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Help Available for Value-Added Agriculture Projects

March 24, 2008

Lyons, NE – South Dakota producers who need planning or working capital funds to develop a value-added product or idea have one week to apply for grants through U.S. Department of Agriculture Rural Development. Mike Heavrin with the Center for Rural Affairs says Value Added Producer grants help farmers and ranchers get a bigger portion of the consumer food dollar.

"I believe the latest studies show that for every dollar that consumers spend on food, only 3 to 4 cents of that goes into a farmer's pocket. The rest of it goes into the pockets of middlemen: the marketers, grocery stores, packagers, processors and things like that. So this program is designed to get more money into the hands of the farmer."

There are two types of value-added grants. The first is for planning, with grant amounts of up to $100,000 available. These can be used for feasibility studies, business planning or marketing, Heavrin explains, before applying for working capital.

"This kind of grant would include money for attorney services to get your business organized so it's separate from the farm and you're not putting your farm assets at risk when you're doing these value-added projects. Once you get your feasibility study done and your business plan written, then you're eligible for your working-capital grant. For that program, you can get up to $300,000 in federal funds to help you cash-flow your business during the first year of operation."

Many South Dakota producers already are using the program, according to Heavrin.

"We have some producers who received money in the past to take the yucca plant, which grows wild in parts of South Dakota, and turn it into value-added products. Right now it's considered a weed by a lot of ranchers, but another person would see it as a raw material that could be used to make consumer products."

Both grants require a 50-percent match, either cash or in-kind, which can include labor hours. The grants also can be used for developing sources of renewable energy.

Interested producers can find application information at the University of Nebraska food processing website, and may apply for the grants by calling (402)687-2100. The application deadline is Monday, March 31.

David Law/Don Mathisen, Public News Service - SD