Positive for poppies

There is good news for Tasmanian poppy growers with a lift in area and prices for upcoming season.

Negotiations between Poppy growers Tasmania and Extractas Biosceince and Sun Pharma have now been completed and  both companies will soon be signing on growers as the planting season looms.

While there are some different contract options, this season both companies will effectively be offering a six per cent price increase.

In another positive for the industry, the amount of crop area required this season is also increasing.

Extractas hopes to grow more than  3000ha this year, while SunPharma will be looking for about 1900ha.

PGT chief executive officer Howard Nichol said while the grower group would have liked to have seen a bigger price increase, it was a pleasing result.

“We would have liked more, but six per cent is an increase,” he said.

“And it’s reversing the trend which has been occurring for a good few years, both in price and in area in total.”

Mr Howard said SunPharma is offering a 21 per cent increase this season, however that comes off the back of a 15 per cent decrease in prices last season.

Extractas have put forward an option for growers to receive an extra 10 per cent bonus payment if they choose to defer their post-harvest payments until later in the year.

Mr Nichol said this may be a good option for growers whose cash flow situation allows them to defer their payment.

SunPharma is also offering growers the opportunity to grow a new variety this year, which has higher assay levels, but lower yields.

 Mr Nichol said their price offer for that variety is higher to account for the lower yields.

While this year’s crop of about 6000ha is well down on the industry’s peak of about 30,000 10 years ago, Mr Nichol said crop yields had also  doubled during that time. Mr Nichols said the price and area increases should help to make poppies a more viable crop for many farmers.

Earlier this year during the harvest period, Mr Nichol said it was also pleasing to see senior management from both companies visit the state and meet with growers.

“That was really important and we encouraged that and we’ve been working with them for quite a while,” he said.

Mr Nichol said the poppy returns for many growers last season were not high enough and as a result  many farmers were choosing to grow other crops.

“The message I was clearly getting from growers out and about is those that weren’t growing last year weren’t missing growing poppies,” he said.

“That’s the message we wanted to get to the companies and that’s the message the senior management got when they came and visited.”

There is still significant pressure on an both companies due to global opiate market conditions.

Given that,  Mr Nichol said he was confident the companies had done the best they could to meet the organisation’s request for a price increase.

“Six per cent is an increase, we would have loved more, but it is something,” he said.

“I’d say we’re not delighted, but we are pleased.”