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Statement of Need: The modifications to the Value Added Producer Grant program will streamline program regulations resulting in better quality applications. It is expected that all of the changes will result in time and resource savings to the applicant and the Agency. Publication of the final rule is crucial to program implementation. The program will directly create new businesses, assist with the expansion of existing businesses, create jobs, increase the flow of tax dollars to rural communities, and add lasting value in terms of rural community impact.

Summary of the Legal Basis: The program was authorized by the Agriculture Risk Protection Act of 2000, section 231 (Pub. L. 106-224). The purpose of the Value Added Producer Grant (VAPG) program is to help eligible independent producers of agricultural commodities, agricultural producer groups, farmer and rancher cooperatives, and majority-owned, producer-based business ventures develop business plans for viable marketing opportunities and develop strategies to create marketing opportunities.

Alternatives: An alternative is to continue under the interim rule. The interim rule is scheduled to be published and remain in effect until a final rule is adopted. A notice announcing FY 2010 funding will be published after the interim rule. FY 2010 funding will be expendable in FY 2011.

Anticipated Costs and Benefits: Costs: The anticipated costs associated with this process are contract services. An exact dollar amount cannot be determined at this time, but it will not have an annual effect on the economy of $100 million or more. No change in FTE needs is anticipated. Minimal automation changes are anticipated. Benefits: The intended action is to fine tune the program regulations, making them easier to use for the public and Agency staff, while incorporate changes designed to reduce the cost to the Government and the subsidy rate.

Risks: Program risks include risk of loss in the loans guaranteed under this program. We anticipate mitigating these risks with improved regulatory and administrative guidance and appropriate training.