Idaho frozen-potato processors traditionally get their raw product at a price they negotiate with a grower association before each crop-production season.
A bill in the Idaho Legislature aims to ensure that market-wide fairness.
House Bill 121 would create a period — Oct. 31 to March 15 — for a grower association and a potato processor to negotiate the purchase of raw potatoes for processing, the bill says.
If the processor and grower association fail to reach agreement within the specified period, members of the grower association would then be able to negotiate individually with potato processors.
The bill also would define an eligible cooperative of potato producers for negotiation purposes.
Bill supporters say a potato processor in the fall of 2017 dealt with individual Idaho growers, circumventing the negotiating process with a grower association and gaining a competitive advantage over other processors that negotiated with the association.
If passed, House Bill 121 would give Idaho potato growers “the ability to participate in a price-discovery process for the preseason potato contracts not unlike the process these same companies utilize in Washington, Oregon, Maine and throughout Canada,” said Dan Hargraves of the Southern Idaho Potato Cooperative, which represents growers in negotiations.
“It is not good for any market to have an imbalance where one company, through whatever means, gains a price advantage,” he said.
“The purpose of the SIPCO growing bargaining group is to establish price parity within the french fry frozen-processing industry,” said SIPCO President Chuck Stadick.
The contract price that grower associations and processors negotiate each year has larger significance to the potato market, said Keith Esplin, executive director for Potato Growers of Idaho. It influences prices potato seed growers receive and acts as a benchmark around the country for other potato contract pricing given that Idaho is a large producer.
“And without contract bargaining, there is no process to give an independent grower a voice in dealing with large, multi-national companies,” he said.