Specialty grants bear fruit and complaints
Growers say money helps create new industry opportunities
By STEVE BROWN
NYSSA, Ore. -- Onion growers in Oregon and Idaho have their sights set on the Asian export market, but they needed a way to assure foreign customers that no excess pesticide residues are on their crops.
By combining their money with federal specialty crop block grants, they were able to do that.
Kay Riley, owner of Snake River Produce, said he and other onion growers were concerned that any level of pesticide residue posed the risk of disaster for their plans to enter the export market.
"We knew the only way we can control this is to test our onions for residues," he said. "So we formed a nonprofit and applied for a grant."
In 2009 they formed Certified Onions Inc., which received an $85,000 specialty crop grant to provide third-party certification testing -- through the Oregon Department of Agriculture and Oregon Laboratory Services -- for pesticide residues and pathogens.
"We're testing 92 to 94 percent of the onions in the valley," Riley said. "The first year we tested for off-label. Now we do (maximum residue level) testing so the tolerances are in line."
The coalition of 24 growers also received $92,500 and $91,900 in 2010 and 2011 to promote their voluntary testing. All were dollar-for-dollar matching grants, Riley said, meaning growers pitched in equal amounts of money.
Certified Onion growers sell about 22,000 truckloads of onions into the domestic market every year, but breaking into the Asian market represents a big step.
"If it becomes a brand of choice and we sell 50 loads a year (into the Asian market), that's a phenomenal benefit," he said. They now supply Costco stores in Japan and attracted more business at the recent Food Ex show in Tokyo.
Certified Onions is one of several success stories for the specialty crop grants, farmers and state and federal agriculture officials say. Over the past six years, $182 million in the grants have been distributed nationwide.
Of that, 42 percent went to producers and cooperatives in California and the Northwest. Proponents said the grants are an offset to subsidies for program crops such as corn, wheat, soybeans, rice and cotton that received the lion's share of federal funds in the 2007 Farm Bill.
Each year state departments of agriculture invite specialty crop growers and cooperatives to apply for grants, which the state officials award. In 2011, the USDA spent more than $54 million on 740 projects across the country.
California received $18.7 million -- by far the largest amount sent to a single state. Idaho received $1 million, Oregon $1.7 million and Washington $3.1 million.
While many of the grants have drawn praise for sparking specialty crop sales and marketing, others have come under fire from critics like U.S. Sen. Tom Coburn, R-Okla.
A member of the Senate Finance Committee, Coburn recently released his "2011 Wastebook: A Guide to Some of the Most Wasteful and Low Priority Government Spending of 2011." The book targets several specialty crop grants:
* The Hawaii Department of Agriculture awarded $48,700 to the Hawaiian Chocolate Festival. The festival charged $25 at the door, lasted five hours and gave attendees the chance to taste 10 different chocolates, according to Coburn.
Hawaiian officials defended the festival. Hawaii is the only state that produces commercial cacao, and it is finding its niche market, said Janelle Saneishi, a public information officer with the state's Department of Agriculture.
"There are many companies now using Hawaii-grown cacao in their products, not only for chocolate bars and confections, but in baked goods, soaps and beverages," she said. "It is a growing industry in Hawaii and helps to diversify our agricultural base."
* A $75,000 grant promoted Michigan Christmas trees, a $40 million a year industry, Coburn said.
"It is unclear why the state needs help promoting a very successful industry," he wrote.
The "Make It a Real Michigan Christmas" promotion offered three messages: Real trees and poinsettias are great for the environment, they enhance seasonal moods and they're great for the economy, said Marsha Gray, executive director of Michigan Christmas Tree Association.
"I understand everyone is looking for something to point a finger at," Gray said, "but this follows the very terms this (block grants) project was designed for."
* The Washington State Fruit Commission received a grant of $100,000 for a "Celebrity Chef Fruit Promotion Road Show in Indonesia." Indonesia was selected as a potential market for cherries, apples and pears.
However, the country produces twice the amount of fruit it consumes, Coburn said.
"Here's the reality: We ship 2.5 million boxes of apples there already, and this year 3,500 boxes of cherries," B.J. Thurlby, president of the fruit commission, said. "We believe we can increase that up to 20,000 to 30,000 boxes."
Coburn and others in Congress have the responsibility of making sure money is spent correctly, Thurlby said. "But when we export one box of cherries, that trickles back $11 to U.S. taxpayers."
Becky Bernhardt, Coburn's deputy press secretary, said the listing of projects and grants is intended to ask whether the funding is a priority during a time of fiscal crisis.
"Additionally, these grant programs are not a core mission of the USDA," she said.
The grants are designed to enhance the competitiveness of the industry, said Rep. Kurt Schrader, D-Ore., a member of the House Agriculture Committee.
Specialty crops make up nearly half of the farm gate value nationwide, but funding for them accounts for a small fraction of spending in the farm bill, he said.
They have been effective, he said, because state agriculture departments have "strict guidelines for eligible projects, and I believe they do an excellent job at distributing funds in an effective and judicious manner.
"Often grantees have skin in the game and provide matching funds, creating an important private-public partnership," he said.
Schrader said accountability is built into the process. Recipients are required to provide progress reports twice a year and a final performance report to be posted on the specialty crop block grant program website.
State officials have the responsibility to select the projects, and the USDA's authority is limited to ensuring the projects selected enhance the competitiveness of specialty crops, Agricultural Marketing Service spokeswoman Gwen Sparks said.
Each state receives a base grant that is the higher of $100,000, or a third of 1 percent of the total amount of funding made available for that fiscal year, Sparks said.
In addition, AMS allocates the remainder of the grant funds based on the value of specialty crop production in each state in relation to national production.
Schrader said he was heartened when the leadership of the House and Senate ag committees recommended a $1 billion increase in program funding to the super committee last year.
"I will continue to push for a similar level of funding when the House Agriculture Committee takes up the farm bill later this year."
Specialty Crop Block Grant Program-Farm Bill grants are designed to help strengthen the market for specialty crops like fruits, vegetables, tree nuts, dried fruits, horticulture and nursery crops, including floriculture.
Applications for FY2012 will be accepted through July 11.