Johanns announces $38 million in loans, grants

Johanns announces $38 million in loans, grants
Agriculture Secretary Mike Johanns has announced the availability of funding of more than $19 million in grants to support the development of renewable energy projects and value-added agricultural business ventures. Also, he announced 33 rural economic development loan and grant recipients will receive $18.8 million to spur economic growth and create or save more than 2,700 jobs in 19 states.

"President Bush's commitment and the concerns about energy costs voiced at Farm Bill Forums across the nation, inspired us to develop a comprehensive energy strategy and I am pleased to demonstrate we are following through on that strategy," Johanns said during remarks at the American Farm Bureau Federation annual meeting in Nashville. "These Rural Development funds are a part of our strategy to bolster renewable energy and will help support small businesses and value-added products."

Since 2001, USDA has invested nearly $290 million in renewable energy as part of the President's commitment to reduce dependence on foreign oil. The Value Added Producer Grant program en-courages the development of renewable energy projects and is part of a comprehensive energy strategy announced by Johanns in early December to help farmers and ranchers mitigate the impact of high energy costs and develop long-term solutions.

Under this year's program, the amount that can be awarded to a producer in the form of a working capital grant has been doubled to $300,000, and $1.5 million is also being allocated to provide grants of $25,000 or less to eligible producers. Again this year, priority consideration will be given to those applicants who have at least 51 percent of project costs dedicated to activities for a bioenergy project. To date, the program has funded $116 million in value-added grants for over 750 recipients nationwide, including $20.5 million to develop and market renewable energy projects in 29 states. Renewable energy projects include biodiesel, ethanol or wind energy production, or the use of biomass to generate energy.

The grants may be used for planning activities, such as feasibility studies, marketing and business plans needed to establish a viable value-added marketing opportunity for an agricultural product, or to provide working capital for operating a value-added business venture, marketing value-added agricultural products and for farm-based renewable energy projects. Eligible applicants are independent producers, farmer and rancher cooperatives, agricultural producer groups, and majority-controlled producer-based business ventures.

Awards will be made on a competitive basis. Applications must be received no later than March 31. Detailed information and program requirements were included in the December 21, 2005, publication of the Federal Register.

The $18.8 million in rural business development loans and grants are made available through the USDA Rural Development Intermediary Relending Program (IRP) and the Rural Economic Development Loan and Grant Program (REDLG). These pro-grams provide loans and grants to intermediaries that re-lend funds to establish new businesses, expand existing businesses, or complete community development projects.

In South Dakota, The West River Foundation will receive $750,000 and the Southeastern Development Foundation will receive $500,000 from USDA Rural Development's IRP loan program to assist businesses and create or save jobs. A complete list of recipients can be seen at

USDA Rural Development's mission is to deliver programs in a way that will support increasing economic opportunity and improve the quality of life of rural residents. As a venture capital entity, Rural Development has invested over $63 billion since the beginning of the Bush Administration to provide equity and technical assistance to finance and foster growth in homeownership, business development, and critical community and technology infra-structure. As a result, over 1.1 million jobs have been created or saved through these investments. Further information on rural programs is available at a local USDA Rural Development office or by visiting USDA's Web site at

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