TRADE AND MARKETING Agricultural Economics Research Institute (LEI) of the Wageningen University and Research Center (WUR). At the end of 2009, at the Potato Demonstration Day Conference, he spoke in his capacity of an agricultural economist on the subject of ‘crisis phenomena in the potato sector.’ Today, one year later, the situation is quite the opposite. Prices are good, but the income disparities are yet again enormous. In Huirne’s view there is only one remedy: ‘Go on the offensive. If we don’t do anything and keep anxiously waiting, we will certainly lose our leading position.’ ‘Go on the offensive’ P rofessor Ruud Huirne is director of the renowned ‘As a potato grower, you are in position of direct competition.’ It doesn’t help to complain, is what you told the sector in 2009. We would do better to think about solutions and challenges. What solutions did you have in mind for them? ‘The solution is that potato growers must regularly think about their personal way of farming and their personal business situation. Many growers tend to follow the same old routine. What really happens is that they stagnate in their operational management And we all know, standstill means decline. So, every year we have the same discussion: do we or do we not sign contracts with the industry? It is impossible to generalise about such decisions. It remains a matter of what suits you as an entrepreneur, what is the risk-bearing capacity of your business, which in turn depends on your financial obligations. For example, we all have to cope with a reasonably-unpredictable climate. This means harvest risks and fluctuating yields. At this moment, prices on the free market are good, but in other seasons your crop may be sold at dump prices. Signing contracts can give an entrepreneur a sense of peace, certainly as far as the bank is concerned, and a more fixed income. And not everyone is a clever negotiator for such contracts. What contract growers could do more, though, is to improve their position as regards information so that they are better prepared when they enter into these negotiations.’ How much can be gained by that? ‘Euros on top of the basic price won’t really happen so easily. This is more about improving conditions such as extras for good quality and providing correct grades. At any rate, cooperation in potato growing hardly ever provides more on the yield side, for we are invariably faced with a limited demand and a great many offering parties. The total yield of potatoes has also been reasonably stable over the years. As a potato grower, you are in a position of full competition. Let’s face it, you are in a weak position. From an economic point of view, the Dutch consumption potato sector provides a homogeneous product. You can, of course, try to change that into a more varied product. You have now arrived, however, in the domain of niches, in which collaboration makes sense, but only applies to a few. Five farmers combining their activities or working with a cooperative doesn’t help much to improve sales prices whenever it involves bulk products. Cooperatives also have to deal with the same limited number of buyers. Those buyers, industries and packagers in turn negotiate contracts with the supermarkets. The margins that can then be achieved clearly remains a question that keeps many of us busy, because there is a total absence of transparency.’ So, has the time not come for more transparency? ‘Yes, but that is still difficult to accomplish. This spring, questions about this were put at political level to the various parties in the chain, from cultivation to supermarket. You actually 4 Potato World 2011 • number 2 Pagina 3
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