'Link contract price to irrigation costs'

Since 2010, the Working Group for Consumer Potatoes has calculated a cost price for ware potatoes grown on sandy and clay soil. In 9 years, the cost price increased by almost 33%. The costs for irrigation were never included, because these were seen as incidental costs. However, after the 2018 cultivation season, things will change. The current contract form does not pay extra effort and according to the representative, this must change.

Anyone who was able to irrigate did so many times in 2018. What does this do to the cost?
"The Working Group for Consumer Potatoes (WCA) has made an estimate for the costs of irrigation. Due to climate change, it seems that irrigation is becoming a structural part of cultivation in our country. With a gift of 20 millimeters, we arrive at €225 per hectare for all costs (including labour). Last year was sometimes irrigated 5 or 6 times, resulting in a significant cost increase of the cultivation."

The NAV thinks it is high time for modern contract conditions. What should it contain?
"All links in the sector benefit from future-proof cultivation. We have to work together for that. This season is a good starting point for working on new contract conditions. We see the cost price calculation of the NAV as a starting point. This means that the contract prices must be structurally increased. In addition, the contract price must be flexible in years of drought, when heavy irrigation is required, such as a link with, for example, the precipitation deficit."

How do French fries producers react to this? Are they willing to pay that higher price?
"The working group monitors the price of table potatoes in the supermarket. We see that the sales price in the store is hardly related to the purchase price. We can nuance recent reports, for example about the rising potato chip price due to the low harvest. For 1 bag of chips, 430 grams of potatoes are needed, which is a price increase of €0,05 compared to 2017."

"However, the sales price increases by 20%. This concerns potatoes for which the (contract) price is often fixed. Even if all potatoes are purchased on the free market, 75% of the margin is still for the producer. room for an increase in the contract price. There is no longer a close relationship between the purchase and sales price."

The potato processor can pay more, but is he then assured of the yield he needs?
"From cost calculation takes into account a yield of about 50 tons per hectare on clay soil and 55 tons per hectare on sandy soil. During the last harvest, this was in many cases 20% lower. Growing according to the American model (everything under contract) is not realistic for Western Europe. It is a fact that the climate is changing and irrigation should be seen as a structural component. This ensures more regular yields, without the extremes we have seen in recent years."

"As NAV, we would like to see the discussion broadened, for example via the North-western European Potato Growers (NEPG). There was already consultation about this in September. Instead of the Dutch negotiations, we are arguing for a European breakthrough that offers better contract conditions. "

The first processors have presented their contract prices. Isn't it too late now to negotiate the terms?
"When making investments in your company, you don't look at 1 year either. The cultivation varies from year to year. That needs to change, preferably throughout Europe. The entire chain has an interest in continuity. We are not against fixed price contracts, provided that the offer covers costs with a normal yield. It is an excellent way to hedge part of your risk. Aviko Potato can play a pioneering role in modernizing the contract conditions, due to their special position. They are the sole processor in the hands of the peasants."

If potato growers have access to free seed potatoes without the obligation to conclude a cultivation contract with the industry, does this improve the starting position?
"VTA bought seed potatoes together in the past. That was a wonderful option, but ultimately failed. The grower has to learn to decide early and not to wait until December with his order. The trading house needs this, because they have longer terms. It can be done differently, but we as growers are not doing anything about it now. The NAV is currently conducting a membership survey, which also asks how members view a potato grower's association that takes on such matters."

Shouldn't the conclusion, after your calculation, be that growers only earn real money if they produce the end product themselves?
"There are a number of Dutch companies that are successful in producing French fries or chips under their own label. Our opinion is: shoemaker stick to your last. The arable farmer has to grow and the industry has to process and market this. Do what you are good at McCain in Lelystad also started as a grower's group Polderfood. History teaches us that it is very difficult to gain a position on the sales side. Processing and marketing yourself is not a large-scale solution for potato cultivation."