Advisory group to guide improvements in potato marketing

10/9/03
An implementation advisory group has been formed to recommend changes to how potatoes are marketed in Western Australia.
Agriculture Minister Kim Chance told State Parliament today that, following Cabinet's recent decision not to deregulate the industry, a review of the Potato Marketing Act would now be completed with a focus on improving efficiencies.
"Proposed changes will deliver more effective marketing arrangements to ensure sustainable industry growth to the benefit of growers and the State," Mr Chance said.
The advisory group comprised representatives of the Potato Marketing Corporation, Potato Growers Association, the washpackers and the retail sector and the Department of Agriculture.
A report on the recommended changes would be tabled in State Parliament, after which amendments to the Act would be introduced.
"In broad terms, the Potato Marketing Corporation will continue to regulate production levels and price setting to merchants," Mr Chance said.

Improved efficiencies to the way potato marketing was regulated would be addressed through several proposed efficiency changes:

• growers' production entitlements would be based on quantity alone, rather than by area as at present;
• the way potato quality standards were specified to ensure there was no conflict with the requirements of retailers and merchants and to reduce supply chain costs; and
• the removal of ministerial approval for routine decisions such as the minimum price paid to growers, the basis for allocating production licences between growers and the determination of quantities to be supplied to the domestic market for each pool period.

Mr Chance said the review would also address two important issues raised during the public discussion and consultation on the Act last year:

• the appropriate size and structure of the board, including whether the board of the corporation needs to be comprised of more independent members with less direct industry involvement; and
• the appropriate regulation of washpackers and merchants, including how many washpackers and merchants to appoint as agents of the corporation, what terms to include in their appointment contracts and how to ensure performance on these contracts in terms of the hidden information between principal and agent.

Mr Chance reiterated the rationale behind the State Government's decision to retain the basic regulated framework for the potato industry.
"Deregulation of potatoes would have disadvantaged small producers, destabilised the industry in regional areas and had a negative impact on supply," he said.
"I am confident that the Federal Government will recognise the justification for the State's position and desist from any threats to reduce competition payments."
Minister's office: 9213 6700