Study: Maine potato industry worth $540M

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PRESQUE ISLE – Maine’s potato industry is smaller than it was 10 years ago, but its impact on the state’s economy is no small potatoes.

A study commissioned by the Maine Potato Board and released on Wednesday shows that in 2001, potatoes had a total economic impact of $540 million in Maine.

“Very few people would have come up with that number,” Donald Flannery, executive director of the Maine Potato Board, said Thursday, adding that he was surprised at just how much the industry was worth in the state.

Of the total, $293 million is directly attributed to farming, including employment, processing, sales and transportation.

In 2001, sales of Maine potatoes exceeded $125 million, making it the state’s No. 1 agricultural crop, according to the study.

The value of Maine’s lobster industry landings in 2001 was $153 million, according to the study.

The study also revealed that more than 5,000 people were employed directly and indirectly in the potato industry, with a payroll of almost $195 million.

“That’s pretty much 5,000 jobs right here in Aroostook County,” Flannery said.

Along that same line, the study showed that in 2002, 756 students worked in a harvest-related job and earned more than $750,000.

“We’d have a hard time replacing those bodies” if the harvest break for students were eliminated, he said.

The Maine potato industry also pays nearly $33 million in state and local taxes annually.

The study was conducted by Planning Decisions Inc. of Hallowell to provide hard data that have been lacking. Charles Lawton of PDI presented an overview of the data to the board on Wednesday.

He noted that in 1977, Maine held 8 percent of the national market, but by 2002, that had dropped to 4 percent.

At the same time, yield per acre in Maine has remained relatively unchanged over the last decade, while it has increased 7 percent nationally.

“There has been a failure on the part of Maine to mirror the increase in national yields,” Lawton said. “There’s clearly a challenge to the industry.”

Of the 11 states that harvest potatoes in the fall, Maine ranks sixth in terms of acres planted, eighth in terms of production and 10th for overall yield.

Acreage in 1992 was 81,000, but since 1998, the numbers of acres planted has stabilized at an average of 64,000.

“While Maine’s [share] is relatively small, it seems to have reached a plateau,” Lawton said. “If the financial health of the remaining producers can remain stable, any further decline can be stemmed.”

Vernon Delong of the Agricultural Bargaining Council said at Wednesday’s meeting that acreage this year is up about 3,000 acres.

A big factor in increasing yield will be if more Maine farmers make use of irrigation, which has a direct impact on crop yield, Lawton said.

Maine ranks last among fall-harvest states for the use of irrigation. Only about 30 percent of the state’s potato farmers use irrigation, even if they have access to water, the study said.

One reason so few farmers irrigate is that many don’t feel the investment would be worth the benefits. Others indicated that their water resources were inadequate or that the permitting process was too cumbersome.

“Our competition has water and available water,” Flannery said Wednesday. “If we want to compete, … we have to have more irrigation in Maine.”

The 33-page report also showed that over the last 10 years, the amount of potatoes being raised for production purposes, such as french fries and similar products, has increased 42 percent, while potatoes grown for the fresh market had declined by 44 percent.

The numbers of potatoes grown for chips and seed have remained relatively stable.

“Finding out what the customer wants is the key to future success of the potato industry,” Lawton said.

Some key recommendations made in the study are:

. Increase investments in water resources for irrigation.

. Establish a closer relationship with consumers regarding purchasing preferences.

. Improve business management priorities.

. Strengthen and diversify the processing sector.

. Improve public relations as it pertains to the use of student labor.

Flannery said the board is always being asked by state and federal officials for information about employment and economic impact regarding the potato industry.

“We now have answers for that,” he said.

“This will be an important tool for us to make people aware of how important agriculture is to our way of life,” he said. “We’re going to make sure this information gets out there.”

He said the board also will urge the state to undertake a similar study for its entire agricultural sector, since none currently exists.