Spud growers spitting chips

Headshot of Jenne Brammer
Jenne BrammerThe West Australian
Email Jenne Brammer

Small and medium-sized potato growers fear they will be pushed out of business as a result of deregulation in their industry.

WA Premier Colin Barnett recently announced the Potato Marketing Corporation would be abolished within two years, despite the protests of the vast majority of about 80 commercial potato growers in WA.

At a meeting in Pemberton last week, growers vowed they would fight to protect their industry by retaining the corporation which keeps prices stable.

Manjimup grower Bob Pessotto, whose father came to WA from Italy in 1950 and started potato farming in Manjimup in 1956, expects there will be much disruption in his industry and smaller growers will be the losers - similar to that of the dairy industry when it deregulated in 2000.

"There will be no guarantee of a price - rather this will be subject to market delivery from day to day and the associated ups and downs," he said.

"It will be a free-for-all - the bigger growers will muscle in and become dominant."

The Pessottos' family-run business, which includes Bob and brother Bruno and Bob's sons Frank and Carlo, is regarded as a medium-sized operation after building up its domestic market entitlement (quota) to 1000 tonnes a year, under the business name F Pessotto and Sons.

Mr Pessotto said already, because of costs, it was currently unviable to grow any less than 500 or 600 tonnes a year.

"After deregulation, in my opinion, the minimum amount you would need to grow to make a profit could be closer to around 1500 tonnes," he said.

He said with smaller growers losing their ability to collectively bargain, larger growers would gouge out market share.

"It's not so much that overall prices will be less," he said.

"Rather, the day-to-day variation will be like playing at the casino.

"If you get a stream of three years in a row with low prices, could you afford to keep coming back and planting another crop? The difference will be the unpredictability and instability. Growers will need to be bigger and stronger to handle the waves."

Christian de Haan, who farms with father Peter, also at Manjimup, expects their 650-tonne DME potato business will not survive in a deregulated environment.

"We would probably make the decision not to grow fresh potatoes," Mr de Haan, whose grandfather started growing potatoes in the area in the late 1950s, said.

"The risks are too much - there will be oversupply by the bigger players - which will lead to a collapse in prices that we couldn't wear," he said.

He said he was particularly frustrated about misinformation reaching the public. For instance, there is the perception that the current regulation is costing the public money, however the corporation is fully funded by grower levies.

"There is also the view that consumers will get cheaper potatoes in a deregulated environment," Mr de Haan said. "That is not the case - WA consumers currently get cheaper potatoes and more varieties than those in other States.

"Under deregulation, growers will be paid less and the supermarkets will take a bigger cut."

Mr Pessotto said the squeezing out of smaller growers will in turn impact on communities, and he expected the Pemberton and Manjimup areas would be hardest hit.

Get the latest news from thewest.com.au in your inbox.

Sign up for our emails