The Fruit Growers News - February 2001

At a Virginia State Apple Board (VSAB) town hall meeting board members and growers hashed out the facts surrounding a proposed assessment increase. The group was faced with a tough decision. With the apple market slumping, could they afford not to pay more in assessments?

In an effort to keep the Virginia apple industry viable the VSAB is asking its grower members to approve an increase in the apple tax assessment. If approved, in a referendum this March, the increase would be phased in over a three-year period, beginning with the 2002 harvest through 2004.

The board seeks an increase of six cents a bushel for fresh-packed apples, 1-1/2 cents a bushel for fresh ungraded apples and .6 cents per cwt. for processing apples. The increase would bring the fresh-packed assessment to 16 cents a bushel, the fresh ungraded assessment to 6.5 cents a bushel and the processing assessment to 5.6 cents per cwt.

If approved, this would be the first increase to the Virginia apple tax in 15 years. Virginia is the only state of the top six apple producing states that has not increased its assessments in the past five years. “If passed, by the time it takes effect, it will be 15 years since we have had an increase,” said Nancy Israel, VSAB’s executive director. The organization has over 200 members and any one that pays the tax has a vote.

“Between now and the March referendum the board members and I will be meeting with our members and presenting the situation to them,” Israel said. “There will be a variety of meetings and we will try to let our members know what it means for them and Virginia Apple.”

The marketplace is very competitive and Virginia growers, producers and processors are competing globally, as well as locally, regionally and nationally, said Israel. The U.S. Apple Association’s (USApple) recent success in stopping China’s dumping of apple juice concentrate on the U.S. market is just one example of how the apple industry has been thrust into the global arena, Israel said.

The increased assessment will allow the association to provide additional buyer incentives, continue to have a voice in USApple as a full member, provide additional support to the state’s direct marketers, research, the Virginia State Horticultural Society, and processing promotions as well as additional funds for wholesalers and retailers. The assessment is projected to net about $90,000, based on a 6.5 million-bushel harvest

The board agreed to hold a referendum, after a lengthy discussion on the detrimental impact to the Virginia apple industry if there is not an assessment increase. The assessment increase would boost marketing efforts for all phases of the Virginia apple industry: fresh, processed and direct marketing segments.

If the increase is not approved, some programs will have to be eliminated altogether. With the increase, more emphasis will be put on: promotion of the state’s direct marketing industry, an increase in retail incentives, and continued, full support of USApple’s various efforts. Currently, USApple is considering doubling its yearly state dues which would be an approximate $30,000 increase to Virginia.

According to Israel, the board noted that this is a crucial time for the Virginia apple industry and that aggressive marketing efforts are more important than ever. Current services provided by the tax assessment include everything from trade shows and trade missions to media blitzes and retail promotions to full membership in USApple.

“All Virginia is seeking is to come up to par with the other big apple producing states,” said Kraig Naasz, president of USApple.

“Clearly without sufficient funding at the state and regional level it is hard for the apple boards to support our work here,” said Naasz. “I hope the increases are approved, in part because it is necessary.”

“We aren’t sure what the outcome will be,” said Israel. “These are tough times for our members. That is why marketing is so important.”

VSAB collects less than the other top six apple producing states, according to Israel. The increase would push their assessment to a comparable level.

“Full membership in USApple is important. While it is not legal for our organization to lobby, that is an indirect benefit of belonging to USApple. But we cannot support lobbying in any way,” said Israel. The Virginia board is one of many that have had to turn to their growers for an increase in funds.

Before the last assessment increase in July 2000, the Pennsylvania Apple Marketing Board assessed 12 cents per bushel on fresh apples. Today, the tax stands at 15-cents per bushel for fresh apples and eight-cents per cwt. for processing apples, according to Kyle Nagurny, Executive Director of the Pennsylvania Apple Marketing Board.

The New York Apple Marketing Order assessments garners 16 cents per bushel for fresh and eight cents per bushel for direct marketers that sell directly to consumer, according to Pete Gregg, with the New York Apple Association.

Kathy Hampton, with the Washington Apple Commission, reports the state’s fresh fruit assessment is at 86.96 cents per cwt. or 40 cents per 46-pound box. The processing assessment is $1 per ton or five cents per cwt.

The Michigan Apple Assessment Tax currently stands at 49 cents per cwt. for fresh, 25 cents per cwt. for process and nine cents per cwt. for juice, according to Diane Smith with the Michigan Apple Committee.