Potato farmers have lost money because they planted too many potatoes last season for the market, which has led to a drop in price.
The National Potato Conference in Maynooth, Co Kildare, was told by Mr Tom Maher that many growers incurred losses of up to €1,250 a hectare or €500 an acre.
He told the conference, organised by Teagasc and the IFA, that excellent harvesting conditions and good yields had contributed to the price drop.
Mr Maher said farmers would need to reduce the acreage they planted last year - 34,000 acres - by 15 per cent this year to achieve the profit levels which existed in 2001 and 2002.
"While exports of our leading variety, Rooster, to Britain and the purchase of the Northern Ireland potato processing plant, Ballymoney Foods, by Southern and Northern growers are welcome developments, the reality is that the area planted in 2003 was too large for the markets which exist," said Mr Maher.
The president of the IFA, Mr John Dillon, said the potato industry required a processing facility to head off imports which had increased dramatically.
He said the import of frozen chips alone each year amounted to 100,000 tonnes, which was the equivalent of 30 per cent of the Irish crop. "We need a potato processing facility on the island of Ireland to maintain supply to local markets and displace rising imports of processed potato products."
A British marketing expert, Dr Martin Caraher, told the conference the deciding issue was product price. The increasing market power among a decreasing number of retailers had serious implications for farmers.