By Caitriona Murphy – Hundreds of potato growers face potential ruin this year as potato prices plummet far below the cost of growing them, Teagasc and the IFA have warned.
With costs of production estimated at €185/t, excluding storage and irrigation costs, many growers are being forced to accept prices of €130/t. Facing spiralling debts, some farmers have been forced to accept prices as low as €70/t to avoid further storage costs.
IFA president John Bryan said potato growers were facing wipeout as retailers and packers pocketed up to 80pc of the final retail price.
“With average farmgate prices at €130 per tonne, and retail prices averaging €500 per tonne, it is clear for anyone to see that the situation is totally inequitable,” he insisted.
Ireland’s top three retailers control nearly 80pc of the market, exacerbating the problem of price negotiations.
“The excessive profiteering must end and growers must get fair play. It is not acceptable that retailers drive primary producers into bankruptcy because of a short-term oversupply situation.”
This year’s potato crop is some 7pc higher than the eight-year average, according to Teagasc estimates, and market oversupply problems have been compounded by the loss of a crucial export market.
Eastern European countries provided an outlet for more than 30,000t of ware potatoes during the 2010/2011 season. However, the export market was driven only by drought conditions in these countries and has now closed.
The crisis in the potato sector is to be addressed at the Teagasc National Potato Conference next month.
“Guys simply cannot keep going the way they are going,” maintained Teagasc tillage specialist Michael Hennessy.
“Some of them will have to step back from the market but they are so heavily committed to the industry they can’t see how.”
Using specialist machinery costing €500,000 to €1.5m, and with thousands more euro tied up in expensive storage, many growers have been forced to take rock bottom prices to move stock.
Meanwhile, Bord Bia is conducting research to find out why people are choosing pasta, rice and other carbohydrates over the traditional potato. Demand for the traditional spud has been falling at a rate of 10pc per year.