By DOUG SCHMITZ
Iowa Correspondent

DES MOINES, Iowa — The state’s ethanol industry and the significant growth of niche food production enterprises have offered tremendous opportunities for rural Iowans in agritourism and organic agriculture, according to the USDA Rural Development-Iowa Office.

“Through USDA Rural Development’s Value Added Producer Grant Program, our agency can help producers who are exploring ways to market commodities produced on their farm,” said Mark Reisinger, the office’s state director. “Iowa has seen significant growth in specialty, or niche, food production enterprises.

“As an example, more than 300 Iowa producers are now registered on www.marketmakeriowa.com (which is) an interactive mapping system that provides an important link between producers and consumers.”

Reisinger said grants may be used for planning that establishes a value-added marketing opportunity, or for working capital to operate a value-added business.

“These grants provide producers with the investment funds needed to expand their role in developing and marketing value-added products in domestic and international markets,” he said.

Established by U.S. Sen. Charles Grassley (R-Iowa) in 2001, the Value Added Producer Grant Program was created to assist Iowa business ventures adding value to the commodities they produce on the farm. Since then, 120 businesses in Iowa have been awarded more than $20 million in grant funds through this program.

Iowa businesses have received nearly 15 percent of the national funding available in Value Added Producer grants over that seven years. Grants are available to independent producers, agricultural producer groups, farmer or rancher cooperatives and majority-controlled producer-based business ventures.

Two types of grants are available: planning grants and grants for working capital. Planning grants can be used for feasibility studies, marketing and/or business plans, and grant funds can be used to pay consultants who guide producers through the development processes. The planning activities must be related to the marketing of a value-added product.

Working capital grants can be used by new or existing businesses to pay the operating expenses of new ventures just starting out.
“If a business venture has been operating for more than a year, it does not qualify for a working capital grant,” said Ray Hansen, interim director for the Iowa State University extension Value Added Agriculture Program.

This past year, nearly 400 applications were received nationwide. In 2008 alone, nine value-added agriculture businesses in Iowa received $1.4 million in Value Added Producer Grants. Examples of previous Iowa grant recipients include ethanol plants, biodiesel facilities, large wind farms, wineries and branded meat marketers, as well as pork, specialty soy oil and cheese and milk processors.

Earlier this month, nine value-added agriculture businesses in Iowa received a total of $1.4 million in Value Added Producer Grants.
Some of its recipients include Delaware County Meats, Inc. of Dyersville, to assist with marketing meat products; Batey Ltd. of Mount Pleasant, to assist with marketing wood pellets; and Sirroco, LLC of Pomeroy, to assess the feasibility of generating electricity from wind.

“The Value Added Producer Grant program creates jobs and improves the financial returns for producers and farm families across rural Iowa, and rural America,” Reisinger said. “I hope producers with an interest in starting or expanding their value-added business will give us a call.”

Along with value-added agriculture, he said Iowa producers are turning to agritourism activities to increase their on-farm revenue, with such activities as farm tours for families and schoolchildren, day camps, hands-on chores, self-harvesting of produce, hay or sleigh rides and overnight stays in a bed and breakfast.

In 1998, Loren and Dianna Engelbrecht converted the turn-of-the-century Victorian farmhouse on their 50-acre farmstead near Fredericksburg into Farm House Bed and Breakfast Inn.

“Last year 1,000 overnight guests visited the bed and breakfast and stayed in one of five guest rooms, a couple of which are suites with a private deck and whirlpool,” Reisinger said. “In 2005, they started selling Iowa wines at their gift shop to test what types their guests preferred.”

Bloomsbury Farm, just five miles west of Cedar Rapids in rural Atkins, added agritourism in 2001, long before the moniker became popular.

“We are now open to the public and have been really busy,” said Karen Petersen, who owns and operates the 3,000-acre northeastern Iowa family farm with her husband, Dave, which they both opened for the fall season on Sept. 22.

“Good start to the year,” she added. “We started small and have grown from a half-acre pumpkin patch to a 15-acre, and added the (10-acre) corn maze and many fun activities for the public. We also host many corporate outings.”

The Petersens usually get an average of 18,000 tourists between May-October, including about 3,000 school tours.

“I think people want a fun getaway that is close to home with gas being so high,” Petersen said. “People love to come to our farm and make memories. We also want to give the public a positive view of agriculture.

“But, the downside is the weather. We always depend on nice weather. Also, insurance and liability can be a challenge.”