2003 Rural Development Grant Awards Announced - 
2004 Funding Still at Risk

On December 11, 2003 , the United States Department of Agriculture (USDA) announced the approval of $28.7 million in fiscal year 2003 Value-Added Producer Grants (VAPG) to 184 projects in 40 states.  The program was created to spur development of new uses for agricultural products, and the 2002 Farm Bill amended the program to include renewable energy.  

"The good news is that the program elicited a huge response of 781 applications totaling $150 million," said Carol Werner, Executive Director of the Environmental and Energy Study Institute (EESI), "the bad news is that the fiscal year 2004 funding is still very much at risk, and we are very concerned that the Administration may once again seek to defund this innovative, results-oriented program in its fiscal year 2005 budget."

2003 Value-Added Producer Grant Awards
The Value-Added Producer Grants program (Sec. 6401), which is part of the Rural Development title of the 2002 Farm Bill, was allocated $40 million per year in mandatory funding.  In this award cycle, 29 applications focusing on bio-mass and renewable energy were selected to receive $4.3 million in grant funds.

USDA received nearly 800 applications for fiscal year 2003, and funded 184 of them for a total of $28.7 million.  Earlier this year, USDA spent $10 million from the $40 million originally allocated to the program to fund 10 regional Agriculture Innovation Centers.

According to EESI analysis, grant monies were awarded to 12 ethanol-related projects, 9 biodiesel projects, four wind projects, and a handful of other technologies.  Click here to see a project-by-project breakdown of bioenergy projects.

2004 Value-Added Producer Grant Funding
On December 8, the House passed its FY04 omnibus appropriations bill, eliminating the $40 million in mandatory funding provided in the 2002 Farm Bill, and instead providing just $15 million in discretionary funding for fiscal year 2004.  The Senate will take up the omnibus bill in January.  This past February, the administration's budget called for elimination of mandatory funding for the program, providing a mere $2 million in discretionary funding.  

In June, the Sustainable Agriculture Coalition and the Environmental and Energy Study Institute sent a letter signed by twenty-nine agricultural, environmental organizations, and other public interest groups to the House Appropriations Committee requesting that funding be restored to the Value-Added Grants Program.  In September another broad-based coalition letter from 64 organizations was sent to House and Senate Appropriators and Congressional Leadership, also requesting restoration of mandatory funding to the VAPG program.

Click here to see EESI's project-by-project breakdown of bioenergy projects.

Visit http://www.usda.gov/news/releases/2003/12/0417.htm to see USDA’s press release.

 Click here for a PDF version of this Press Release

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