FUND FOR RURAL AMERICA GRANT BOOSTS IOWA VALUE-ADDED COOPERATIVES

                                     Release No. 0339. 97                                           

                                                               
                                                               
                                    Tom Amontree (202) 720-4623
                                          tom.amontree@usda.gov
                                      Jim Brownlee (202) 720-2091
                                          jim.brownlee@usda.gov




FUND FOR RURAL AMERICA GRANT BOOSTS IOWA VALUE-ADDED COOPERATIVES

     CENTERVILLE, IOWA, October 3, 1997--Agriculture Secretary Dan Glickman
today announced that USDA will provide a $44,700 grant to the Chariton
Valley Resource Conservation and Development Council in Iowa to study the
feasibility of a value-added cooperative structure for switchgrass products.
      
     The grant award is part of $1.1 million being provided by the Clinton
Administration's Fund for Rural America to help 18 cooperatives in 16 states
develop plans to produce value-added products from the agricultural
commodities their members produce.
     
     USDA, with other agencies and organizations, is working to develop
locally sustainable sources of biomass fuel and to show the environmental
and rural economic benefits of biomass power.  The project involves growing
switchgrass as an energy crop, to be co-fired with coal to generate
electricity. An estimated 30,000 to 40,000 acres in southern Iowa are
expected to be established by the year 2000 to produce switchgrass and
generate an income up to $200 an acre.  

     "For many of our nation's farmers, future success will hinge on their
ability to move up the food ladder from being producers of raw commodities
to processors of finished or further-refined products," Glickman said. "In
this way, more of the money derived from farm goods winds up in the
producers' pockets and is spent in rural communities."
     
     Actual recipients of the Cooperative Value-Added Program (CVAP) funds
are service providers -- such as state departments of agriculture or
universities -- which are working directly with cooperatives. The USDA funds
will primarily be used to finance feasibility studies, business development
plans, market analysis studies and product development plans for new
cooperatives seeking to produce value-added goods. 

     Recipients of the value-added development project funds had to
contribute matching funds worth at least 25 percent of the USDA funding they
will receive.

     The Fund for Rural America, established under Section 793 of the
Federal Agriculture Improvement and Reform Act of 1996, provides $100
million annually for three years for research, education, and extension or
rural development.  

                                 
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