Stalled price deal leaves poppy growers in limbo

THE future of the state’s upcoming $50 million poppy crop is up in the air after a breakdown over farmgate prices.

Poppy Growers Tasmania president Philip Loane said the industry was at a crossroads because of a continuation of sharply declining returns.

“It was bad last year but it’s now seriously worse,” he said.

The poppy industry was worth $46-48 million at the farmgate last year from the 13,500ha grown.

At its peak the industry was worth $110 million at the farmgate but a world oversupply has caused smaller plantings in recent years.

Extracts from the poppy capsule are used in a range of pain relief medications.

It is understood that Tasmanian Alkaloids proposed a price drop of up to 5 per cent for its codeine variety and Sun Pharma proposed a price drop of up to 12 per cent for the Thebaine variety in the 2018-19 crop.

It is the first time in many years that Poppy Growers Tasmania, the growers’ representative body, has not endorsed a processor’s price offer.

Mr Loane said growers were faced with a decision on whether to plant the crop during winter.

“On our analysis, without increases in the very short term, growers will now actively exit the industry,” he said.

“Expected returns are no longer providing farmers with a sustainable base to operate from.”

He said farmers were faced with a situation where the risk of financial loss from a bad year could outweigh returns from several average years.

“Not many years ago pop- pies were one of, if not the apex crop, and yet now we see them fallen to the bottom,” he said.

Poppy Growers Tasmania chief executive officer Keith Rice said farmers were free to make their own arrangements with the companies.

“It’s just that the committee felt it could not recommend the current contracts,” he said.