U.S. Agriculture Secretary Mike Johanns announced $19.5 million in grants to help producers start value-added activities. Examples include converting to organic production, processing raw commodities and converting 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," Johanns says.

Value-Added Agricultural Product Market Development grants, also known as Value-Added Producer Grants, are available to help agricultural producers develop business plans to produce biobased 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.

The planning grant may be used for activities, such as feasibility studies, marketing plans or 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. The applicant must be a producer; an 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.

The deadline to apply is May 16. An application guide and other materials may be obtained at http://www.rurdev.usda.gov/rbs/coops/vadg.htm or by contacting the applicant's USDA Rural Development state office.