The UK’s £1bn potato growing sector has been hit so hard by extreme weather and coronavirus that its largest customer is stepping in with £25m of support to secure its supply chain, writes Judith Evans in a Financial Times article.
Canadian company McCain, which makes frozen chips and other potato products for UK retailers, restaurants and chip shops, will invest £10m this year and another £15m over the next four years to help growers overcome hits to supply and demand, and risks linked to Brexit. The move follows droughts in 2018 followed by flooding in 2019, which hurt yields.
The pain was compounded by lockdown and the closure of restaurants and fast food outlets, which left a potato surplus of almost 200,000 tonnes in March, putting pressure on prices.
Potato growers’ woes echo those of dairy and meat producers, who are also struggling with abrupt swings in consumer demand in the pandemic.
The hardest hit growers have been those who sell in the spot market rather than under contract, such as those selling for “fresh chipping” on the premises of food outlets.
McCain, which buys about 15 per cent of the UK’s annual potato crop, normally has one-year contracts with growers. But as part of the £25m investment it will put in place a three-to-five-year loyalty scheme so farmers can be assured of their market.
It will pay higher prices for early varieties and will offer grants for investment in harvesting capacity, including technology such as irrigation and harvesters that can handle very wet weather. Some 85 growers have applied for these.
McCain, the world’s largest potato processor, makes about £500m of UK-based annual turnover as part of its £5.75bn business. “We really felt there was a need, through conversations with our growers, to ensure there was a sustainable supply chain going forward,” said Howard Snape, regional president at McCain UK and Ireland.
Source: Financial Times. Full story here (behind paywall) – similar article on the same topic published by The Grocer here (public access)
Photo: Potato growers who sign up will benefit as McCain invest £10m this year and another £15m over the next four years © Gary Calton/Alamy
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