Big Businesses Also Get Rural Aid

Wednesday, December 5, 2007

Chances are you haven't heard of Mike Fagan and his Alligator Trading Co. Fagan's small business in Dade City, Fla., about 35 miles north of Tampa, makes belts and wallets from alligator hides. He has four employees, including his wife, and hunts gators himself.

Fagan's company is among more than 700 that have shared $130 million since 2001 as part of the U.S. Department of Agriculture's Value-Added Producer Grants program. The goal is to help rural businesses cover marketing and development costs to expand their markets. Fagan's firm is on the small end. But the USDA has also awarded millions to giant food co-ops such as Welch's and Sunkist, as well as wine growers in California's Napa and Monterey counties.

Welch's has received four grants totaling $1.15 million since 2001 through its parent company, the National Grape Cooperative Association. The self-described world's leading manufacturer of Concord grape products used the money to launch a fruit-and-granola breakfast product and new products in Britain and Mexico.

Blue Diamond Growers, a California almond co-op with more than 3,000 members, got a $478,500 grant to launch a line of salad toppings. Sunkist Growers Inc. received $450,000 to market a packaged fresh-cut orange product. In all, more than $10 million went to large co-ops and trade associations in the past six years, a Washington Post analysis of the awards found.

Randy Torgerson, a former director of the program, said the awards were consistent with the legislation, adding that the larger firms could "probably make better use of that money than some of the fledgling companies."

But others question why the USDA should help underwrite marketing expenses for large corporate groups. "I think it's best to target tax dollars to small family farmers looking to diversify," said Kim Leval of the Center for Rural Affairs in Nebraska, which works with small farmers. "We should not be funding the marketing departments to expand Welch's grape juice in the U.K." A Welch's spokeswoman declined to comment.

Alligator Trading received a grant of $132,660 in 2002 to identify new markets. "What we learned was you can't just sell these products anywhere. These are high-end products and have to be treated as such," said Fagan, 63.

-- Gilbert M. Gaul

© 2007 The Washington Post Company