Serious deficiencies uncovered in potato industry

A major investigation of the food processing industry has uncovered serious deficiencies in the marketing and production of potatoes which are forcing Western Australians to pay unreasonably high prices.

"Not only is the situation expensive for consumers, but it is posing a serious threat to jobs and the development of an important export industry," Deputy Premier Ian Taylor said today.

"Part of the problem can be solved by changing legislation, but the complete answer will only come when potato farmers and processors introduce modern production practices."

Mr Taylor made his comments after releasing the report of the Edgell-Birdseye working group - a study team set up last year to investigate a price dispute between the Edgell-Birdseye processing company and its potato-grower suppliers in the Manjimup district.

The report puts forward 19 recommendations including new sales arrangements for potatoes; a special program to improve the efficiency of potato growing; and assistance to Edgell-Birdseye to improve production efficiency and expand export opportunities.

"The group's investigation has led to a detailed study of all aspects of the State's potato industry and uncovered some serious deficiencies," Mr Taylor said.

"Perhaps the main problem they have identified is the cosseted protection potato farmers have been enjoying from the Western Australian Potato Marketing Authority.

"While a measure of protection may have been justified in the early days of the authority, it has created an industry which has lost all sense of competition.

"The result is that people in Perth can now pay up to three times as much for their potatoes as people in other capital cities.

"That situation is simply intolerable - and it is not caused because there is something intrinsically expensive about growing potatoes on this side of the continent.

"It has happened because the marketing authority has been able to fix prices at a high enough level to enable them to cover the gross inefficiencies."

Mr Taylor said a final decision on the future of the existing potato market arrangements would not be taken until an official review was completed. This was due to be conducted in September.

"But personally, I would be more than happy to see the marketing authority go," Mr Taylor said.

"In that way, the industry would be obliged to adopt efficient production methods."