Value-Added Producer Grant Program Training

Notice of Funding Availability Published in the Federal Register on December 21, 2005 Funding level is $ million Application deadline is March 31, 2006

Application Processing EligibilityCompletenessScoring

Eligibility Applicant eligibility Product eligibility Activity eligibility Other eligibility requirements

Applicant Eligibility Independent Producer Cooperative Agricultural Producer Group Majority-Controlled Producer-Based Business Venture

What is Value-Added? The incremental value that is realized by the producer from an agricultural commodity or product as the result of: (1) A change in its physical state, (2) Differentiated production or marketing, as demonstrated in a business plan (3) Product segregation (4) The economic benefit realized from the production of farm or ranch-based renewable energy. Incremental value may be realized by the producer as a result of either an increase in value to buyers or the expansion of the overall market for the product.

What is Value Added?

Product Eligibility Change in physical state (e.g. wheat into flour, fresh tomatoes into diced) Differentiated production or marketing (e.g. organic) - must reference a business plan (working capital only) Product segregation (e.g. non-GMO corn) Farm-based renewable energy (bio-diesel, ethanol, methane)

Activity Eligibility Planning Activities (e.g. feasibility study, business plan, marketing plan) –Maximum Grant - $100,000 Working Capital (e.g. labor, inventory, advertising) –Maximum Grant - $300,000

Planning Grant May be used to: –Develop a business plan –Develop a feasibility study –Establish a marketing plan

Working Capital May be used to: –Establish a working capital account to fund operations –Hire counsel to provide legal advice –Hire a CPA to design an accounting system –Pay salaries, utilities and other operating costs (i.e. inventory, office equipment, supplies, computers)

Grant Limitations Funds cannot be used for: Buy or build a facility Buy or lease machinery or equipment Pay for architectural drawings for a facility Do repairs to a facility Pay any expenses incurred prior to receiving a grant Preparation of the grant package Lobbying

Section 9006 Renewable Energy and Energy Efficiency Program Grants for Farmers, Ranchers, and Grants for Farmers, Ranchers, and Rural Small Businesses Rural Small Businesses

Purpose Purchase renewable energy systems (A process that (A process that produces energy) produces energy) Improvements to a facility or process that reduce energy consumption

What is Renewable Energy?

What Farmers and Ranchers Are Eligible? Demonstrated financial need (for grants) Must directly engage in production of agricultural products. At least 50% of gross income must be from their agriculture business.

What Small Businesses are Eligible? Headquarters in a rural area. Proposed project in a rural area. Demonstrated financial need (grants only) Meets the definition of a small business according to SBA ( use the “NAICS search” option) use the “NAICS search” option) A private entity including a sole proprietorship, partnership, corporation, a cooperative, and an electric utility Non-profit organizations and public entities are not eligible.

What projects are eligible? The project must be for the purchase of a renewable energy system or energy efficiency improvement. Pre-commercial or commercially available and replicable technology. Technically feasible Located in a rural area Applicant must be owner of the system Adequate revenues for O&M

What are Eligible Costs? Post application purchase & installation of equipment, except agricultural tillage equipment and vehicles. Post application construction or project improvements, except residential. Energy audits or assessments Permit fees Professional service fees, except for application preparation. Feasibility studies Business plans Retrofitting Construction of a new facility – same purpose, same size, provides more energy savings than improving an existing facility

When are FY 2006 Grant applications due? NOFA announced February 13, Applications due (postmarked) by Friday, May 12, days to prepare your application documents, including a score sheet, and technical report $11.3 million available.

State Office ext $11.3 million available in FY 2006 Nation-wide competition for funds Plan your project now

What are your next steps? The Technical Report  Plan your project  Consult experts  Start making decisions If energy efficiency project, get an energy audit done Environmental information to the RD Area Office ASAP Ask for assistance in putting your grant application together.

Questions?