Prompted by the disappearance of the sprout inhibitor CIPC, Agristo is adjusting its contract prices for the 2020 cultivation season. The delivery period plays an important role in this. The Belgian-Dutch processor continues to pursue its ambition: a simple and transparent contract.
Agristo, with production sites in Tilburg, Harelbeke, Nazareth and Wielsbeke, has 1 contract form for its entire cultivation area: A tonnage contract with a clear price structure. Additional premiums, reimbursements or discounts are not available. That's how Agro Director Steven de Cuyper likes to see it. Yet he is the first to admit that the uncertainty surrounding the disappearance of CIPC raises questions. “There is a gray area regarding the standards that we will hopefully get clarity on soon. The entire European potato sector – growers and buyers – must commit to this,” he believes.
Plus in storage
Just like last season the processor starts with the main harvest from land in week 36. Fontane and Challenger are paid €11 per 100 kilos. For Innovator this is €12,50 per 100 kilos. This is unchanged compared to the previous year. In week 17 (end of April) Fontane and Challenger donate €16,50. For Innovator that is €18,50. At the end of June (week 26) this increased to €18,50 for Fontane. Innovator does not have a June contract. The Bintje variety has disappeared from the package this year.
These prices mean that Fontane and Challenger will receive an additional €0,50 in the second half of the retention period. For Innovator this is plus €1 per 100 kilos. These are the highest contract prices the company has ever paid out. After a price increase in seed potatoes last season, they remain virtually stable this season. “We are trying to make a small optimization here to the benefit of the grower,” De Cuyper explains. Agristo pays out the size 35 millimeters upwards. We are always happy to purchase any free kilos at the then current daily price.
Long term relationship
“I advocate a long-term relationship with our growers,” De Cuyper explains. “We do not offer multi-year contracts for this. I believe that we should offer a good contract every year. The grower can then decide whether to participate or not. Contract prices have proven to be volatile in recent years. By offering a uniform and transparent contract price, we hope to give growers stability that they can find a revenue model for.”
It is important for growers to know their cost price well, the agricultural director knows. “The disappearance of CIPC will result in an increase in costs. The costs involved differ per company. They must clearly visualize this themselves. We are in uncharted territory. I hear many different strategies, which we will follow with great interest.”
Make efforts
De Cuyper sees this dossier – but also that of other crop protection products – as a good topic for the brand new Belgian potato organization Belpotato.be. He participates in the organization on behalf of Belgapom, where he acts as vice-chairman. “This concerns the entire sector, which means we have to join forces throughout Europe. If we as a sector all do our utmost to guarantee food safety, the European Commission can hopefully grant a temporary MRL. It is also an opportunity. I believe that the EU will lead in this area, and the US should follow.”
Last year, Agristo clearly focused on expanding the area to fill their new factory. Next season will be more about creating balance. De Cuyper: “Growth is mainly possible in the west of Belgium and northern France. In Belgium I still see the limit of 100.000 hectares of potatoes as the limit. There is still room in Wallonia, but with a view to a healthy rotation, that is not much anymore. This is also the case in the Netherlands. We first look for expansion with our existing growers and only then will we enter into discussions with new growers.”
More guidance
The processor will provide even more guidance to growers for long-term storage next season, in order to achieve proper coordination of the storage strategy. Growers are expected to make maximum effort to clean sheds. “New insights are constantly emerging. So we cannot make any firm statements at this time. The speed of this change and the lack of clarity makes it very difficult for everyone. Unfortunately we don't have time. Hopefully there will be more clarity soon and we will jointly arrive at a practical solution.”