Rule2024-26201
Modernizing Grant Program Regulation
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
November 14, 2024
Effective
November 15, 2024
Issuing agencies
Agriculture DepartmentRural Business-Cooperative Service
Abstract
The Rural Business-Cooperative Service (RBCS or the Agency), an agency of the Rural Development (RD) mission area within the U.S. Department of Agriculture (USDA), published a final rule with comment in the Federal Register on September 16, 2024, to implement the provisions of the Agriculture Improvement Act of 2018 related to the Value-Added Producer Grant (VAPG) Program and the Agriculture Innovation Center (AIC) Program and to modernize the Rural Cooperative Development Grant Program (RCDG). These changes will also help simplify and streamline RD program delivery. Through this action, RBCS is confirming the final rule as it was published and providing responses to the public comments that were received.
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[Federal Register Volume 89, Number 220 (Thursday, November 14, 2024)]
[Rules and Regulations]
[Pages 89917-89922]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-26201]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 89, No. 220 / Thursday, November 14, 2024 /
Rules and Regulations
[[Page 89917]]
DEPARTMENT OF AGRICULTURE
Rural Business-Cooperative Service
7 CFR Part 4284
[Docket No. RBS-24-BUSINESS-0004]
RIN 0570-AB03
Modernizing Grant Program Regulation
AGENCY: Rural Business-Cooperative Service, USDA.
ACTION: Final rule; confirmation and response to comments.
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SUMMARY: The Rural Business-Cooperative Service (RBCS or the Agency),
an agency of the Rural Development (RD) mission area within the U.S.
Department of Agriculture (USDA), published a final rule with comment
in the Federal Register on September 16, 2024, to implement the
provisions of the Agriculture Improvement Act of 2018 related to the
Value-Added Producer Grant (VAPG) Program and the Agriculture
Innovation Center (AIC) Program and to modernize the Rural Cooperative
Development Grant Program (RCDG). These changes will also help simplify
and streamline RD program delivery. Through this action, RBCS is
confirming the final rule as it was published and providing responses
to the public comments that were received.
DATES: The final rule published September 16, 2024, at 89 FR 75762, and
is confirmed and effective November 15, 2024.
FOR FURTHER INFORMATION CONTACT: Melinda Martin, Program Management
Division, U.S. Department of Agriculture, 1400 Independence Avenue SW,
Washington, DC 20250-3201; telephone (202) 720-1400; email:
<a href="/cdn-cgi/l/email-protection#0f626a6366616b6e216c21626e7d7b66614f7a7c6b6e21686079"><span class="__cf_email__" data-cfemail="f69b939a9f989297d895d89b9784829f98b683859297d8919980">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: RD is a mission area within USDA comprised
of RBCS, the Rural Utilities Service and the Rural Housing Service.
RD's mission is to increase economic opportunity and improve the
quality of life for all rural Americans. RD meets its mission by
providing loans, grants, loan guarantees, and technical assistance
through a multitude of programs aimed at creating and improving
businesses, housing and infrastructure throughout rural America.
The final rule that published September 16, 2024 (89 FR 75762),
included a 30-day comment period that ended October 16, 2024. The
changes implemented the mandatory provisions outlined in sections 7608
and 10102 of the Agriculture Improvement Act of 2018 (Pub. L. 115-334)
and updated and reorganized subparts F, J and K. In addition, language
in subpart J was updated to incorporate a new application intake system
that was developed and will streamline the application process for
VAPG. With the changes, each subpart is a standalone set of definitions
and requirements for each individual grant program.
The Agency received detailed comments from 19 respondents
consisting of nonprofit cooperative development centers, individuals,
and current and past awardees of RBCS grant programs. The majority of
the respondents felt the changes were positive and would provide
clarity for the applicants, but several did identify areas where
additional changes may be needed. The Agency reviewed the comments,
categorized them as general or by section of the final rule, and
provided an Agency response below. The Agency has decided to proceed
with implementation of the final rule without further amendments.
General--Program Accessibility
Comments: Three respondents stated that accessibility for Federal
programs should be improved for small businesses and nonprofits. One
identified the audit requirement, stating that requiring an audit
limits these organizations from applying because they cannot afford an
audit. Another identified a lack of inclusivity for small and micro-
sized agricultural businesses and nonprofit organizations led by Afro-
American, Native, and transplanted American communities in the Northern
Mariana Islands. A third identified matching funds requirements as a
concern.
Agency Response: The Agency agrees. The Agency is aware that
accessing Federal programs is difficult for smaller organizations and
strives to limit program requirements to those that are required by
applicable laws and regulations. Neither the RCDG program nor the VAPG
program have audit requirements beyond the ones required by 2 CFR part
200. The AIC program does have an audit requirement for all applicants.
However, it must be noted that small businesses are not eligible
applicants for the program. It is imperative that applicants who are
considered for funding have the financial capability to administer up
to a $1.5 million project. Thus, reviewing the audit for certain
financial standards is a critical part of the review process to ensure
that the Agency selects applicants who have the financial resources to
carry out the authorized work for the program. The Agency recognizes
the need to be inclusive of all people and ensure equitable access to
funding opportunities and services. Priority is given to distressed and
disadvantaged communities and also to historically underserved
agricultural producers. With regard to matching funds, all three
programs have statutory requirements that are implemented through this
regulation.
General--Local Agriculture Market Program (LAMP) Report to Congress
Comment: One respondent noted that while VAPG awards reach all
states, very few awards reached the following states: Wyoming, Utah,
Arizona, Nevada, North Dakota, Louisiana, Arkansas, Alabama, and
Mississippi. To strengthen program implementation, the commenter
suggested that the annual LAMP Report to Congress include additional
factors such as the number of applications being received from these
underrepresented states, what type of projects are being funded in
those states, the agricultural products created, and the proportion of
awards by priority categories within individual states.
Agency Response: The Agency will collaborate with the Agriculture
Marketing Service to assess the information that will appear in future
LAMP reports to Congress.
Sec. 4284.501 Purpose
Comment: One respondent states that Sec. 4284.501 mentions that
grants are made to non-profit institutions, then Sec. 4284.503 defines
institutions as a college. The respondent continues by stating it is
vital that private, non-profit charitable organizations be explicitly
[[Page 89918]]
eligible for the grants and would like for the Agency to clarify the
eligibility of 501(c)(3) charitable non-profits.
Agency Response: In Sec. 4284.503 Definitions, the final rule
defines a Nonprofit Institution as ``any organization or institution,
including an accredited Institution of Higher Education, no part of the
net earnings of which inures, or may lawfully inure, to the benefit of
any private shareholder or individual.'' A 501(c)(3) charitable non-
profit would be included in this definition. In addition, RCDG
applicants must have a mission that is in line with the purpose of the
program and provide targeted support for the startup, expansion, and
operational improvement of Cooperatively and Mutually Owned Businesses
in Rural Areas.
Sec. 4284.503 Definitions
Comment: One respondent recommended that the Agency include the
International Cooperative Alliance (ICA)'s Statement on Cooperative
Identity in its processes and written materials.
Agency Response: The Agency acknowledges that many cooperatives in
the United States look to the Alliance's Statement of Cooperative
Identity for guidance; however, the Agency will be using a definition
of Cooperative based on legal concepts recognized in the United States.
Comment: One respondent stated that the definition for Cooperative
Development fails to include many of the essential business development
activities, such as business plans, feasibility analysis, and financial
analysis that are critical in cooperative development. The respondent
recommends adding these activities to the definition of Cooperative
Development.
Agency Response: Cooperative Development is a subset of the defined
term Technical Assistance which incorporates the activities of
assessment and analysis through Feasibility Studies and Business Plans,
customized training, written information, in person or virtual
exchanges, web-based curricula, and webinars.
Comment: One respondent requested that the Agency amend the
definition of Mutually Owned Business to include the following: ``This
section allows for cooperatively governed businesses that may not
distribute patronage.'' The respondent believes this will explicitly
recognize childcare and housing cooperatives (that provide a service at
cost and use cost savings instead of patronage), as well as purchasing
cooperatives that may include not-for-profit members such as school
districts.
Agency Response: The Agency understands that some cooperatives like
childcare and housing cooperatives operate at cost and may not
distribute patronage, but that members benefit in proportion to their
use of the cooperative business. Mutually Owned Businesses and
Cooperatives that operate at cost are Cooperatives as defined in the
regulation. Therefore, no change will be made to the definition of
Mutually Owned Business.
Comment: Two respondents stated that including a separate
definition for Mutually Owned Business was unnecessary and creates
confusion. One goes on to state that ``Mutually Owned Business'' means
a business not incorporated under a Cooperative statute but operating
as a Cooperative. Cooperative operation of the business is reflected in
the articles and bylaws.'' The respondent believes this substantially
undercuts the clarity of the Rule's definition of Cooperative by
creating a seemingly different model and referring to corporate entity
enabling laws. The respondent states that Congress did not intend to
create two different categories of enterprise for RCDG purposes and
thinks that cooperatively and mutually owned businesses are a single
concept, not two different categories.
Agency Response: The definition of Mutually Owned Business adopts
the definition of Cooperative by reference. The Agency provided a
separate definition for Mutually Owned Business to clarify that a
Mutually Owned Business that operates on a Cooperative basis meets the
definition of a Cooperative for the purposes of the authorizing
statute. Consequently. there is no adverse impact to Mutually Owned
Businesses with respect to eligibility or merit-based evaluation for
the RCDG program.
Comment: Six respondents noted that the final rule does not define
``Underserved and Economically Distressed'' but will be defined in the
annual notification for the RCDG program. The concern is that this will
lead to annual inconsistencies with how these areas are determined,
create confusion among applicants, and inefficiencies in planning work.
The respondents recommend defining the term in the final rule. Two
respondents also noted that cooperative developers frequently work with
economically distressed populations in regions that may not carry that
label and would like for there to be flexibility for applicants to
describe and justify ways in which they serve economically distressed
populations.
Agency Response: Defining ``Underserved and Economically
Distressed'' in the annual notification instead of the final rule will
allow the Agency to give attention to the priorities of the
administration, while also receiving consistent data and maintaining
equity among applicants in the program competition.
Sec. 4284.522 Project Eligibility
Comment: Two respondents state that the Agency is placing more
value on new cooperatives being developed relative to helping existing
cooperatives to thrive. One noted that projects are required to focus
on the development of new rural cooperatives and is concerned that
assistance to existing cooperatives was left out. The respondent
reasons that assistance to existing cooperatives for improvement or
expansion can often lead to creation of new jobs and improved economic
activity and would like for the Agency to consider adding the phrase
``or existing cooperatives'' to the develop new cooperatives
requirement.
Agency Response: The Agency disagrees. Section 4284.522(a)(2)
requires applicants to focus on establishing or operating a Center with
the goals of creating jobs in Rural Areas through the development of
new Rural Cooperatives, Value-Added processing, and Rural businesses.
The Agency agrees that establishing a Center involves the development
of a new cooperative, however, operating a Center includes providing
assistance to existing cooperatives. Providing assistance to existing
cooperatives is already an eligible project focus so adding the
requested phrase to the final rule is unnecessary.
Sec. 4284.531 Application Requirements
Comment: Seven respondents addressed the performance metrics
included in the final rule. All were in favor of the Agency continuing
to use the previously required metrics or allowing applicants to create
their own metrics that are specific to the needs and service demands of
their respective state and region. One respondent suggested ``removing
(L) Financial loss avoided as a result of a `no-go' decision in the
Cooperative Development Process.'' They questioned the basis of this
calculation and stated that it would not be something that would be
planned at the time of application and may occur at various stages of
the process.
Agency Response: While the Agency has outlined a set of performance
[[Page 89919]]
metrics to capture the intent of the program and to track the benefits
and effects on rural communities, we want to emphasize that applicants
may provide a ``null'' response to any of these metrics without
penalty. The intent is that applicants respond to metrics that match
the goals identified in the applicant's work plan and budget.
Additionally, we encourage applicants to suggest additional metrics
that they believe would enhance their proposals, as we are not scoring
the required metrics in a way that would adversely affect their
applications. The annual notification for the program will include this
guidance.
Comment: One respondent disagrees with the Agency's decision to
require centers to describe their experience within the last three
years. They noted that applicants are encouraged to highlight how they
have helped develop sustainable businesses and provide economic
development statistics, but it often takes cooperatives and small
businesses more than three years to reach desired levels of performance
and profitability. The respondent thinks the Agency should change the
requirement back to experience within the last five years, as was
required previously.
Agency Response: The Agency recognizes that it often takes
Cooperatives and Mutually Owned Businesses more than three years to
reach desired levels of performance and profitability. A Center with
three years of experience likely has clients in various stages of
Cooperative Development. The three-year period allows the Cooperative
Development Center to highlight its more recent experience.
Comment: Four respondents noted that the final rule does not
address scoring criteria for letters of support. Three of the
respondents want the Agency to continue considering letters of support
in the scoring process for RCDG. However, one respondent believes
requiring applicants to obtain ten letters is excessive and takes time
away from developing the application itself. If support letters remain
a scoring criterion, they requested that the required number of support
letters be reduced to five to ease the burden on applicants.
Agency Response: The Agency understands the importance of
demonstrating local collaboration. However, after careful
consideration, the Agency decided to remove this requirement. The
Agency's goal is to encourage applicants to provide a more
comprehensive narrative, within the workplan and budget, that truly
reflects their impact and partnerships, rather than relying on letters
that may not offer substantive insights. The Agency believes this
approach will lead to a clearer understanding of each Project's
community engagement and potential benefits.
Comment: One respondent believes that the Agency should continue
requiring applicants to include their incorporation documentation in
their RCDG application.
Agency Response: In streamlining the regulation, the Agency
determined it best for applicants to provide the incorporation
information within the context of the application. The Agency is now
requesting more specific information from the applicant about the
Technical Assistance provided to the Cooperative and Mutually Owned
Business that leads to incorporation in Sec. 4284.531(b)(5)(v)(A).
Comment: One respondent questioned the need for a complete address
in the Experience section of the application. They stated that when a
cooperative developer is working with a new cooperative, there may or
may not be a complete address available until the entity is
incorporated and noted that previously they only needed to name the
business or effort and a community.
Agency Response: The Agency understands that there may not be a
complete address available until an entity is incorporated. The annual
notification for the program will include additional guidance on what
location information should be submitted in your application for a new
cooperative if a complete address is not available.
Comment: One respondent stated that the final rule did not identify
years of experience required in the Experience section and noted that
five years of experience was previously required.
Agency Response: The Agency disagrees. Section 4284.531(b)(5)(v)(A)
identifies that experience described in the application must be within
the last three (3) years.
Comment: Two respondents are concerned that making New Cooperative
Approach an application requirement could be confusing and
counterproductive. One noted that while it is good to encourage
innovation, competent and successful work should be properly valued.
Even though new approaches may not occur every year, a Center may be
doing very good work that should continue. The second stated that
although encouraging innovation is important, requiring Centers to
develop New Cooperative Approaches annually will be challenging and
time consuming. The respondent believes it also distracts from the
technical assistance delivery focus by requiring Centers to spend time
conducting research and seeking projects that can fit into a new
cooperative approach category instead of providing technical assistance
to existing or newly forming cooperatives in need of services. The
respondent goes on to state that existing proven approaches already
meet the needs of most Center clients. They suggest providing more
flexibility in this area, allowing Centers to focus on adapting and
refining their existing approaches as needed.
Agency Response: The application requirement of New Cooperative
Approach as a scoring criterion is required in the authorizing statute
for the program.
Sec. 4284.533 Submission Requirements
Comment: Three respondents voiced their support of the application
submission period included in the final rule. Two of the respondents
also requested that the Agency consider staggering the deadlines for
the RCDG and Socially Disadvantaged Groups Grant (SDGG) programs by two
weeks to decrease the burden on centers applying for both programs.
Agency Response: The Agency agrees and will work to ensure that
sufficient time is allotted between the RCDG and SDGG programs'
application windows.
Sec. 4284.540 Application Processing
Comment: One respondent asked if the Agency plans to retain the use
of qualitative evaluation criteria. They noted this as a specific
evaluation criterion called out by the program in the past and found it
to be an important component of RCDG application process.
Agency Response: The Agency is no longer scoring on the applicant's
use of qualitative evaluation. Instead, the Agency will be performing a
qualitative evaluation on the performance of the program using the
newly required post-award outcome reports.
Sec. 4284.554 Multi-Year Award
Comment: Five respondents voiced their support of the RCDG program
offering a multi-year funding opportunity to previous recipients.
However, three of the respondents encouraged the Agency to only award
multi-year grants if additional appropriations are received so that
there is not a decrease in the number of award recipients. If multi-
year grants are implemented without a commensurate increase in
appropriations, the three respondents suggested that they be awarded
contingent upon future
[[Page 89920]]
appropriations. They believe this would maintain the improved
efficiency and consistency of multi-year grants without jeopardizing
the national impact of the program.
Agency Response: The Agency agrees. The multi-year funding option
will be contingent upon an increase in future appropriations.
Sec. 4284.560 Reporting Requirements
Comment: Two respondents questioned the requirement to submit two
annual outcome performance reports. One asked if the two reports
referred to one financial report and one narrative report. The other
asked if the two reports were requesting different metrics or longer-
term outcomes.
Agency Response: The intent of the requirement pertains to
submitting an annual outcome performance report for two years following
the submission of the final report. The report's purpose is to assess
the performance metrics outlined in your application and evaluate
whether the primary goals and objectives of the approved work plan and
budget were achieved. The final rule will be effective as written but
the Agency will look to clarify this requirement in the annual notice
and when future updates are made to the regulation.
Sec. 4284.916 Reserved Funds
Comment: One respondent recommends that any reserved funds not
obligated by September 30 of each Fiscal Year for Beginning Farmers or
Ranchers, Socially-Disadvantaged Farmers or Ranchers, and food safety
related projects to remain in those categories.
Agency Response: The Agency disagrees. The VAPG statute allows for
any funds in the Beginning Farmers or Ranchers, Socially-Disadvantaged
Farmers or Ranchers, and Food Safety categories that are not obligated
by September 30 of the Fiscal Year for which the funds were made
available, to be available to the Agency to carry out any function of
the program. Therefore, unobligated funds in those categories will be
available in the general fund competition the subsequent program cycle.
Sec. 4284.925 Allowable Uses of Grant and Matching Funds
Comment: One respondent stated that the final rule does not provide
sufficient information on the types of allowable food safety related
expenses and recommends making the following items allowable under the
food safety project category:
<bullet> Easy-to-Clean Food Contact Surfaces to help prevent biological
and physical contamination
<bullet> Portable Hand washing Stations to strengthen hygiene
practices; plumbed dedicated handwashing sinks
<bullet> Small-scale box/produce washer (AZS brush washer) to
effectively clean produce
<bullet> Salad spinner to ensure leafy greens are effectively washed,
dried, and cooled in a way that prevents contamination
<bullet> Coolbot systems, or any type of refrigeration equipment or
forced air cooler to ensure proper cooling of produce
<bullet> Cooler thermometer and monitoring to ensure proper cooling of
produce
<bullet> Electrolux spin dryer to effectively clean produce
<bullet> On-site septic systems or alternative waste treatment systems
to prevent contamination of product
<bullet> Equipment Calibration Services to ensure equipment is
maintained and correctly calibrated to meet Current Good Manufacturing
Practice guidelines
<bullet> Any other equipment that is required to access new markets
through a federal, state or local food safety law or a third-party
audit
<bullet> Water treatment systems and monitoring equipment for post-
harvest/processing
<bullet> Labeling equipment (for lot codes/traceability)
<bullet> Traceability software--FSMA 204 compliance/food safety
<bullet> ATP meters for cleaning and sanitation validation
<bullet> Food safety recordkeeping software
<bullet> Cleaning and sanitizing equipment
<bullet> Refrigerated transportation (mobile coolers, refrigerated
trucks/vans)
The respondent goes on to state that expenses related to food
safety certification, such as GAP certification or pre-harvest food
safety certification, should be considered allowable as long as they
are a part of a larger project scope that is integral to their
marketing of a value-added product. They believe the following
certifications should be allowable:
<bullet> Training fees (e.g., PCQI training)
<bullet> Process validation costs for products--not really
certification but not equipment
<bullet> Post-harvest HGAP audit fees
<bullet> Food safety consultant fees--assist with HACCP plans, post-
harvest food safety plans, GMP implementation.
Agency Response: Food safety related expenses associated with the
post-harvest processing and/or marketing of a value-added product are
eligible for the program. However, expenses that are unallowable as
defined in Sec. 4284.926 of the program regulation will not be
allowed. Examples of eligible food safety related expenses will be
included in the application material for the program as well as on a
fact sheet published on the USDA VAPG website.
Sec. 4284.931 Application Requirements
Comment: One respondent believes that requiring both a feasibility
study and business plan for VAPG applications is excessive for most
producers. The commenter stated that requiring only a business plan
would be sufficient for most applicants. Their second suggestion
includes allowing applicants to submit either a feasibility study or a
business plan, providing flexibility for producers to choose the
appropriate option for their project.
Agency Response: The Agency disagrees. Applicants requesting
Emerging Market grants for products they have marketed for two years or
less face unknown challenges and obstacles moving a Project forward. A
Business Plan will assist with establishing a set of business goals for
the Project along with reasons why they are obtainable. The Business
Plan will also address the Pro Forma financial goals of the Project. A
Feasibility Study is a comprehensive analysis of the economic, market,
technical, financial, and management capabilities of a Project or
business in terms of the Project's expectation for success. This would
include looking at the Business Plan to ensure there is a reasonable
expectation of success. Because of this, the Agency believes both a
Feasibility Study and Business Plan are necessary.
Comment: One respondent stated that the final rule clarifies that
applicant in-kind contributions can fulfill 100 percent of matching
fund requirements but is concerned that the requirement that matching
funds be spent in advance of grant funding may act as a project
barrier, since some in-kind match of the producer will come later in
the cycle of the project. They reason that applicants should be able to
request reimbursement for approved project costs before the spend-down
of their match contribution as to not impede the implementation of the
project. The commenter recommends creating an advance payment option,
modeled off options offered in the Natural Resources Conservation
Service's Environmental Quality Incentives Program. This would allow
beginning farmers or ranchers, socially disadvantaged farmers and
ranchers, and veteran farmers to be
[[Page 89921]]
eligible to receive a portion of the award up front.
Agency Response: Program regulations require that funds be matched
at a rate equal to or in advance of grant funds. The VAPG program has
historically been a reimbursement-based program. The Agency believes
that advanced payments would not be appropriate for the program and
could lead to matching requirements not being met. This could result in
a recipient being required to repay advanced funds to the Agency.
Please note that applicant in-kind contributions of applicant or family
members' time being spent on the project is restricted to 50 percent of
the Matching Funds amount. Applicant third-party contributions of the
Agricultural Commodity inventory to be used in the Project can be used
to satisfy up to 49 percent of the Matching Funds requirement.
Sec. 4284.933 Submission Requirements
Comment: One respondent voiced their support of the application
submission period included in the final rule and noted a set
application period will result in higher quality applications. Another
voiced concern about the submission period for the program. The
respondent stated that the submission period is problematic because
producers are being asked to establish a budget for items and services
that will not be purchased before October 1, a full 7\1/2\ months after
submission of the application, and the likelihood of service providers
holding to pricing for that long is unlikely. Also, producers will just
be coming off the busiest months of the year (June to October) and
typically schedule time off over the holidays so they will have to
scramble to complete the application by February 15. The respondent
recommends an application submission period of January 15 to April 15,
or something close to those dates. They believe this will put the
application period in the slowest months of the year for most
agricultural producers and allow them to put together a budget with
price quotes closer to the time that funds would be spent.
Agency Response: When determining the timing of the application
period for VAPG, the Agency considered multiple factors including the
impact of the timing on the applicant pool, input from stakeholders,
and the resources of the Agency. The Agency believes that the selected
application submission period balances these factors by setting the
deadline for the applications during what is typically a less busy time
for Agricultural Producers while also allowing approximately 3.5 months
for application completion.
Comment: One respondent is concerned that making the application
online-only may discourage some rural applicants from applying. The
respondent noted that rural areas throughout the United States struggle
with broadband access and often lack the infrastructure needed to
provide consistent, quality internet coverage. They request that paper
applications still be available and considered equally against
electronic applications.
Agency Response: The program regulation does not address the format
of applications; instead, the application submission process, including
where to submit an application and the format of the application will
be described in the annual notification for the program. The Agency is
currently investing significant resources into developing an accessible
application process and commits to considering applicant and Agency
resources when setting up the submission process each year.
Sec. 4284.940 Application Processing
Comment: Two respondents recommend that no preferential treatment
be given to applicants that provide documentation of cash match, versus
in-kind matching contributions.
Agency Response: The Agency believes that it has provided
additional flexibility with the allowance of in-kind matching funds
contributions from applicants to recognize the value of applicant-
provided labor and commodities. However, cash contributions are
considered to be a stronger contribution than in-kind because of the
financial investment and frequently contribute to more successful
project outcomes. It is important to note that applications are not
selected for funding based solely on the type of match contributed.
Comment: One respondent stated that food safety applications should
be reviewed by a separate panel that has familiarity with the food
safety landscape. They suggested that prioritization in the selection
of reviewers be oriented towards food safety extension educators and
processing educators, nonprofit technical assistance providers, and
producers who have a variety of production profiles as regards crop
diversity.
Agency Response: Each eligible application will be scored in
accordance with Sec. 4284.940(c) by independent reviewers and USDA RD
staff as described in the annual notification. The annual notification
will include relevant education and experience requirements for
independent reviewers to ensure they are qualified to review VAPG
applications, including those in the food safety category.
Sec. 4284.1003 Definitions
Comment: One respondent expressed concerns about the updated
definition of Agricultural Producer. Their concerns focused on the
percentage of ownership of the agricultural commodity and the
percentage of the agricultural commodity that an agricultural producer
can purchase. They felt that these percentages may be limiting. The
respondent also felt that the definition doesn't necessarily need to be
aligned with the VAPG program.
Agency Response: The Agency disagrees. The Agency believes that the
AIC program and the VAPG program need to use consistent definitions
wherever possible. The AIC program receives a portion of the funds
appropriated for the VAPG program and is one of three programs designed
to support value-added agriculture in a specific way. Allowing
assistance to go to organizations that have minority ownership from
agricultural producers or to agricultural producers who are buying the
majority of the agricultural commodity needed for the value-added
agricultural product dilutes the effect of the program for agricultural
producers, who are the legally-mandated beneficiary.
Comment: One respondent stated that the program should explicitly
reference aquaculture.
Agency Response: The Agency agrees. The Agency believes that the
explicit reference to aquaculture in the definition of Agricultural
Commodity in the final rule is sufficient.
Comment: One respondent stated that including the following terms
in the definition of Producer Services adds clarity: applied research,
product taste-testing, and recipe development.
Agency Response: The Agency agrees. The Agency expects the changes
made, in the final rule, to the definition of Producer Services will
provide clarity to applicants and recipients.
Comment: One respondent stated that the two changes mandated by the
2018 Farm Bill to the requirements for the Center's Board of Directors
(BOD) are beneficial for their Center. The two changes are to allow a
State Legislator to provide representation on the BOD in lieu of a
representative from the State Department of Agriculture and to allow
representation from any four Agricultural Commodity Organizations
instead of only from the four highest-grossing commodities in the
State.
[[Page 89922]]
Agency Response: The Agency agrees. The Agency supports these
changes as allowing additional flexibility for Centers to meet the
requirements for the BOD.
Sec. 4284.1020 Applicant Eligibility
Comment: One respondent stated that additional space should be
created for community colleges to administer AIC awards.
Agency Response: The Agency disagrees. There is no provision in the
authorizing statute to give preference or additional accommodation to
community colleges. These community colleges are eligible to apply as
long as they meet the requirements identified in the regulation.
Sec. 4284.1021 Ultimate Beneficiary Eligibility
Comment: One respondent stated that the program should allow
Centers to provide producer services to all value-added producers and
processors regardless of ownership structure and percentage of
ownership of the agricultural commodity.
Agency Response: The Agency disagrees. First, the authorizing
statute for the program restricts Center assistance to only
agricultural producers. Second, the program supports the same
objectives that the VAPG program does, which are to help agricultural
producers increase their revenue and customer base for the value-added
agricultural products they make from the agricultural commodities that
they grow or raise. Allowing assistance to go to organizations that
have minority ownership from agricultural producers or to agricultural
producers who are buying the majority of the agricultural commodity
needed for the value-added agricultural product dilutes the effect of
the program for agricultural producers, who are the legally-mandated
beneficiary.
Sec. 4284.1022 Project Eligibility
Comment: One respondent stated that the changes to establish a
minimum award amount, a period of performance, and limitations on
contracts with other Centers adds greater clarity for applicants and
that the minimum and maximum award amounts are appropriate for three-
year periods of performance.
Agency Response: The Agency agrees. The Agency supports adding
clarity for applicants and establishing appropriate award amounts.
Sec. 4284.1031 Application Requirements
Comment: One respondent stated that the change to streamline the
requirements for an application from a narrative format to a form
should make applying to the program clearer and less burdensome.
Agency Response: The Agency agrees. Two primary goals of this
rulemaking effort were to clarify requirements and make the application
process less burdensome for applicants.
Sec. 4284.1040 Application Processing
Comment: One respondent stated that reducing duplication in the
merit evaluation criteria is helpful to applicants.
Agency Response: The Agency agrees. The Agency believes that
reducing duplication will streamline the application and merit
evaluation process.
Sec. 4284.1051 Notification of Successful Applicants
Comment: One respondent stated that moving the burden for some
requirements, such as the verification of matching funds and
demonstrating that the Center has a qualified BOD, from the application
phase to the award phase will significantly reduce the burden for all
applicants and especially for successful applicants.
Agency Response: The Agency agrees. The Agency believes that moving
this burden will streamline the application process for all applicants.
However, it notes that the requirements still exist at the time of
application; only the need to verify or demonstrate that the applicant
meets the requirement has shifted from the application to the award
phase.
No change to the rulemaking is necessary at this time. The Agency
appreciates the comments received. The Agency confirms the final rule
without change.
Kathryn E. Dirksen Londrigan,
Administrator, Rural Business-Cooperative Service, USDA Rural
Development.
[FR Doc. 2024-26201 Filed 11-13-24; 8:45 am]
BILLING CODE 3410-XY-P
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