European potato farmers and processors have pushed back against concerns they are about to dump subsidized frozen fries from a coronavirus-caused glut into the Australian market.
“To be very honest, we have been very surprised about the information reaching us through social media from Down Under,” said Romain Cools, secretary-general of Belgian grower body Belgapom.
Australian grower group AUSVEG had raised the alarm about a EUR650m assistance package to help Dutch farmers, warning that this could lead to big stockpiles of frozen potato products landing in Australia at loss-leading prices. Trade unions and farmers last week held rallies outside McCain Foods factories in Victoria and Tasmania, urging federal government protection for threatened Australian potato farmers under anti-dumping rules.
“Looked like protectionism,” said Romain Cools. “Based on historical experience, protectionism has never led to success stories. I am sure that my colleagues Down Under will also subscribe to this position.”
The Belgian and Dutch farmers are faced with an unwanted stockpile totaling more than 2.6 million tons of unsold produce. They’ve suffered heavy losses, and there has been some government assistance. But the European industry says all is not what it seems. Farmers selling at the spot price have been hit hard. Most of them, though, have long-term contracts with processors for their potatoes – and in those cases, it’s the processors who are taking the hit. The processors have had to slow production because of a lack of refrigerated storage capacity. And they can’t sell their own surplus raw potatoes on the spot market for anything like what they paid for them.
The Dutch government is offering 40% of the spot price – about EUR60 a ton – for unsold stock, with the potatoes redirected for use as animal feed, or in distilleries or biogas plants. That support amounts to about EUR50m of the EUR650m the Dutch government has provided across various parts of its hard-hit agriculture and horticulture sectors.
Leon Boer, president of the Netherlands Potato Processors Association, said the Dutch potatoes couldn’t end up in Australia because the farmers would only get the subsidy if they could prove the potatoes were diverted to these alternative end-uses.