USDA Secretary Mike Johanns has announced the availability of $19.5 million to help independent agricultural producers enter into value-added activities. Potential uses include a wide range of products that allow the producer to enhance the revenue stream generated from their crops and other production.

Examples include conversion to organic production, processing of raw commodities to a finished product, and the conversion of farm crops to create renewable energy sources.

"These grants are a vital tool to help support rural businesses, create new markets for agricultural products and help the United States become more energy independent," says Johanns. "They represent the exciting new direction we're proposing for the energy and rural development titles of a new farm bill this year."

Value-Added Agricultural Product Market Development grants, also known as Value-Added Producer Grants, are available to help agriculture producers develop business plans to produce bio-based products from agricultural commodities. Awards may be made for planning activities or for working capital expenses, but not for both. The maximum grant amount for a planning grant is $100,000. The maximum grant amount for a working capital grant is $300,000. Applicants must provide matching funds at least equal to the amount of the grant requested.

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. They also may be used to provide working capital for operating a value-added business venture, marketing value-added agricultural products and for farm-based renewable energy projects. Applicants must be an independent producer, agriculture producer group, farmer or rancher cooperative or majority-controlled producer-based business.

Since 2001, USDA has funded $139 million in value-added grants for more than 940 recipients nationwide, including $25 million to develop and market renewable energy projects in 33 states. Renewable energy projects include biodiesel, ethanol or wind energy production, or the use of biomass to generate energy.

The deadline for applications is May 16. An application guide and other materials may be obtained by  following this link or contacting the applicant's USDA Rural Development State Office.

More information on rural development programs is available at a local USDA Rural Development office or by visiting USDA's web site at .