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Even Greenpeace is concerned about potato pricing

4 July 2024 - Jurphaas Lugtenburg - 29 comments

Greenpeace Belgium has launched an attack on the Belgian potato processing industry. With the report 'Record profits for the industry, peanuts for the farmers' the environmental organization makes clear how it views the potato sector. From the agricultural sector, the environmental movement is not immediately seen as a natural ally and there is also a lot to criticize about the report. Yet, at its core, a very valid point is made: the farmer does not get the most out of his potential.

Seven players (Clarebout Potatoes, Agristo, Lutosa (part of McCain), Mydibel (now taken over by Clarebout), Ecofrost, Farm Frites Belgium, and Aviko Belgium) together control approximately 90% of the Belgian potato market according to Greenpeace. There is something to note about the key figures about the processors in the summary of the report. A comparison is made between 2021 and 2022. It seems like a while ago, but in 2021 we still had to deal with corona measures. Don't get me wrong, the processors have been able to present impressive figures in recent years, but it seems that the cherry is being picked out of the pie.

What the environmental organization also conveniently ignores is that grower prices for potatoes have also risen considerably in recent years. The contracts have increased by tens of percent in the last two years. Records are being set for free potatoes for the second year in a row. Of course, costs have also risen very rapidly for growers. Especially for growers who did not dig up everything last season and are now having difficulty getting all the seed potatoes into the ground, all that glitters is not gold. In general, there does not seem to be the greatest dissatisfaction among chip growers about how the potato market is currently functioning. Compare this to wheat, whose sales price has fallen much faster in a good year than the cost price has fallen or onions, which is a bit of a lottery.

Belgapom under fire
Where I think Greenpeace has hit the nail on the head is that processors have a very big say in determining the potato price. 70% to 75% of turnover is through contracts. In Belgium, this is mainly done with tonnage contracts instead of hectare contracts as is usual in the Netherlands. If the grower cannot deliver the contractually agreed quantity, he will have to pay the difference between the contract price and the price on the open market. The price on the open market is largely determined by the Belgapom quotation. Growers have no voice in the listing committee. Three members from the trade and three from processing form the committee. Trade and processing ultimately determine which prices are included and which are excluded. It is not surprising that Belgapom reacts as if bitten by a viper to the report at Vilt.

From that point of view, strengthening the negotiating position of the farmer in the potato chain is not at all a crazy suggestion from Greenpeace. The idea of ​​proper controls and sanctions on unfair (trade) practices will also appeal to farmers. One of Greenpeace's solutions is uniting farmers. However, in the past this has proven to be very difficult. Initiatives in that area have rarely been successful. Greenpeace calls on the government and cooperatives to take a leading role. This can help in contract negotiations. However, these agreements are mainly concluded directly between grower and processor. A trade organization or growers' association seems to be a better party for this.

Strengthening cooperatives alone will not solve the underlying problem in the free market. As 'mediators' in the free market, traditional potato cooperatives face the same problem as growers. If the potatoes are not there, almost anything can be obtained from the processors at almost any price. If it seems for a moment that there are enough potatoes, buyers slam on the brakes. Just think back to what happened during harvest last fall.

Market protection
Another recommendation from Greenpeace to abolish the Belgapom listing and replace it 'with price mechanisms that reflect actual market conditions and production costs' sounds nice, but how do you put it into practice? The fact that prices for potatoes and agricultural products in general should never be below the cost price of sustainable production, as Greenpeace argues, sounds sympathetic, regardless of the question of what is meant by sustainable production. This season in particular, calling for the phasing out of 'pesticides and synthetic fertilizers' and placing organic cultivation on a pedestal does raise questions about how well the environmental organization has studied the technical aspects of cultivation. We have gained experience in Europe with the original common agricultural policy (CAP) with a system of market protection and guaranteed prices. That was not a success or perhaps too much of a success, depending on how you look at it. It is not without reason that the system was drastically reformed in the early 90s.

How to do this remains a difficult question. As farmers, we should scratch our heads that even an organization like Greenpeace is raising the alarm about the distribution of profits in the potato chain. Initiatives are being taken to make the growers' voices heard better through the Producers' Organization for Consumption Potatoes (POC) or attempts to get the futures market going again. However, it is difficult to get enough growers behind this. Apparently, after a few years of good prices, potato growers are fine with it.

Jurphaas Lugtenburg

Jurphaas Lugtenburg is editor at Boerenbusiness and focuses mainly on the arable farming sectors and the feed and energy market. Jurphaas also owns a small arable farm in Voorne-Putten (South Holland).

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Comments
29 comments
Subscriber
peter 4 July 2024
This is in response to it Boerenbusiness article:
[url = https: // www.boerenbusiness.nl/column/10909567/even-greenpeace-falls-over-prijs formation-potatoes]Even Greenpeace falls over potato price formation[/url]
the conclusion is correct. farmer thinks it's fine that way. just look at the poc they barely have any members
Subscriber
Jantje 4 July 2024
There is only one solution and that is, as much as is financially feasible, free cultivation. No more signing fixed price contracts because that is too big a risk. The manufacturers can only do one thing and that is fry fries. The growers have the choice to also grow other crops on their own land and whether or not to rent it. The manufacturers have now invested heavily in factories and are faced with higher fixed costs, so potatoes have to go through them. By growing freely, they will have to go back on the road instead of dictating the Belgapom price among themselves.
Subscriber
Arie poor branch. 4 July 2024
By writing an article on this site about what Greenpeace thinks of the potato industry and the growers, you are giving this organization a platform, which I don't think they deserve at all. In Dutch, they have nothing to do with that. Not that I am claiming that Greenpeace has no right to exist and no function, but interfering with the trade and actions of manufacturers and suppliers, in my opinion, goes a few bridges too far.
Subscriber
Jantje 4 July 2024
Arie poor branch. wrote:
By writing an article on this site about what Greenpeace thinks of the potato industry and the growers, you are giving this organization a platform, which I don't think they deserve at all. In Dutch, they have nothing to do with that. Not that I am claiming that Greenpeace has no right to exist and no function, but interfering with the trade and actions of manufacturers and suppliers, in my opinion, goes a few bridges too far.
Especially if they attack your employers, right?
Subscriber
CM 4 July 2024
I don't care for Greenpeace either, but a Belgapom listing in which only the industry is involved and can therefore list what they want is completely ridiculous. They do have a valid point in that.
Subscriber
Arie poor branch. 4 July 2024
Jan, you are even more short-sighted than I always thought.
grows 4 July 2024
what can you make mid july harvest for painting? can you exchange 50 cents?
Subscriber
quite coarse 5 July 2024
Indeed Jantje, lots of free cultivation! The factories can only rule over one thing. No energy, wages, packaging materials, cooking oil, interest. They can only influence the potato price and they make great use of it. And we farmers are now too poor to grow max freely.
Subscriber
juun 5 July 2024
ever heard of the saying that what helps best against high prices are high prices. This will sooner or later also happen with the fries potatoes. The cost price is high here and other countries will gradually be able to compete with Western Europe.
Subscriber
CM 5 July 2024
juun wrote:
ever heard of the saying that what helps best against high prices are high prices. This will sooner or later also happen with the fries potatoes. The cost price is high here and other countries will gradually be able to compete with Western Europe.
That won't be too bad, because everywhere else than western Europe, sufficient fresh water is the biggest limiting factor. I think that seed potato growers will be more likely to price themselves out of the market and people will switch more to ATR and Hoeve seed potatoes.
Subscriber
juun 5 July 2024
Then at least they won't be bothered by phytophthora. ;) that's already a much lower cost price.
Subscriber
CM 5 July 2024
juun wrote:
Then at least they won't be bothered by phytophthora. ;) that's already a much lower cost price.
That's right, if you don't have potatoes then you don't have phytophtora. Clever!
Subscriber
juun 6 July 2024
CM wrote:
juun wrote:
Then at least they won't be bothered by phytophthora. ;) that's already a much lower cost price.
That's right, if you don't have potatoes then you don't have phytophtora. Clever!
they are not stupid enough to put potatoes in places where there is no water. America Canada all under the pivot.
Subscriber
CM 6 July 2024
juun wrote:
CM wrote:
juun wrote:
Then at least they won't be bothered by phytophthora. ;) that's already a much lower cost price.
That's right, if you don't have potatoes then you don't have phytophtora. Clever!
they are not stupid enough to put potatoes in places where there is no water. America Canada all under the pivot.
The water rights do not allow a significant expansion of cultivation there. Transport costs have increased explosively again, which means that all in all there will be little competition. Good wages can continue to be paid, especially because the area of ​​free potatoes is only small for the factories.
Subscriber
juun 6 July 2024
CM wrote:
juun wrote:
CM wrote:
juun wrote:
Then at least they won't be bothered by phytophthora. ;) that's already a much lower cost price.
That's right, if you don't have potatoes then you don't have phytophtora. Clever!
they are not stupid enough to put potatoes in places where there is no water. America Canada all under the pivot.
The water rights do not allow a significant expansion of cultivation there. Transport costs have increased explosively again, which means that all in all there will be little competition. Good wages can continue to be paid, especially because the area of ​​free potatoes is only small for the factories.
It is not that the major growth will come to an end there, but Canada will in any case install more irrigation. there is still room for growth. The biggest growth will come from ex-importing countries such as India and China. people don't cost anything there and they can do a lot for the environment. they do provide water and there is acreage in those countries. and they can still inject with long-banned substances there. In addition, it is not that the average yields here are so impressively high. that only fluctuates around 40-45 tons. it's not that hard to achieve.
Subscriber
CM 6 July 2024
No, in China at least fresh water is already the limiting factor so I will help you out of that dream.
Subscriber
juun 6 July 2024
CM wrote:
No, in China at least fresh water is already the limiting factor so I will help you out of that dream.
and yet china's chip exports are growing every year ;) it is not without reason that aviko is also located there. Anyway, I think they will remain expensive. Eastern Europe is also swimming in early potatoes that they cannot get rid of on the paving stones. wheat is no longer worth anything and that always ensures more supply of all other crops.
Subscriber
CM 6 July 2024
Ok, we differ in opinion, but if the cultivation of consumption is not profitable for the growers here because of high input costs, few or no resources, limited irrigation and, according to you, major competition that puts us out of the market, they do not need to have potters from Dutch growers. because it is no longer rewarding enough. Who's happy then?
Subscriber
CM 6 July 2024
By the way, all this talk about high prices is strange. Kinnesinne or something? It is only a very small proportion of free growers who score higher prices. In recent months there has been a very limited supply of free potatoes at high prices because they were simply not available anymore. So exaggerating is also an art and jealousy plays quite a role here.
Subscriber
juun 6 July 2024
CM wrote:
By the way, all this talk about high prices is strange. Kinnesinne or something? It is only a very small proportion of free growers who score higher prices. In recent months there has been a very limited supply of free potatoes at high prices because they were simply not available anymore. So exaggerating is also an art and jealousy plays quite a role here.
When I look at this week's VTA list, there was still quite a bit and most people thought they would become even more expensive. Processors are not crazy, they only say no to a few customers instead of buying fries potatoes that are expensive and may not turn at all. Turning left or right, those potatoes have to go through a knife at some point, so when the ceiling is reached, they just wait until they come back automatically. and it's not that you can't grow potatoes for 65 cents.
Subscriber
CM 6 July 2024
juun wrote:
CM wrote:
By the way, all this talk about high prices is strange. Kinnesinne or something? It is only a very small proportion of free growers who score higher prices. In recent months there has been a very limited supply of free potatoes at high prices because they were simply not available anymore. So exaggerating is also an art and jealousy plays quite a role here.
When I look at this week's VTA list, there was still quite a bit and most people thought they would become even more expensive. Processors are not crazy, they only say no to a few customers instead of buying fries potatoes that are expensive and may not turn at all. Turning left or right, those potatoes have to go through a knife at some point, so when the ceiling is reached, they just wait until they come back automatically. and it's not that you can't grow potatoes for 65 cents.
Yeah so ??? Compared to the rest: contract potatoes, seed potatoes and co-delivery potatoes, free potatoes are a small player on the market. When there is little supply and demand from the industry, prices rise, but that is only a small number of growers. That there are growers who let go of 60 or 65 cents thinking that it will become more, what's wrong with that? I wouldn't do it, but everyone is free to do so. That is now free cultivation and that is nice and exciting. To be jealous or condescending about that says a lot about those who do that. Free entrepreneurship and let everyone do what they want. Most potters are grown through trading houses, is that what?
Subscriber
CM 6 July 2024
To improve the above, pole potatoes should be used instead of seed potatoes and a limited number of growers.
Subscriber
juun 6 July 2024
Trading houses are also not worth a damn, but for a number of varieties you don't really have a choice. and you will quickly end up at a trading house. but that is also more because they prefer to produce too much than necessary and that dampens prices every year. except last year. only then they were smart enough to sell too early. while in June you could already see that there were no tubers underneath. but that's their own fault.
Subscriber
Space 6 July 2024
juun wrote:
CM wrote:
juun wrote:
Then at least they won't be bothered by phytophthora. ;) that's already a much lower cost price.
That's right, if you don't have potatoes then you don't have phytophtora. Clever!
they are not stupid enough to put potatoes in places where there is no water. America Canada all under the pivot.
And where there is no pivot, there are no potatoes.
Subscriber
juun 6 July 2024
space wrote:
juun wrote:
CM wrote:
juun wrote:
Then at least they won't be bothered by phytophthora. ;) that's already a much lower cost price.
That's right, if you don't have potatoes then you don't have phytophtora. Clever!
they are not stupid enough to put potatoes in places where there is no water. America Canada all under the pivot.
And where there is no pivot, there are no potatoes.
That is correct, but there are also many places in America where there is a pivot on corn and soy. If that is an area, potatoes can also grow there. and corn has now slumped considerably after a number of golden years.
Subscriber
Space 6 July 2024
juun wrote:
space wrote:
juun wrote:
CM wrote:
juun wrote:
Then at least they won't be bothered by phytophthora. ;) that's already a much lower cost price.
That's right, if you don't have potatoes then you don't have phytophtora. Clever!
they are not stupid enough to put potatoes in places where there is no water. America Canada all under the pivot.
And where there is no pivot, there are no potatoes.
That is correct, but there are also many places in America where there is a pivot on corn and soy. If that is an area, potatoes can also grow there. and corn has now slumped considerably after a number of golden years.
Yes, but there is no storage, machines, chip factories, knowledge, climate too hot, etc. etc. Possibly a lot of stones. There are not that many places in the world suitable for potatoes.
Subscriber
juun 6 July 2024
Everything is for sale as long as money is made, investing quickly pays off. They also have stones in Canada, but then they put an airsep between them.
Subscriber
agri 2 7 July 2024
juun wrote:
space wrote:
juun wrote:
CM wrote:
juun wrote:
Then at least they won't be bothered by phytophthora. ;) that's already a much lower cost price.
That's right, if you don't have potatoes then you don't have phytophtora. Clever!
they are not stupid enough to put potatoes in places where there is no water. America Canada all under the pivot.
And where there is no pivot, there are no potatoes.
That is correct, but there are also many places in America where there is a pivot on corn and soy. If that is an area, potatoes can also grow there. and corn has now slumped considerably after a number of golden years.
The climate is indeed a major issue, when it is 25 degrees below zero in winter it is not easy to transport potatoes over large distances, read thousands of km!
Subscriber
juun 7 July 2024
agria2 wrote:
juun wrote:
space wrote:
juun wrote:
CM wrote:
juun wrote:
Then at least they won't be bothered by phytophthora. ;) that's already a much lower cost price.
That's right, if you don't have potatoes then you don't have phytophtora. Clever!
they are not stupid enough to put potatoes in places where there is no water. America Canada all under the pivot.
And where there is no pivot, there are no potatoes.
That is correct, but there are also many places in America where there is a pivot on corn and soy. If that is an area, potatoes can also grow there. and corn has now slumped considerably after a number of golden years.
The climate is indeed a major issue, when it is 25 degrees below zero in winter it is not easy to transport potatoes over large distances, read thousands of km!
the chip factories in Canada also operate all year round, so that's not too bad.
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