Value-Added Producer Grant Value-Added Producer Grant Program TrainingProgram Training

Notice of Funding AvailabilityNotice of Funding Availability

Published in the Federal Register on Published in the Federal Register on December 21, 2005December 21, 2005

Funding level is $19.475 millionFunding level is $19.475 million

Application deadline is March 31, 2006Application deadline is March 31, 2006

Application ProcessingApplication Processing

EligibilityEligibility

CompletenessCompleteness

ScoringScoring

EligibilityEligibility

Applicant eligibilityApplicant eligibility

Product eligibilityProduct eligibility

Activity eligibilityActivity eligibility

Other eligibility requirementsOther eligibility requirements

Applicant EligibilityApplicant Eligibility

Independent ProducerIndependent Producer

CooperativeCooperative

Agricultural Producer GroupAgricultural Producer Group

Majority-Controlled Producer-Based Majority-Controlled Producer-Based Business VentureBusiness Venture

What is Value-Added?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?What is Value Added?

What is Value Added?What is Value Added?

What is Value Added?What is Value Added?

What is Value Added?What is Value Added?

What is Value Added?What is Value Added?

Product EligibilityProduct Eligibility

Change in physical state (e.g. wheat into Change in physical state (e.g. wheat into flour, fresh tomatoes into diced)flour, fresh tomatoes into diced)

Differentiated production or marketing Differentiated production or marketing (e.g. organic) - must reference a business (e.g. organic) - must reference a business plan (working capital only)plan (working capital only)

Product segregation (e.g. non-GMO corn)Product segregation (e.g. non-GMO corn)

Farm-based renewable energy (bio-diesel, Farm-based renewable energy (bio-diesel, ethanol, methane)ethanol, methane)

Activity EligibilityActivity Eligibility

Planning Activities (e.g. feasibility study, Planning Activities (e.g. feasibility study, business plan, marketing plan)business plan, marketing plan)– Maximum Grant - $100,000Maximum Grant - $100,000

Working Capital (e.g. labor, inventory, Working Capital (e.g. labor, inventory, advertising)advertising)– Maximum Grant - $300,000Maximum Grant - $300,000

Planning GrantPlanning Grant

May be used to:May be used to:

– Develop a business planDevelop a business plan

– Develop a feasibility studyDevelop a feasibility study

– Establish a marketing planEstablish a marketing plan

Working CapitalWorking Capital

May be used to:May be used to:– Establish a working capital account to fund Establish a working capital account to fund

operationsoperations– Hire counsel to provide legal adviceHire counsel to provide legal advice– Hire a CPA to design an accounting systemHire a CPA to design an accounting system– Pay salaries, utilities and other operating Pay salaries, utilities and other operating

costs (i.e. inventory, office equipment, costs (i.e. inventory, office equipment, supplies, computers)supplies, computers)

Grant LimitationsGrant Limitations

Funds cannot be used for:Funds cannot be used for:Buy or build a facilityBuy or build a facilityBuy or lease machinery or equipmentBuy or lease machinery or equipmentPay for architectural drawings for a facilityPay for architectural drawings for a facilityDo repairs to a facilityDo repairs to a facilityPay any expenses incurred prior to receiving a Pay any expenses incurred prior to receiving a grantgrantPreparation of the grant packagePreparation of the grant packageLobbyingLobbying

Section 9006 Section 9006 Renewable Energy Renewable Energy and Energy Efficiency Programand Energy Efficiency Program

GrantsGrants for Farmers, Ranchers, and for Farmers, Ranchers, and

Rural Small BusinessesRural Small Businesses

PurposePurpose

Purchase Purchase renewable energy renewable energy systemssystems

(A process that (A process that produces energy)produces energy)

Improvements to a Improvements to a facility or process facility or process that that reducereduce energy energy consumptionconsumption

What is Renewable Energy?What is Renewable Energy?

What is Renewable Energy?What is Renewable Energy?

What is Renewable Energy?What is Renewable Energy?

What is Renewable Energy?What is Renewable Energy?

What Farmers and Ranchers What Farmers and Ranchers Are Eligible?Are Eligible?

Demonstrated Demonstrated financial need (for financial need (for grants)grants)

Must directly engage Must directly engage in production of in production of agricultural products.agricultural products.

At least 50% of gross At least 50% of gross income must be from income must be from their agriculture their agriculture businessbusiness. .

What Small Businesses are What Small Businesses are Eligible?Eligible?

Headquarters in a rural area.Headquarters in a rural area.

Proposed project in a rural area.Proposed project in a rural area.

Demonstrated financial need (grants only)Demonstrated financial need (grants only)

Meets the definition of a small business Meets the definition of a small business according to SBA (according to SBA (http://sba.gov/size/index.htmlhttp://sba.gov/size/index.html

use the “NAICS search” option)use the “NAICS search” option)

A private entity including a sole proprietorship, A private entity including a sole proprietorship, partnership, corporation, a cooperative, and an partnership, corporation, a cooperative, and an electric utilityelectric utilityNon-profit organizations and public entities are not eligible.Non-profit organizations and public entities are not eligible.

What projects are eligible?What projects are eligible?

The project must be for the purchase of a The project must be for the purchase of a renewable energy system or energy renewable energy system or energy efficiency improvement.efficiency improvement.Pre-commercial or commercially available Pre-commercial or commercially available and replicable technology.and replicable technology.Technically feasibleTechnically feasibleLocated in a rural areaLocated in a rural areaApplicant must be owner of the systemApplicant must be owner of the systemAdequate revenues for O&MAdequate revenues for O&M

What are Eligible Costs?What are Eligible Costs?

Post application Post application purchase & purchase & installation ofinstallation of equipmentequipment, , except except agricultural tillage equipment agricultural tillage equipment and vehicles.and vehicles.

Post application Post application construction or projectconstruction or project improvementsimprovements, , except except residential.residential.

Energy audits or Energy audits or assessmentsassessments

Permit feesPermit feesProfessional serviceProfessional service feesfees, , except for application except for application preparation.preparation.

Feasibility studiesFeasibility studiesBusiness plansBusiness plansRetrofittingRetrofittingConstruction of a new Construction of a new facility – facility – same purpose, same purpose, same size, provides more same size, provides more energy savings than improving energy savings than improving an existing facilityan existing facility

When are FY 2006 When are FY 2006 GrantGrant applications due? applications due?

NOFA announced February 13, 2006.NOFA announced February 13, 2006.

Applications due (postmarked) by Applications due (postmarked) by Friday, Friday, May 12May 12, 2006, 2006

90 days to prepare your application 90 days to prepare your application documents, including a score sheet, documents, including a score sheet, and technical reportand technical report

$11.3 million available.$11.3 million available.

State Office 770-267-1413 ext. 113 State Office 770-267-1413 ext. 113 www.rurdev.usda.gov/ga/energy.htmwww.rurdev.usda.gov/ga/energy.htm

$11.3 million $11.3 million available in FY available in FY 20062006

Nation-wide Nation-wide competition for competition for fundsfunds

Plan your project Plan your project nownow

What are your next steps?What are your next steps?

The Technical ReportThe Technical Report Plan your projectPlan your project Consult expertsConsult experts Start making decisionsStart making decisions

If energy efficiency project, get an If energy efficiency project, get an energy auditenergy audit done done

Environmental information to the RD Environmental information to the RD Area Office ASAPArea Office ASAP

Ask for assistance in putting your grant Ask for assistance in putting your grant application together.application together.

Questions?Questions?