Who Will Grow Our Potatoes? Sharing the risks behind the contract

An agreed price can help a potato business plan ahead. Its value also depends on the obligations attached to it—and what happens when the season fails to follow the plan.

By Lukie Pieterse, Editor and Publisher, Potato News Today

A potato contract connects decisions made months apart. A grower commits land, seed, labour, machinery, and working capital. A buyer plans raw-material supplies, processing schedules, customer commitments, and sales. Both need confidence that the other will deliver.

The difficult questions emerge when circumstances change. A crop produces fewer suitable potatoes than expected. Harvesting is delayed. A delivery is disputed. Production costs move sharply, or demand weakens after planting commitments have been made.

In this second instalment of Who Will Grow Our Potatoes?, Potato News Today examines how agreements distribute those risks. The central issue is what allows growers and buyers to sustain a workable relationship through both favourable and difficult seasons.

The negotiation begins before the crop is planted

Recent reporting from Tasmania illustrates the pressure surrounding the timing of commercial decisions.

In its October 1 report, Pulse Tasmania described TasFarmers’ objections to a proposed A$15-per-tonne reduction sought by McCain. Grower representatives said discussions with their committee had ended as planting approached. McCain disputed that account, telling the publication that conversations with growers were continuing in good faith.

Those were the parties’ reported positions at that time. They should not be treated as evidence of a subsequently agreed settlement.

The episode highlights a practical problem: the opportunity to reconsider a production commitment narrows as expenditure accumulates. A grower who has prepared land and arranged seed faces different choices from one still deciding what to plant.

For buyers, earlier clarity can also improve planning. The commercial value of an agreement therefore includes when its terms become sufficiently clear for both businesses to act.

Price certainty leaves other uncertainties to manage

An agreed price gives a grower an important planning reference. The eventual return still depends on saleable volume, applicable deductions or premiums, delivery costs, and the expenses incurred in producing and holding the crop.

For buyers, a fixed price can support budgeting while creating exposure if market prices subsequently fall. Conversely, a grower may receive less than an available open-market price when supplies tighten.

These outcomes are part of the bargain made when uncertainty is exchanged for a more predictable arrangement. The important question is whether both sides understand that bargain.

A pricing mechanism can be assessed through its assumptions: which production costs it recognises, what quality it requires, when adjustments occur, and which expenses remain outside the calculation. Where a formula or index is used, its usefulness depends on whether the parties can understand and reproduce the calculation.

The Food and Agriculture Organization’s contract-farming guidance emphasises clear pricing arrangements and payment terms, including formulas growers can use to estimate expected payment.

The quantity obligation can change the whole bargain

An agreement covering production from specified land can allocate risk differently from one requiring delivery of a fixed quantity. FAO’s guidance recognises several approaches, including a whole crop, a specified quantity, or a proportion of production. The actual wording determines the commitment.

A hypothetical example illustrates the importance. Suppose a grower agrees to supply 1,000 tonnes, but adverse conditions leave only 800 tonnes meeting specification. The grower has less product available to generate income. A separate question concerns the missing 200 tonnes: does the agreement provide relief, require another response, or create a potential claim?

The answer depends on the contract and applicable law. It cannot be inferred from the headline price.

For the business, however, the distinction is immediate. Reduced crop income and liability for an unfulfilled delivery are different exposures. Understanding both is essential to evaluating what a contract actually protects.

Weather-related obligations are receiving regulatory scrutiny

A recent Polish decision provides a concrete example of concern about transferring weather risk to farmers.

On September 22, Poland’s competition and consumer-protection authority, UOKiK, announced a decision concerning Procam. The authority said the company had required farmers to deliver contracted agricultural products despite circumstances beyond their control and had allowed only two days to report specified force-majeure events.

UOKiK reported that Procam had changed the practices, using new contracts from June 2026, and accepted a penalty exceeding PLN1 million. The products identified included grains and rapeseed; this was not a potato-contract decision.

Its relevance to the potato industry lies in the questions it exposes. Which events qualify for relief? What evidence is required? How quickly must notice be given? What obligations continue afterwards?

A reporting deadline may look administrative on paper. During a damaging weather event, it can determine whether someone must attend to formalities while also protecting crops, equipment, and people.

Relief from an obligation does not replace lost income

FAO’s guidance on problems in contract farming distinguishes events beyond the parties’ control from failures by either side to fulfil its responsibilities. It discusses provisions for suspension, renegotiation, termination, risk sharing, and insurance. Its wider explanation also notes that force-majeure relief does not usually provide payment for the lost crop or cancel loan repayments.

That distinction matters for farm viability. A grower may avoid a contractual penalty and still face a substantial financial loss.

It also prevents unrealistic expectations of what a supply agreement can achieve. Contract terms, insurance, business reserves, and access to finance address different parts of an operation’s exposure.

For industry discussions, the useful task is to identify the remaining risk after each arrangement has done its job. Describing a crop as contracted says relatively little about the business’s ability to absorb a severe production setback.

Quality needs an agreed route from measurement to decision

Quality requirements protect buyers’ ability to use the potatoes they receive. For growers, the assessment determines how much of a delivery earns the expected return.

The commercial questions include how samples are collected, whether they represent the delivery, how results are recorded, and what happens when the parties disagree. A quality specification becomes more useful when accompanied by an understandable assessment and review process.

FAO recommends precise quality descriptions and provision for the farmer or a trusted representative to be present during delivery inspection or weighing.

The potato trade also has its own established framework. The 2025 edition of the RUCIP rules entered into force on October 1, 2025, covering trade practices, expert assessment, and arbitration. The revision included changes concerning claims procedures, tolerances, documentation, and temperature control. Its relevance to a transaction depends on the terms agreed by the parties.

The practical objective is a decision both sides can trace to evidence, with a defined route for resolving disagreement.

Delivery dates distribute costs as well as potatoes

A delivery schedule connects the farm’s handling and storage operation with the buyer’s intake requirements. When that schedule changes, the consequences need to be understood across both businesses.

Consider a buyer requesting that potatoes remain on farm longer than originally planned. The resulting questions could include additional holding costs, the condition required at collection, responsibility for organising transport, and the treatment of any agreed storage payment.

A grower seeking earlier collection creates a different set of questions for the buyer, whose intake capacity and other deliveries must also be considered.

These are examples of issues to resolve within the agreement, rather than evidence that any named business has imposed such changes.

Payment timing belongs in the same discussion. The date a crop is delivered and the date its proceeds become available can affect the grower’s ability to meet other commitments. FAO’s contract-analysis checklist treats delivery schedules, payment obligations, and risk allocation as distinct matters requiring attention.

Grower representation can give the discussion continuity

Negotiations may involve individual growers, representative organisations, or established committees.

On Prince Edward Island, the PEI Potato Board describes contracts with Cavendish Farms and McCain being negotiated through its Processing Committee. This provides a documented example of an organised channel connecting growers with processing buyers.

Such arrangements deserve examination through what they enable: continuity between seasons, discussion of common concerns, and a means of explaining proposed changes.

Representation alone does not establish that every participant has the same costs or priorities. Different varieties, delivery periods, storage arrangements, and farm circumstances can create different interests within a supplying group.

The challenge is to make those differences visible while maintaining a workable negotiating process. For buyers, understanding the reasons behind a concern can be more useful than encountering it only after agreements have been issued or planting decisions made.

New production expectations need practical support

Commercial relationships increasingly extend into how a crop is produced. Where growers undertake additional practices, measurement, or planning, the resources required deserve explicit attention.

A current Canadian example is Farm Credit Canada’s programme linked to McCain’s Regenerative Agriculture Framework. It offers incentives to eligible FCC customers, with payments linked to lending and framework status. The programme also describes an additional C$2,000 McCain input-efficiency bonus associated with working with an agronomist on a Crop Improvement Plan for the 2026–27 season.

This is a specific incentive programme. Its existence does not establish the overall profitability or risk allocation of a grower’s supply contract.

It does illustrate a route for contributing resources alongside production expectations. The wider assessment concerns what participation costs, what support reaches the farm, and whether the benefits remain useful after initial adoption.

A dependable supply chain needs dependable relationships

Buyers also have legitimate exposures. They need suitable potatoes to arrive when required and commitments they can use to plan their own operations.

McCain’s account of working with farmers emphasises long-term relationships, agronomic support, and sourcing near its factories. These are the company’s stated principles; individual agreements still need to be understood through their actual terms.

For both sides, the strongest discussion begins with identifiable responsibilities. Who can prevent a particular loss? Who can respond when it emerges? What information must be shared, and which costs follow the decision?

Risk sharing need not mean dividing every loss equally. A workable arrangement connects responsibility with the capacity to manage it and gives both parties a clear understanding of the exposure they retain.

For the grower deciding whether to plant again, the contract must support a business capable of meeting its commitments. For the buyer seeking dependable supply, that capability has continuing commercial value.

The future of potato farming will be influenced by whether those two requirements can be made to work together.