Decision on how much to increase fee up to USDA chief


Capital Press

The blueberry industry is evenly split on the prospect of doubling assessment fees to stimulate consumption of the crop, judging from comments to the USDA.

The number of remarks favoring and opposing the assessment hike were roughly equal during the comment period, which ended in late September.

Most arguments against the fee hike focused on the economic hardships farmers are suffering due to low prices for the fruit.

"It's something we're all aware of," said Mark Villata, executive director of the U.S. Highbush Blueberry Council.

At the request of the council, the USDA in July proposed raising the assessment on blueberries from $12 per ton to $24 per ton. The council uses the funds to promote the crop.

The council requested the fee increase because global production of blueberries may double in the next five years or so, from 600 million pounds to 1.5 billion pounds.

For demand to keep pace with burgeoning supplies, annual domestic consumption of blueberries would need to rise from about 22 ounces to 44 ounces per person, Villata said.

At current production levels, the council's proposed assessment hike would boost annual revenues for research and advertising from $2.4 million to $4.8 million.

The additional funds would be used to promote the fruit's use in military and school meal programs and develop export markets for U.S. blueberries, Villata said. Currently, about a third of the U.S. crop is shipped overseas.

"We could be more aggressive in those areas," Villata said.

Enhanced promotions will be needed because other food commodity groups are also heavily publicizing their crops' health benefits, Villata said.

Such claims have been a major driver of blueberry consumption in recent years.

"Our message is getting diluted," he said. "We're not the only player out there."

However, several growers questioned why the council needed to increase assessments when production growth would already contribute to rising revenues.

By doubling the assessment, the council would basically see its income quadruple, farmer David Beach argued.

"That is excessive," Beach wrote. "None of us are getting that kind of increase in value for our farms' production."

Other growers claimed that higher assessment fees -- combined with growing input costs and blueberry prices at about $0.30 per pound or below -- would put many farms out of business.

Some growers questioned the value of USHBC promotions, while others said their own marketing efforts are effective enough.

Blueberry farmer Lynn Thompson stated that the public is already saturated with health benefit messages.

"The awareness is already at a high level; addition(al) promotion, I believe, is excessive and redundant," Thompson wrote.

Farmer Phil Olson said he opposed the assessment hike because, unlike production expenses, the fees are not tax-deductible. Unprofitable farms must still pay assessment fees, even if they don't owe taxes to state and federal governments.

"Having a tax imposed on a product with no consideration of the value of this product just makes no economic sense," he said. "If a graduated income tax makes sense for the IRS and our federal income tax codes, then it should make sense here."

Farmers, packers and associations that supported the assessment hike generally said that unless promotions were amplified, the industry's economic situation would get even worse.

The promise of strengthening the link between blueberries and health was a strong theme in supportive comments.

"The health message that has been such a shot in the arm for the blueberry industry needs to continue and move into actual human clinical trials," farmer Jeffrey Jawor wrote. "If it can be proven that blueberries can prevent or even cure a disease, the positive impact it would have on the industry would be enormous."

The decision whether or not to increase the assessment is ultimately up to the USDA Secretary Tom Vilsack, who may also decide to reduce the size of the increase.

The USDA's Agricultural Marketing Service will consult with its lawyers and economists about the proposal, then turn the information -- along with grower comments -- over to Vilsack, agency spokesman Jimmie Turner said.

The USHBC hopes to have the assessment in place by next year, but Vilsack does not face a deadline.

"There's no time frame to decide what to do," Turner said.


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