21/04/2015 - 04:53

Potato growers set for shake up

21/04/2015 - 04:53

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Potato farmers are disappointed with the state government’s reported decision to abolish the industry regulator after the 2017 election, but have said they are willing to consider changes to eliminate some of the most controversial legislation governing their trade.

Western Australia's potato industry has been governed by the same regulations for 69 years.

Potato farmers are disappointed with the state government’s reported decision to abolish the industry regulator after the 2017 election, but have said they are willing to consider changes to eliminate some of the most controversial legislation governing their trade.

Potato Growers Association president Dean Ryan said the lobby might support abolition of the more extreme laws governing the tuber, including stop-and-search powers for suspected potato smugglers.

See also: Spud king takes a stand

The Potato Marketing Corporation, a government entity, has unfettered powers to control production and price of the starchy staple in Western Australia, extending as far as the ability to search vehicles suspected of carrying more than 50 kilograms of spuds.

Mr Ryan said in his time in the industry, since 1988, the laws had never been used.

“That part of the law we’d probably like to get rid of, he said.

He added that growers wanted to eschew the reputation of the PMC as a ‘spud cop’.

Mr Ryan said that discussion had been taking place about making the regulatory system more closely resemble a free market, but growers feared there would be instability of prices in a deregulated regime.

“From what I can see, the growers are better off with it, and the consumers would not benefit from it going,” he said.

Instability would mean that higher cost or lower quality producers might be forced out of the market in the event of a major price shock.

But deregulation would also mean that new potato growers could enter the industry without paying a licensing fee and a tax to fund the PMC, both of which act as barriers to entry for new competitors.

The fee to buy a market entitlement, which is required for entry into the industry, is up to $500,000.

Earlier this year, Business News revealed that Galati Group managing director and WA spud king Tony Galati could fight the PMC in court after he gave away hundreds of tonnes of excess potatoes for free through his Spud Shed chain.

The PMC, with the support of some growers, was considering prosecuting Mr Galati for the giveaway.

Mr Galati argued that the corporation should’ve reduced the price of potatoes to correct the oversupply, rather than ordering the excess be dumped.

He added that the current regulatory regime benefited a small number of growers at the expense of consumers.

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