Western Australia’s potato regulator has taken aim at the state’s largest grower, using its annual report to single him out as one of the challenges facing the industry.
The Potato Marketing Corporation (PMC), a second world war-era vegetable regulator, is engaged in legal dispute with Tony Galati, the industrious potato grower who also owns the Spudshed chain of grocery stores, and who infamously gave away 200 tonnes of potatoes at those stores in January because the regulator would not let him sell more than his allocated quota.
In its 2014-15 annual report, tabled in WA parliament on Wednesday, the PMC singled Galati out for criticism, listing him alongside the weather and consumer demand for tricky-to-grow yellow-fleshed potatoes as reasons for a more difficult growing season.
“Overall the 2014-15 season was challenging from a number of perspectives including weather causing quality issues, and a substantial oversupply, largely by one grower, negatively influencing returns and distorting markets,” the report said.
Galati is not named in the report, but reference is made to the legal dispute.
“The significant oversupply during this growing year was overwhelmingly the result of the actions of one large integrated grower,” the report states.
“Several attempts have been made to resolve this issue with the grower, but without success such that legal action is pending.”
The PMC launched legal action in April, accusing Galati of breaching a 2013 agreement to grow only an agreed upon number of potatoes. The two parties had until Wednesday to come to terms, or lawyers for the PMC would lodge a writ with the supreme court.
Galati reportedly told the West Australian on Wednesday that he was attempting to resolve the legal dispute, but was willing to go to jail for contempt if the court ordered him to stop growing or harvesting potatoes.
WA is the only Australian jurisdiction to maintain a regulated potato market, a mechanism that has ensured farmers make twice as much per tonne as their eastern states colleagues.
Galati has been butting heads with the system for 20 years. In April he achieved a key victory: the WA premier, Colin Barnett, announced that the regulator would be abolished after the 2017 state election.
Barnett made the announcement after the former treasurer, Joe Hockey, said at the Council of Australian Governments meeting that in order for WA to receive $500m in infrastructure funding to make up for a fall in GST allocation, it would have to look at abolishing economic “anomalies” like the PMC.
But the bulk of WA’s 78 registered potato growers say they would be happy for the industry to continue as it has for the past 70 years, unchanged from when they inherited their farms from their fathers.
Dean Ryan is one such farmer. His family have been growing potatoes at Pemberton, in the state’s south-west, since 1957. He’s also the president of the Potato Growers Association, a body that has stood firmly with the PMC and against Galati’s free enterprise.
“There are only so many spuds that the market can take in WA,” Ryan told Guardian Australia. “So if everyone grows what they are allocated, then the market is served, there’s no waste, and we are not ploughing spuds in.”
That’s what happened in summer, when the market was oversupplied and farmers couldn’t sell their whole quota. It costs $20,000 to grow a hectare of potatoes and the family farms that make up most of WA’s potato growers aren’t geared to afford the loss.
“Particularly the small guys that I talk with, they are suffering. They can’t stand another year of it,” Ryan said.
“We have grown all these potatoes for the market but because it’s oversupplied, what do we do with them?”
Storing surplus potatoes by leaving them in the ground, common practice in cooler climates, won’t work in WA, Ryan said, particularly as growers were often trying to store them over summer. “You try and store the in the summertime – they just cook in the ground,” he said.
The exacting standards of supermarket chains don’t allow for slightly weathered tubers.
“If you can’t see your reflection in the skin finish, they don’t really want them,” he said. “As soon as you start storing them, it deteriorates.”
Tony Galati and the Potato Marketing Corporation have been contacted for comment.
