Tasmanian Alkaloids narcotic raw material business director Doug Blackaby said a Victorian crop would mitigate threat from international competitors.

During his presentation at PGT's annual general meeting at Longford, Mr Blackaby also said the company had gained regulatory approval to sell codeine phosphate products - a process that took two years.

``At some point we're going to have to embrace the situation of growing in Victoria,'' Mr Blackaby said.

``My desire is to offer (the US market) an alternative and it may work, it may not.

``Otherwise what we fear the most - that's the downsizing of our industry, more competition - we will be faced with that if we don't take this great leap of faith at some point.''

Questions rose regarding the potential for crop leakage, or theft, with interstate and organised crime surrounding poppies on the mainland.

Grower George Mills said he feared increased chance of leakage if trials were conducted interstate, which would damage the reputation of Tasmanian Alkaloids and its suppliers.

PGT chairman Glynn Williams said the association would lobby to introduce genetically modified poppies to Tasmania and stifle any efforts to float a tax on poppies.

Mr Williams said that Tasmania was suffering from potential competitors interstate by having a ban on genetically modified crops, which could reap greater yields for growers.

Tasmanian Deputy Premier Jeremy Rockliff said the government would introduce a research and development program to improve crop yields in Tasmania.

Mr Rockliff said he would also encourage poppy growers to invest in alternative crops.