Blueberry panel reviews taxes

HANCOCK – Promotion of the wild blueberry industry has helped build demand for the expanding crop in Maine and Canada during the last decade.

Nonetheless, issues surrounding the funding of that effort through the Wild Blueberry Association of North America has been a steady source of irritation for American growers and processors, who argue that they are paying more than their Canadian counterparts for those efforts.

Ed Flanagan, chief executive officer of Jasper Wyman & Son in Milbridge, raised the issue again Monday and urged the Maine Wild Blueberry Commission during its meeting to cut the tax charged to growers and processors in Maine in an effort to reach funding parity for WBANA.

The state levies a 11/2-cent per pound tax on wild blueberries grown or processed in Maine. That tax is split between growers and processors, with about two-thirds of the amount raised allocated to WBANA. The remainder funds other programs of the commission.

The problem is twofold, in that not only do the Canadian processors pay less than the Americans, but the Canadian dollar is valued at just about two-thirds of the American dollar.

Flanagan said the Maine industry has tried to resolve the issue through cooperative efforts and negotiations, to no avail.

“It’s one thing when the field price and the selling price is at a level where you can make a living,” he said. “But with the economic scene in Maine and the predatory pricing coming out of Canada, the time for collegial negotiations is over.”

Canadian processors are not dumping berries into the market, but they have operating advantages – including government land subsidies and cheap power – that allow them to greatly undersell American processors, he said.

“And I’m mad,” Flanagan said. “I’m not willing to give them a free ride on WBANA funding any more.”

Growers are upset, and there has been some talk of seeking legislation to deal with the parity issue. Some commissioners, however, noted that cutting the tax would put the funding level for the commission back to where it was several years ago. They also expressed concern that lessening the contribution to WBANA would weaken its promotional efforts.

The state Legislature last year approved an increase in the blueberry tax, raising the rate from a penny to 11/2 cents a pound.

Such a cut also would affect other commission programs, executive director David Bell said.

Commissioners rejected Flanagan’s proposal to cut the blueberry tax, but expressed similar concerns and did not dismiss the issue entirely.

“Something must be done,” said Commissioner Del Merrill. “It’s very important, but it must be thought through clearly.”

Merrill urged a special commission meeting to deal solely with the issue. That session was set for Dec. 20.

In other action Monday, the commission adopted a $1.7 million budget for the 2003 fiscal year. The budget included a $635,000 allocation for WBANA, but commissioners indicated they could reconsider the budget and that allocation when they meet in December.