USDA awards $40 million grants to boost local farm/food projects

CHICAGO (Reuters) - The U.S. Agriculture Department on Friday awarded $40.2 million in grants to farmers, ranchers and farmer-controlled rural business ventures aimed at spurring locally produced food supplies and renewable energy ventures.

USDA Deputy Secretary Kathleen Merrigan said 298 recipients in 44 states and Puerto Rico will receive business development assistance through the Value-Added Producer Grant program.

"These projects will provide financial returns and help create jobs for agricultural producers, businesses and families across the country," Merrigan said in a statement.

"This funding will promote small business expansion and entrepreneurship opportunities by providing local businesses with access capital, technical assistance and new markets for products and services."

Recipients included Living Water Farms, a 3-year old family company located in Strawn, Illinois, two hours south of Chicago, which produces hydroponic greens for restaurants and grocers; Agriberry, a family-owned berry and fresh fruit operation near Mechanicsville, Virginia; and Green Mountain Organic Creamery of North Ferrisburgh, Vt., which markets certified organic, bottled pasteurized milk, butter, ice cream and other dairy products.

Funds may be used for feasibility studies or business plans, working capital for marketing value-added farm products and for farm-based renewable energy projects, USDA said.

Eligible applicants included independent producers, farmer and rancher cooperatives, agricultural producer groups, and majority-controlled producer-based business ventures.

USDA said its Rural Development programs include a portfolio of more than $155 billion in loans and loan guarantees to improve the economic stability of rural communities, businesses, residents, farmers and ranchers.

Merrigan announced the grants at a conference on "local/regional food systems" at the Federal Reserve Bank of Chicago.

(Editing By Peter Bohan)