released 5-25-09

USDA Rural Development offering Value-Added producer grants

The Rural Business-Cooperative Service (RBS) has announced the availability of $18 million in competitive grant funds for fiscal year 2009 to help independent agricultural producers enter into value-added activities. The deadline for paper applications for unreserved funds is June 22, 2009. The deadline for electronic applications for unreserved funds is July 6, 2009.

Awards may be made for planning activities or for working capital expenses, but not for both. The maximum grant amount for a planning grant is $100,000 and the maximum grant amount for a working capital grant is $300,000. The grant will fund one of the following two activities:

• Developing feasibility studies or business plans (including marketing plans or other planning activities) needed to establish a viable value-added marketing opportunity for an agricultural product; or
• Acquiring working capital to operate a value-added business venture or an alliance that will allow the producers to be more competitive in domestic and international markets.

Value-added products are defined as follows:

• Commodity processing by changing the physical state or form of the product (such as milling wheat into flour or making strawberries into jam);
• Increasing value by raising the commodity using a "nonstandard" production method (such as organically produced products; no feasibility study in this category);
• The physical segregation of an agricultural commodity or product in a manner that results in the enhancement of the value of that commodity or product (such as an identity preserved marketing system);
• Increasing value by marketing the commodity within state or within 400 miles of the farm (locally produced products); and
• On-farm renewable energy by transforming natural resources into energy on the farmstead (such as wind, solar, on-farm biodiesel)

For rules governing FY2009 VAPG applications, go online to the Federal Register at http://edocket.access.gpo.gov/2009/pdf/E9-10424.pdf.  To check eligibility, go to the USDA’s website at http://www.rurdev.usda.gov/rbs/coops/vapgea.htm.  To find your local Rural Development office, go to http://www.rurdev.usda.gov/recd_map.html or call 800-670-6553.
For additional resources, visit the Agricultural Marketing Resource Center (AgMRC), a virtual value-added agriculture center operated by Iowa State University and partially funded by the U.S. Department of Agriculture (USDA) at: http://www.agmrc.org/, or phone toll-free 866-277-5567.