Maine potato farmers want to parboil Canada

"We have the longest friendly border in the world -- but I don't think we can sit and watch the Canadians put us out of business." From her office overlooking the gently rolling landscape of Maine's northernmost county, Dorothy Kelley, executive vice-president of the Maine Potato council, was describing the latest challenge to the farmers she represents: the upsurge of potato imports from Canada.

A lobbyist who frequently visits Washington, she talks of legislation to be introduced by Maine Sen.William S. Cohen (R) and Idaho Sen. Steve symms (R); of requests to the President for relief; and of the need for coutervailing duties, tariffs, and surtaxes. But in his office overlooking the parklike experimental farm in the heart of Ottawa, K. M. Hunter, who tracks developments in the potato business for Canada's ministry of agriculture, casts the situation in a different light. "I think we're in a new era of marketing," he said in a recent interview. The Maine farmers, he noted, are "claiming as their own some of the new market areas we have been trying to develop."

The solution cannot come, he feels, through duties, quotas, or other restraints on trade ruled out under the General Agreement on Tariffs and Trade (GATT), to which both nations subscribe. The Maine farmers, he said, "will have to go out and do their fighting in the marketplace."

According to Mrs. Kelley, the evidence that a fight is needed comes straight from US Department of Commerce statistics. In 1975-76, the UNited States exported 242,000 metric tons of potatoes to Canada -- a figure which fell to 78, 000 tons in 1979-80, and which she thinks fell even further last year.

But in the same period, she said, imports from Canada jumped from 29,000 tons to 85,000 tons, and probably continues to rise. The result: In 1979, Canada began shipping the US potatoes than it took in return.

Why this turnabout?

Both Mrs. Kelley and Mr. Hunter point to a factor keenly felt here in this peninsula of New England surrounded on three sides by Canada: the Canadian exchange rate.

With the Canadian dollar costing Ameri cans only about 80 cents this summer, importers have been able to buy Canadian products at an effective 20 percent discount -- including potatoes.

The effect has been a price advantage for New Brunswick and Prince Edward Island growers that leaves farmers here feeling a bit helpless. As Larry Park says from the dooryard of his 94-acre farm south of Presque Isle, "Would you take 20 percent less for your job?"

Another problem centers on seed potatoes. The US currently has import quotas on Canadian "table stock" (eating potatoes) of 45,000 hundredweight, and 114,000 hundredweight on seed potatoes -- with lower tariffs on the latter.

Under GATT, these quotas are to be phased out by 1986. In the meantime, however, both American and Canadian officials suspect that some Canadian potatoes coming in for seed are being resold as table stock. But as Mr. Hunter points out, the blame is not entirely on the Canadians. Such reselling, he says , "takes collaboration of the [Canadian] shipper and the [US] buyer."

Underneath these current problems, however, lies an even deeper distinction between these two nations. Canada leans more toward a European brand of socialism than does the US -- and Maine farmers, lumbermen, and fisherman generally feel that they are being asked to compete in an open market that is not really open. Theyt complain that subsidies provided by the Canadian government cut the cost of doing business for Canadian producers, providing a price advantage even without an unfavorable exchange rate.

Mrs. Kelley, comparing government benefits for potato farmers in the two countries, lists seven categories of help provided by Washington. These include Farmers Home Administration loans and subsidies for conservation practices.

By contrast, she can name 23 categories of benefits in Canada, many of them in the form of outright grants. One big one, she notes, is the lack of any farm property tax in New Brunswick. On her own 127-acre Maine farm, she pays about $ 1,200 in taxes.

Another difference: fuel adjustments and freight subsidies intended to bring down the comparatively high cost of shipping to and from Canada's isolated eastern provinces.

So should the US government, rather than backing away from further subsidies under the Reagan administration, do more for its farmers?

Mrs. Kelly thinks it should. But many Maine residents interviewd by this correspondent in a recent week-long swing through Aroostook county are not sure. They retain their free-market philosophy even as they complain about Canadian subsidies. And many of them -- even those in the farming and lumber business who feel the pinch most deeply -- realize that tariff barriers would hurt both nations in the long run.

Says Kenneth Curtis, the former governor of Maine who was ambassador to Canada under President Carter: "We have more to gain from good relations than poor relations."

And farmer Larry Park, asked how Washington could help him the most, replied flatly: "Get the government out of the farming business." Government subsidies prop up poorly run farms, he says, making it harder for well-managed ones to compete.

Meanwhile, the economy of this county continues to depend heavily on potatoes , with some 106,000 acres planted this year. Schools here started Aug. 17 -- so that they can shut for three weeks in September for the harvest. Local schoolchildren earn between $3 million and $5 million a year, Mrs. Kelley says -- getting about 50 cents for every 165-pound barrel they fill.

And there are signs that the growers are beginning to think more carefully about how they market their product. Al Irving, a Presque Isle grower and truck broker, is one of those who feel the 800 to 1,000 Maine growers haven't advertised their product enough.

He says the proximity of the Boston and New York markets should give Maine growers an advantage over both Canadian and Western growers -- although he admits that, because of Maine's geography and sparse population, many truckers cannot find return loads to bring back after they have-unloaded their produce.

Mr. Irving is also working to revise the standards for Maine potatoes, so that the so-called "Maine bag" will contain consistently superior produce. That has not always been the case. "We get complaints constantly," Mrs. Kelley says, "that the potatoes go from marbles to baseballs."