Soured grapes: Grower wants his debt repaid

COLUMBUS – Ashtabula County wine grape grower Gene Sigel has discovered what it feels like to be left hanging by the seat of his pants from the horns of a dilemma.

Sigel thinks the Grape Industries Program of the Ohio Department of Agriculture owes him almost $50,000 for grape vines he has planted.

When Sigel planted 13 acres of wine grape vines last May on land he had been preparing for two years, he thought he was enrolled in the Ohio Grape Industries Committee vine grant program, which guaranteed him the cost of the vines for up to five acres.

Now he is being given the idea that the only way he might be able to recover his reimbursement is to sue the state, something he says he doesn’t want to do.

No legal contract. Shannon McQuade, legal counsel for the department of agriculture, says the committee has no signed contract with Sigel, even if everybody involved recognizes the ethical legitimacy of his claim.

McQuade stated in a legal opinion to the committee that the vine program itself was never legal.

The matter was tabled for study at the committee’s November meeting, and is on the agenda for the Feb. 20 meeting.

“This has been a string of unfortunate situations which has been out of everyone’s control,” said board member Lee Klingshirn, a grape producer and winery owner from Avon Lake.

“If we had a clear legal way to pay Mr. Sigel, we would. Nobody on the committee has been happy with the situation. We have been doing what we could to make things right, but for us to expend our funds illegally would not sit well with the legislature.”

The Grape Industries Program was established by the Ohio legislature as a state-funded market-order type promotion funded from Ohio liquor taxes.

Its purpose is to increase markets and to promote the sale of grapes and grape products. As part of that program, it contracted with the Ohio Wine Producers Association to increase the demand for Ohio wines produced from Ohio grapes.

More vineyards.

The Grape Industries Committee also wanted to encourage the development of more wine grape vineyards to supply Ohio grapes to a growing number of wineries.

The vine grants program was instituted to encourage growers to plant new vines on up to five acres a year on land that had not been wine vineyards.

“There has been a considerable shortage of wine grapes produced in Ohio,” the program application package stated. “Most Ohio wineries are forced to purchase grapes of several different wine varieties from other states to meet production needs.”

Sigel, who is the vineyard manager at Chateau Dubonne in Lake County, saw the grants program as a perfect vehicle to help him establish a vineyard of his own.

What they asked. He thought he did everything according to directions.

He had his land inspected by an OSU viticulturist who was the program facilitator. He detailed his equipment, his plans, his experience and viticulture training, and entered into a five-year contract with Chateau Dubonne for the production from the vineyard.

Sigel said if he hadn’t believed that he would be getting a $50,000 reimbursement from the vines program, he probably wouldn’t have attempted to plant the entire vineyard in one year. To plant 13 acres of grafted, tiled vines has cost him in excess of $125,000, he said.

After he completed the application, Sigel never got a written commitment, but was assured by Ida Froehle, then director of the Grape Industries Program, that he was considered to be enrolled, and that all he had to do was to complete the vineyard inspection to certify everything had been done correctly, that trellis had been installed, and that the vines were still growing.

Never been legal.

It was not until October 2000, when he asked about payment, that Sigel learned it had determined the grants program had never been legal. Further payments to vineyard owners had been suspended.

When Sigel appeared before the committee in November to plead his case – that he had been promised the reimbursement, had carried through on his commitments to the Grape Industries Program, and thought that he should be paid – he said he felt most of the committee had agreed with him. He believed at least some of the committee members felt an obligation to reimburse him for the money he had already spent.

But the committee received a legal opinion from ODA legal counsel McQuade that the committee did not have the authority to make grants to producers.

Research and promotion. The statute creating the Grape Industries Committee authorizes it to contract for research on marketing, storage, refrigeration, processing, and the production and product development of grapes and grape products; to disseminate information to the grape and wine trade on proper methods of handling, and to contract for market surveys or other services designed promote the sale of grapes and grape products.

Sigel said he got the distinct impression at his meeting that McQuade was telling him the best way for him to recover his money would be to get a lawyer and sue.

“It’s up to the committee to decide what it wants to do,” McQuade said. But she added that if the committee should decide to expend the money when it votes in February, members of the committee could be found personally liable and the program could be audited.

Advice is not to pay.

“My advice to the committee is not to pay. We don’t have any signed agreement, and I don’t see where we have the authority to make the payment. We haven’t found any way that we can pay it.”

The new executive secretary, Michelle Widner, who replaced Froehle last September, said the vine grants program was something everyone saw as an answer to a definite need in the grape industry, but that she doesn’t think it can ever by reconstituted under the legal authority granted by the legislature.

For the committee to encourage vineyard development, she said, it will develop its connections with other government programs that might provide assistance and low-interest loans.

No regrets.

Sigel said he doesn’t regret planting his entire vineyard, even though he has had to go further in debt than he had planned.

He doesn’t have a guaranteed contract for the production from the entire vineyard, he said, but he doesn’t doubt that he will be able to sell his grapes to Ohio vineyards.

Since he devised the drainage tiling method he used in his vineyard, and has now published three articles on his findings, he feels he could be paid for research anyway.

“But this is not the way for the department of agriculture to treat small farmers,” he said. “They knew about this for some time, and no one ever told me. Now they want me to pay a lawyer to recover a debt they promised to pay me.”

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