'Lower contract price for potatoes absurd'

The Dutch Arable Trade Union (NAV) and the Potato Producers Organization (POC) call the lower contract price for potatoes offered by a Belgian processor for harvest 2020 'slightly absurd and not to be taken seriously by growers'. The organizations point out that the cost price of potato cultivation is rising. 'And the contract prices have to come along.'

At the end of last week it became clear that a large Belgian processor is offering lower contract prices for the 2020 harvest than last year. Especially with regard to the early delivery for October. The NAV and the POC share the view that this does not take into account the higher cultivation costs for the 2020 harvest. The NAV expects the cost price for cultivation in 2020 to increase by about 15% compared to last year.

Significantly higher contract price
The POC therefore believes that the contract prices also "should go up considerably". "The contract prices for 2019 were already not at cost price level and therefore have to take a big step to make profitable cultivation possible for arable farmers," the organization reports in a statement. According to NAV and POC, the increase in the cost price is due to higher collectively agreed wages, which affect many cost items, and the increasing cost of haulm killing and, in particular, sprouting inhibition. 

In the calculations, the NAV is based on sprout inhibition with CIPC in 2019 and in 2020 with field spraying with MH and then from mid-December about 5 times with the new sprout inhibitors in storage. Keimpe van der Heide, temporary chairman of the POC, says in the statement that he did not expect such a large cost price increase. "We have been doing the calculations in the same way for about ten years now. We include all costs and at the end a margin of 15% on top of the basic cost price for the risk that the farmer takes. And that seems realistic to us, given the uncertainties that there are still some in the new paths we need to take in haulm killing and sprout inhibition."

Sustainable cultivation
NAV and POC emphasize that the processors should not only pass on corporate social responsibility to the growers. "When we talk about sustainable and future-proof cultivation, the grower must continue to take steps in the field of cultivation. There has now been a major change in the range of resources available to the grower, which has enormous consequences for the cost price of the cultivation. And if we also When talking about corporate social responsibility, buyers will have to raise contract prices sharply to enable growers to meet the demands of society."

© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.