USDA awards $40 million grants to boost local food supplies

CHICAGO Fri Feb 3, 2012 5:26pm EST

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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.

Denise Kilgus, one of the founders of Living Water Farms, said in an interview that the grant will be a good boost.

"The grant is going to help us get out more so we can market our product, talk to the chefs and build out our business," she said. "It's a start up business and everyone pitches in."

She said they already serve gourmet restaurants in the Chicago area including Frontera Grill and retail markets like Whole Foods.

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.

"We gave them a grant so they could try and figure out what was the best path for them to take to be successful," said USDA Rural Development Illinois Director Colleen Callahan.

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

URBAN FARMERS FORGE AHEAD

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

Aside from the farmers awarded USDA grants in the more traditional rural settings, the meeting also featured numerous innovative urban farmers in search of investors and customers.

Many of the urban farmers were seeking the same kind of grants for their operations as those awarded to rural farmers.

Growing Home, a not-for-profit business that uses urban farming of vegetables as community development and job training for ex-convicts and the unemployed, uses greenhouses and retilled, composted vacant city lots to produce organic food.

"We will have 40 people go through transitional jobs programs where they get paid," said Harry Rhodes, executive diretor of Growing Home Chicago, which operates in the economically depressed southside neighborhood of Englewood.

Rhodes said obtaining start-up money for greenhouses, equipment and other essentials has been one of the biggest challenges over the last ten years. But it now supplies farmer markets in the city as well as high-end local restaurants like Charlie Trotter's.

"Everything is certified organic. We are the only urban farm that is in Chicago that is certified organic," Rhodes said.

Another successful Chicago start-up is Farmed Here, an "aeroponic" and "vertical" farm in an Englewood building where basil and arugula are grown in water under controlled conditions and supply 20 local food stores and restaurants.

"We are on a commercial scale," said Jolanta Hardej of Farmed Here, adding that the group plans to open a 90,000 square foot facility in the Chicago suburb of Bedford Park.

Warren Ribley, state director for the Illinois Department of Commerce and Economic Development, said that the state has invested about $4.8 million over the past four years to expand urban gardening and "help build these new local food systems."

More than 600 youths in Chicago neighborhoods have been employed through the urban garden program, he said.

(Editing By Peter Bohan)

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