Simplot, potato growers around the state have accepted a new two-year contract which will deliver a price increase each year.
The Simplot Potato Growers committee and TFGA representatives met at Deloraine on Tuesday, along with almost 90 from around the state.
Farmers supplying Simplot will receive a price increase of $35 per tonne in the first year of the contract.
In the second year there will be a minimum price increase of $10 per tonne but it will be reviewed by the working group.
Chairman of Simplot Potato Growers committee and local farmer Trevor Hall said the new contract terms are a good sign for the industry.
“I think the industry was on a knife edge prior to this and this will give growers a bit of heart to move forward and restore a bit of profitability,” he said. “This will give growers some confidence and help them plan for the coming season, helping them decide whether they want to be in or out.
“It’s probably that age?old notion that the farmers think they should have got a little bit more and the processors think they paid a little bit too much but we’ve met in the middle.”
As part of the new contract, several terms originally proposed by Simplot have also been amended. The new size scheme will not be implemented this year and the administration fee on seed which was meant to rise will stay the same.
Meanwhile a fee for virus testing seed which was going to be introduced this year will no longer be implemented. This contract agreement comes after potato growers around the state unanimously rejected Simplot’s proposed price increase and contract terms in July.
Simplot originally offered growers a three year contract, with an extra two cents a kilo on the first year, one cent in the second and once cent in the third.
This sparked concern among potato growers about the financial viability of growing the crop, due to rising costs and low return.
Growers then called for an increase of four cents a kilo in the first year and a substantial increase in the second year. Mr Hall said while the new contract terms haven’t entirely met their demands, it’s an improvement.
“This is not quite what we were aiming for initially but things have improved and this is pretty close to what we were hoping for,” he concluded.