Maine potato farmers battle strong US dollar, Canada imports

Spud wars. That's what Maine potato growers expect in Eastern potato markets this year as they face an expected small harvest and an anticipated rush of Canadian potatoes into the United States.

The potato battles have already spilled into the courts. In addition, Maine growers are pushing for legislative relief in Congress, even though the tide of free-trade politics in Washington is running against them.

Among the most formidable hurdles Maine growers face is the strong American dollar, which currently enables Canadian growers to sell their potatoes in US markets at an effective 25 percent discount.

This year's small Maine harvest comes, in part, as a result of an unusually wet spring that destroyed an estimated 10 percent of the potatoes, or 94,000 acres worth, planted by Maine farmers.

In addition, growers say that an unusually dry August prevented the surviving potatoes from ''sizing up.'' The result was small potatoes and smaller anticipated profits for Maine potato growers.

''To meet the competition we are going to have a tough time,'' says Dorothy Kelley, executive vice-president of the Maine Potato Council.

Last year, according to the National Potato Promotion Board, Maine ranked a distant third in overall US potato production, behind Idaho and Washington State. This year, experts say Maine may drop to as low as fifth or sixth place among the nation's top potato producers.

Three decades ago, Maine farmers were cultivating about 300,000 acres of potatoes. Now, an estimated 950 potato farmers in Maine are cultivating some 94, 000 acres. Last year was the first season since 1904 that Maine potato farmers planted fewer than 100,000 acres.

A concern of potato growers is the effect that Canadian potatoes may have on market prices. Canadian potato imports, Mrs. Kelley says, increased by about 700 percent between 1978 and '80 and are still growing.

''There has been an early influx (this year) of Canadian potatoes in the Eastern US markets traditionally served by the Maine potato industry,'' says Ed Plissey, executive director of the Maine Potato Commission.

''Prices offered by the Canadian producers are substantially below what the market should dictate, based on the supply picture as we see it.''

Mr. Plissey says the price structure in the wholesale potato markets in key cities such as New York and Boston ''deteriorated rapidly'' in early September as a result of Canadian imports. The Canadians, he says, apparently were concerned that potato prices might plunge once the American fall harvest got under way.

''It was panic selling,'' he says. It came at a time when the US potato industry was experiencing its ''normal fall jitters, when nobody knows how big the national crop is going to be,'' Plissey says.

Maine growers have long complained about the entry of Canadian potatoes into markets that have traditionally belonged to Maine producers. These growers charge that the Canadian product is aided through government-supported transportation and other effective subsidies that give the Canadian growers an advantage.

''We can compete grower to grower, but we can't compete grower to government, '' says Greg Smith, a fourth-generation potato farmer in Westfield, Maine. ''I guess all you can do is do the best you can and try to compete.''

Canadian agriculture officials disagree with the assessment of the Maine growers. ''From our point of view the problem is that the Maine producers should upgrade their own product instead of complaining about imports,'' says Terry Norman of the International Trade Policy Division of the Canada's agriculture department.

While a federal subsidization program exists for potato farmers in Canada, Mr. Norman says no such payments have been determined to be necessary ''in recent years.'' As with any perishable product, he says, Canadian farmers sometimes have been forced to sell their potatoes below their cost of production.

Last year the Maine Potato Council took the Canadian potato issue to court. Some US Commerce Department officials who looked into the matter sided with the Maine producers. But the Court of International Trade ruled against Maine.

The court, says Norman, found that Maine growers were hurt more by their own marketing and grading practices and by competition from other states than by competition with Canadian growers.

The potato council is currently appealing the case. It is not expected to be decided for several months.

Potato farmers aren't the only ones complaining about Canadian imports. There have been protests in recent years from New England fishermen and lumbermen charging that cheap, subsidized Canadian goods were disrupting US markets.

The International Trade Commission is currently investigating the impact on the New England fishing industry of imports of Canadian cod and other fish. An ITC report is expected by the end of the year.

According to Kelley, who filed her first petition against Canadian imports in 1979, a basic problem is that American politicians in Washington are fierce supporters of free-trade policies and are suspicious of American industry requests for relief.

The majority of Maine growers, she says, are also free-trade advocates who want only to be able to compete on an equal footing with the Canadian growers.

''I don't know of any grower in the area who wants to be subsidized,'' she adds.