March 28, 2005
Senator Tom Harkin Common Sense on: USDA Grants for Value-Added Businesses
In the 2002 farm bill, we worked very hard to include initiatives designed to add value to the crops and livestock grown on Iowa’s fields and farms. One of them is a grant program designed to boost value-added business ventures, which mainly involve the processing of crops or animals, and include ethanol and biodiesel production facilities. The program is officially known as the Value Added Producer Grant (VAPG). We included $40 million a year for this initiative in the 2002 farm bill, but Congress has cut that back to just over $14 million as requested in the president’s budget. These funds are available to farmer-owned businesses across the nation on a very competitive basis.
Q. Who can apply and when?
A. Eligible applicants are independent producers, farmer or rancher cooperatives, agricultural producer groups and majority-controlled producer groups. Applications are being accepted now. The deadline for this year’s applications is May 6, 2005.
Q. What can the funds be used for?
A. Funds from this program can be used for business planning purposes or working capital. Business planning includes activities such as feasibility studies, marketing plans and business plans. Working capital refers to money spent on starting or operating the business or paying business expenses.
Q. What are some other requirements?
A. The value-added grant requires matching funds, meaning that value-added businesses must match any funding provided by a grant. While there is no minimum grant amount, working capital grants are capped at $150,000 and planning grants at $100,000. The majority of grants are smaller than these levels. The farm bill also specifically made farm-based renewable energy businesses eligible. This year there is an emphasis on bio-energy projects such as ethanol, biodiesel and energy produced from manure.
Q. How can I learn more about this program?
A. Contact the USDA Rural Development State Office at 515-284-4714 and use the USDA website: www.rurdev.usda.gov/rbs. You may also call my Des Moines office at 515-284-4574 and my staff will assist you. I encourage all interested Iowans to get in touch with their USDA Rural Development office to find out if they qualify for grant funds.
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