Bombarded with rising input costs, potato growers are starting to view supply management as a way to save their livelihoods.
The idea found fertile ground in the United States this year and also found favour with growers in Prince Edward Island.
The U.S. effort was led by United Potato Growers of America, which was established last winter. There now is an effort to form a similar national body in Canada.
“We fully support it,” said Garry Sloik, secretary manager of the Keystone Vegetable Producers Association in Manitoba. “Our costs have gone crazy in the last couple of years and (potato) prices haven’t reflected that.”
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A steering committee will meet next month in Ottawa to talk about forming an organization called United Potato Growers of Canada. The idea is to forge an entity that can guide efforts to keep potato supplies in line with demand.
Representatives of potato growers in British Columbia, Alberta, Manitoba, Ontario, Quebec, New Brunswick and Prince Edward Island are all part of the discussions.
“We need to get growers from each area to buy into the concept and participate in controlling acreage so that there will be some profitability returned to it,” Sloik said.
In the U.S., United Potato Growers of America has built a membership that accounts for about 70 percent of the fresh potatoes grown in that country. Seed and processed potato growers are also members.
Jerry Wright, chief executive officer of the group, said the organization used a buy-down program as an incentive for growers to plant fewer acres. Members paid into a fund that was used to compensate those willing to reduce potato plantings this spring.
An added incentive was the potential to push potato prices up by avoiding large surpluses.
Wright believes the strategy worked. Overall potato production in the U.S. dropped by seven percent this year, with fresh potato production declining 14 percent.
Fresh potato prices have already improved, Wright said, and he anticipated further improvements in the coming months.
He said American growers had to do something because they were going broke.
“The oversupply situation in the U.S., especially in the heavy potato growing areas, has been so chronic that it’s depressed retail fresh markets and also held down processed contract prices to barely cost of production.”
The U.S. effort helped kindle the start of a similar movement in Canada. In Prince Edward Island, 10,000 acres were kept out of potato production this year as a result of a buy-down program. That was a 10 percent decline from what had been planted in each of the previous two years.
There was a cap on how many acres each producer could plant based on an average of their plantings in 2003 and 2004, said Ivan Noonan, general manager of the P.E.I. Potato Board. As well, the potato checkoff was doubled and the revenue helped pay producers $200 for each acre kept out of production.
“It was a tough, bitter pill to swallow, but a lot of these guys made the decision because their backs were against the wall,” Noonan said. “Growers have been farming away their equity here on Prince Edward Island and in most potato growing areas. Their equity is all but gone here.”
P.E.I. growers opted to divert at least two million hundredweight of surplus potatoes from the market this year. They were disposed of in a several ways, including compost and livestock feed.
“People made a big sacrifice to make this thing work,” Noonan said.
Wright said ongoing co-operation is needed among growers in Canada and the U.S. if the effort is to fully succeed. Otherwise, overproduction in one country could weaken efforts to manage supply in the other.
Noonan agreed that trust and co-operation across provincial and national boundaries are key. He said the P.E.I. Potato Board talks frequently with growers in all the U.S. potato producing states. Production forecasts and prices are among the topics of conversation.
“It’s an information flow. It’s not about price fixing or anything like that. It’s about trusting that what your neighbour is telling you is pretty close to the truth and what you are in turn telling back to him is indeed pretty close to the truth, too.”
