Apple business is tough

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PENTICTON, B.C. -Peter Simonsen does not need old photos or evenhis own memories to recall the past. It is growing steps from hisfront door, in leafy rows of apple trees planted nearly a centuryago in the rich earth overlooking British Columbia's Lake Okanagan.
It was not long ago that most of the kilo-metres of country roadthat wind toward Mr. Simonsen's orchard passed by trees like hisancient relics. Today, the landscape is much changed. Instead offruit trees, there are now acres of vineyards, their trellised rowsinterrupted only by the occasional mansion or cavernous winerybuilding.
In an area once so renowned for its fruit that a nearby town iscalled "Peachland," Okanagan's hillsides are beingdramatically reshaped to modern tastes. Now it is the massivegrowth as a luxury wine-producing region that is bringing Okanagannew wealth and international appeal.
But it has also brought a thorny new set of problems for peoplesuch as Mr. Simonsen, who have watched apples and other fruitsbeing torn from the ground to make way for the grapes.
"The grape industry is threatening my existence and making ithard to enjoy my wine," Mr. Simonsen says. He blames the B. C.government and its protectionist wine-selling policies, which"is choosing winners and losers in agriculture," he says.
His complaint is shared among many orchard growers. The pricescharged for wines in B. C. can be double what is charged justacross the border in Washington state. By setting a high price forlocal wine, Mr. Simonsen says the provincial government is creatingan artificial market and propping up a product -- grapes -- thatwould otherwise not be economical in the Okanagan growing area.
And there is growing evidence the booming grape crop is coming atthe expense of the orchards. In the past decade, the province losta third of its orchards, or 3,440 hectares. In 1997, the provinceproduced 7.5 million pounds of apples. Last year, it produced fourmillion. In that same period, the province's grape production morethan tripled and its vineyard acreage grew by more than 3,000.
The B. C. government disputes allegations that it has played a rolein grapes' ascendancy --and orchards' descent.
"In fact, we've made huge commitments to the tree-fruitindustry in the way of replant programs," says Pat Bell, whoserved as agriculture minister until a recent provincial Cabinetshuffle. Since 2001, the province has spent $33-million to helporchard growers plant new and more profitable varieties.
Still, the province's wine industry does benefit from avineyard-sized loophole in the way wine is priced. The B. C. LiquorDistribution Branch, which sets the price of alcohol, collects a117% markup on all wine sold in government-owned stores in theprovince. But if B. C. winemakers sell their products directly toprivate liquor stores or restaurants, the loophole allows them tokeep much of that markup themselves.
That extra profit is enough to sustain an industry in a place whereyields are often half or less what they are in warmer wine-growingregions such as California or southern France, Mr. Simonsen argues.
Those who actually grow the grapes, however, say government has hadnothing to do with creating an industry whose product is so popularthat very little is ever left to export from the province.
"The main reason for the success of B. C. grapes has been thequality," says Fred Freese, a small vineyard owner andpresident of the B. C. Grape Growers Association. "We've madehuge strides since the early '90s when we switched tovinifera." Vinifera is the species of vine that produces theworld's best-known grapes.
Still, what makes the switch to grapes even more galling to fruitgrowers is that by their calculations, orchard fruit makes moremoney.
"If you're willing to invest heavily and build a winery and arestaurant, you may actually come out ahead," says JoeSardinha, president of the B. C. Fruit Growers Association."But revenue-wise, you still stand to make more growing treefruit than growing grapes for the sake of growing grapes."
He does admit to a grudging admiration for the wine industry, whosemarketing has produced tremendous results.
"They've got the branding and that's worked exceptionallywell. Maybe there's even a few things that we can learn from themfor the tree fruit industry as we go forward and look at newmarketing strategies," he says.
For now, the orchard growers are just trying to stay above water.The rapidly declining harvest has brought packing houses to theirknees. To avoid closing, the province's four main packing housecooperatives merged into a single entity this year called theOkanagan Tree Fruit Co-operative.
Growers like Mr. Simonsen have also begun to agitate for greatergovernment involvement to save tree fruits through anti-dumpingmeasures or other farm supports. Yet even he admits there is acertain inevitability to the forces reshaping the Okanagan. Applessimply don't have the appeal that grapes do.
Besides, as Mr. Freese points out, history has taught thatagriculture never remains static. "A hundred years ago, thiswas ranch country. Then in the '20s they were growing melons andcantaloupes. Then we had orchards and now a lot of them have goneinto grapes," he says. "It's an evolutionary thing."