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Johanns Announces $38 Million In Loans And Grants To Spark Growth Of Value-Added Ag Ventures And Business Development


Renewable Energy Ventures Given Priority

NASHVILLE, January 9, 2006-- Agriculture Secretary Mike Johanns today 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 encourages 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% of project costs dedicated to activities for a bioenergy project. To date, the program has funded $116million 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, 2006. Detailed information and program requirements were included in the December 21st, 2005, publication of the Federal Register.

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

In Hidalgo County, Texas, for example, a USDA Rural Development IRP loan of $750,000 will be used by the Hidalgo Economic Development Corporation to assist 10 businesses and create or save 100 jobs. Benton County, Minnesota, will use its IRP loan of $250,000 to assist 3 businesses and create an anticipated 68 jobs. Also, in Sharkey County, Mississippi, the South Mississippi Electric Power Association will use its 10-year, zero percent interest loan to invest in a peanut storage and drying facility in Anguilla that will create 20 new 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 infrastructure. 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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