07 Nov 2011
POTATO GROWERS FACING RETAIL AND COST CHALLENGESPotato
The Irish Farmers’ Association has today (Mon) launched a comprehensive survey of potato growing in Ireland, Trends + Challenges in Irish Potato Production, which identifies the power of the retail multiples as an increasing threat to the viability of growers.
The results are based on information gathered from potato growers over the years 2009-2011. The survey identifies the main varieties grown in Ireland, the county breakdown for planting and the costs for growers.
Commenting on the challenges for growers, IFA National Potato Chairman Thomas Carpenter said, “There is pronounced downward pressure on farmgate prices with the concentration of buying power of the top three retailers, which control nearly 80% of the market. The grower share of the final retail price is 30% because the aggressive tactics employed by the multiples for market share are weakening the bargaining power of the grower and the loss leader approach is undermining the retail value of potatoes. We have to see a statutory Code of Practice for the retail sector that will ensure that costs of production and a margin are covered.”
Thomas Carpenter said there was also an urgent need for more effective market structures, including consolidation and the establishment of producer groups to rebalance the market. “Growers also want to see the relationship between themselves and merchants and retailers reviewed to improve price transparency.”
On costs, the survey shows that growers spend over €3,100 to produce an acre of potatoes. Fertiliser prices are up 25% and field operations are 8% more expensive because of higher fuel prices. Mr Carpenter said, “Rising costs are a threat to growers’ incomes. If inputs continue to rise, then growers will have to get a greater return from the market.”
Among the other findings of the survey are:
Rooster is the biggest variety grown at 56%, which is the highest level ever;
Irish growers are expected to harvest 375,000 tonnes of potatoes on 23,400 acres this year;
Meath, Dublin, Louth, Wexford, Donegal and Cork account for nearly 90% of the total area planted.
Niall Madigan (01) 450 1931/ 086 822 8635
Morag Devins (01) 426 0344/ 086 263 3940