Concern over flood of SA potatoes
The closure of a South Australian potato processing plant could see cheap imports flood the West, the Potato Growers Association of WA has warned.
Frozen vegetable purveyors McCain last week announced 60 jobs will go when they close a factory in Penola.
Management cited competition with cheap imports and increased production costs as the main drivers in the plant's closure, slated for the end of this year.
McCain Foods Australian regional president Louis Wolthers said cheaper processed potatoes have risen from 10,000 tonnes in 2002 to a decade high of 130,000 tonnes at the end of 2012, and they were seriously threatening the country's processing industry.
Potato Growers Association of WA Executive Officer Jim Turley warned SA growers may now be looking for alternative markets, such as WA.
"Those growers in SA might choose to put their potatoes on the local domestic market and receive a lesser price," Mr Turley said.
"If that's the case it could cause an over-supply of potatoes in South Australia and they could flow over the border into WA."
But the cost of transport - which Mr Turley suggested could be $300/t - could deter some interstate growers, he said.
It was a further strain on an industry already under tremendous pressure and his association was watching the events closely, he said.
"The vegetable industry in particular is under tremendous pressure, as being price takers they can't put the price on their product," Mr Turley said.
"Their viability will be in question over the next five years … after eight or nine years Australia could be incapable of supplying its own people with fresh product because it could be too costly to produce it."
Weak domestic labelling laws meant consumers were unwittingly buying imported products, he said.
Second generation Baldivis potato farmer Sam Calameri, 62, shared Mr Turley's concerns.
"Until such time the growers adjust to their plantings … if they've already planted and the plant has shut down, obviously they will try to find a market," he said.
"WA is usually a pretty attractive market because of our regulated system."
About 30,000t were processed at the Penola plant annually.
They will now go to McCain's Ballarat processing facility, a spokesperson for the company said.
"We will be reviewing production schedules in light of more potatoes being processed at the plant," he said.
No further plant closures are envisaged for this financial year, he said.
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