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34 POTATO GROWER | SEPTEMBER 2016 34 POTATO GROWER | SEPTEMBER 2016 CHAINED TO THE SHIP…REALLY? Don't be a slave to unprofi table practices United Potato Growers of America Jerry Wright President & CEO The Place to Go for Potato Equipment Contact Our Specialists! 5802 N Industrial Way, Suite D Pasco, WA 99301 800-572-0391 potatoes.eiijd.com PO Box 548, Othello, WA 99344 Travis Chlarson.............509-750-4747 Gary Hoffer....................509-331-6160 Joe Davis........... ..............541-282-4031 Let our specialists help you plan and configure the equipment to meet your needs, including: planters, harvesters, eliminators, seed cutters, pilers, etc. They can integrate any combination of products. 151351EveImp13h.indd 1 11/6/15 3:05 PM A few years back, a new business model appeared on the potato marketing and sales scene. It changed everything. Rather than growing its supplies or purchasing them outright, this new model contracted with growers on a price-after-sale basis—a field-level consignment approach, you might call it. Surprisingly, growers flocked to participate. Because goods were consigned, the only way competing sales organizations could survive was to also acquire consigned—unpriced—goods. Because of the unlimited profitability of selling unpriced goods, the business model has now been replicated by at least five similar nationwide organizations. Who wouldn't want a deal like that? While some of these organizations began as potato-growing operations, and some even continue growing potatoes, their profit from marketing and selling consigned potatoes far exceeds what profits would be if the potatoes were either grown by them or purchased outright. What has this switch meant to the grower/supplier of fresh potatoes? Remember the movie Ben-Hur (the 1959 Charlton Heston classic, not the just-released remake)? Wrongly accused of a crime by a Roman court, Judah Ben-Hur was sentenced to serve as a slave rower on a Roman galley—a fighting vessel. Slave rowers were chained to the ship; their options were to row well so that the galley survived the battle, or to sink with the ship. As these large multi-state, price- after-sale organizations have spread across the fresh-potato industry, Ben- Hur's plight has become an excellent metaphor for the plight of the fresh potato grower who supplies one of these organizations. How has the grower become a slave? Since a grower depends on his shipper/ sales organization to turn his crop into cash, he is likely to do as his shipper/ sales organization commands: row the ship—grow more potatoes. But, since these shipper/sales organizations make their money on volume combined with any profit margin they choose to set, they always want more volume, and since volume dictates price, do you see a conflict of interest in this relationship? The grower is encouraged to go against his own interest by oversupplying the very market on which he depends for economic survival. Does this make evil people of the owners of the sales organizations? Does this make them exploiters of the hapless grower? Not If a grower is willing to go below decks—in fact, fi ght for the privilege of manacling himself to the ship and rowing it for the captain's benefi t and not his own—nothing is going to change.