Tasmania's state minister for primary industries, Steve Kons, wants the Australian federal government to tighten up laws relating to chemical residues on imported goods.

Mr Kons is angry over what he claims is "unfettered access" by New Zealand into Australian markets, and told ABC Radio today that the state government would examine the chemicals used in vegetable production in New Zealand.

"It's an issue that's impacting significantly on us, with the potatoes and other crops being impacted upon with imports, so at this stage it's a State Government initiative," he said. "We hope to get the other states on board."

Mr Kons' chemical residue campaign, and a parallel bid to ask the Australian Government to abolish New Zealand's seat on the trans-Tasman Ministerial Council for Primary Industries, coincides with the cancellation of purchase contracts for nearly half the Tasmanian potato crop.

Simplot Australia has lost half of its deal to supply french fries to the McDonald's fast food giant -- probably to McCains in New Zealand -- and must bid for the remaining 50 per cent of its supply contracts.

The cutback represents an eighth of Simplot's potato processing business and in response the company has reduced the amount of potatoes it gets from contracted Tasmanian growers by 43,000 tonnes.

For the past eight years, Simplot Australia has provided all of the fries used by McDonald's in Australia.

Simplot managing director Terry O'Brien said: "There is a fair chance we will retain the other 50 per cent. But it depends where the other potatoes are coming from."

The ABC reported that McCain Foods had snared what Simplot has lost and that Tasmanian growers suspected the potatoes were to be shipped from New Zealand. Simplot Australia's contract cuts will cost A$10 million ($10.8) million at the farm gate each year and bleed A$50 million from the Tasmanian economy.

The situation is compounded by the lack of another crop to fill the gap created by the Simplot cutbacks.

In New Zealand, the Food Safety Authority (NZFSA) said New Zealand limits for chemical residues on fruit and vegetables were in line with international standards.