The Hagstrom Report

Agriculture News As It Happens


USDA awards millions in grants and loans

In the latest of a series of announcements of loans and grants to boost rural economic growth following President Barack Obama’s State of the Union address, the Agriculture Department said today it has awarded $40.2 million in value-added producer grants to 298 recipients in 44 states and Puerto Rico.
Kathleen Merrigan

Kathleen Merrigan

Agriculture Deputy Secretary Kathleen Merrigan made the announcement in Chicago after keynoting the “Local/Regional Food System Conference” hosted at the Federal Reserve Bank of Chicago.

“In his State of the Union address last week, President Obama was clear that we need to do more to create jobs and promote economic growth,” Merrigan said.

“These projects will provide financial returns and help create jobs for agricultural producers, businesses and families across the country,” she said. “This funding will promote small business expansion and entrepreneurship opportunities by providing local businesses with access capital, technical assistance and new markets for products and services.”

Merrigan noted that the recipients included:
  • Living Water Farms, Inc., a 3-year-old family company in Strawn, Ill., that focuses on the production of hydroponic greens for specialty markets in the Midwest
  • Agriberry LLC, a Mechanicsville, Va., consumer-supported summer berry farm that is being expanded into an agricultural training facility for first-time workers
  • Green Mountain Organic Creamery, LLC, a North Ferrisburgh, Vt., company that will receive a working capital grant to market certified organic, bottled pasteurized milk, butter, ice cream and other dairy products.

Grant recipients have to provide an amount equal to the USDA grant, but that contribution can include their own labor, Merrigan said in a call to reporters.

She declined to comment on whether the Obama administration would ask for mandatory funding for the value-added grants in the next farm bill. Noting that “Congress writes the farm bill,” Merrigan added, “I am too poor to put down money on the table on what’s happening in this farm bill season.”

The National Sustainable Agriculture Coalition praised the grant announcement and said it is calling on Congress to renew and expand funding for this program as it drafts the next farm bill.

“Value-Added Producer Grants increase farmers’ income, establish jobs in rural communities, and expand food choices for American consumers,” Helen Dombalis, a policy associate with the coalition, noted in a news release. “This program is exactly what our country needs as we seek ways to stimulate our economy.”

The coalition noted that this year USDA could fund less than half of the 511 project applications received, which totaled more than $63.7 million in requested funding.

NSAC believes the new farm bill should renew mandatory funding for VAPG at $30 million a year, less than the 2002 farm bill mandatory funding level for the program but more than the program receives now. Several bills pending in Congress, including the Local Farms, Food, and Jobs Act as well as the Beginning Farmer and Rancher Opportunity Act, propose this funding level as well as policy improvements to the program, NSAC said. Both bills are aimed at inclusion in the 2012 farm bill, the group added.

Since the State of the Union address on Jan. 24, Agriculture Secretary Tom Vilsack has also announced:
  • Loans and grants to rural electric co-operatives in 10 states to support businesses, improve the quality of medical care, and create or save hundreds of jobs through USDA’s rural economic development loan and grant program.
  • Value-added producer grants totaling $1.33 million to 10 small businesses in North Carolina and $1.5 million to 23 small businesses in Oregon for feasibility studies or business plans, working capital for marketing value-added agricultural products and for farm-based renewable energy projects.
  • A conditional commitment through the Biorefinery Assistance Program of a $232.5 million loan to ZeaChem Boardman Biorefinery, LLC (ZBB) to operate a 25 million gallon per year biorefinery, which will be constructed on an industrial site in Boardman, Ore., along the Columbia River.