USDA announces loans, grants for agricultural producers to implement renewable energy, energy efficiency measures in their operations

NEW ORLEANS , December 14, 2011 (press release) – Agriculture Secretary Tom Vilsack today announced loans and grants for agricultural producers and rural small businesses across the country to implement renewable energy and energy efficiency measures in their operations. The funding is provided through USDA Rural Development's Rural Energy for America Program (REAP). Under Secretary for Rural Development Dallas Tonsager made the announcement on behalf of Secretary Vilsack while attending an energy efficiency conference here today.

"Stable energy costs create an environment for job growth in rural America," Vilsack said. "The Obama Administration is helping agricultural producers and business owners reduce their energy costs and consumption – and by doing so is helping preserve our natural resources, protect the environment and strengthen the bottom line for businesses, ranchers and farm operations."

Collectively, these REAP-funded projects announced today, and those announced earlier by USDA are expected to lower energy usage by 2 billion kilowatts and prevent nearly 2 million metric tons of emissions from being released into the environment. Today's announcement concludes the REAP awards cycle for 2011. REAP, authorized through the 2008 Farm Bill, provides loans and grants for farmers, ranchers and rural small business owners to purchase and install renewable energy systems and make energy-efficiency improvements. These federal dollars are leveraged with other funding sources for the projects.

Tonsager said that in Fiscal Year 2011, USDA Rural Development provided through the REAP program a total of $23.2 million for energy efficiency projects, $20.9 million for biodigesters, $20.3 million for solar energy projects, $8.2 million for hydroelectric systems, $7 million for biomass energy projects, $4.28 million for flexible fuel pump projects, $3.9 million for wind energy projects, $1.4 million for geothermal installations.

Improving Energy Efficiency

One recipient announced today, Wilford J. Hayden in Lowell, Ind., is expected to save almost 1.4 million kilowatt hours when he replaces a grain dryer with a more efficient one. K and K Farms, Inc., in Stuart, Iowa, has been selected to receive a $10,737 grant to help purchase a new grain drying system that is expected to reduce annual energy costs by more than 57 percent.

Under Secretary Tonsager noted that the nearby Port of New Orleans moves more than half of the nation's grain exports, and that the more fuel efficient grain dryers that USDA is helping to fund contributes to that success. "The Port of New Orleans is considered America's gateway to the global market. It helped American farm exports reach a record high of $137.4 billion for fiscal year 2011 -- supporting 1.15 million jobs, and creating a record trade surplus of $42.9 billion," said Tonsager. "As Secretary Vilsack stated last month, strong export performance means higher incomes for farmers and ranchers, more opportunities for small business owners and jobs for folks who package, ship and market agricultural products."

With today's announcement, USDA Rural Development is funding more than 280 projects to help reduce energy costs. In all, the department funded more than 1,100 energy efficiency projects in fiscal year 2011, including improvements in aquaculture, poultry lighting and ventilation, irrigation system upgrades, maple syrup production efficiency, small business heating and cooling, rural grocery cooler replacement and others.

Flexible Fuel Pumps

USDA is providing support for 12 flexible fuel pump projects in eight states as part of today's announcement, bringing the number of flex-fuel projects funded to 65 in FY 2011, with 266 new pumps being installed in 30 states. Installing flexible fuel pumps encourages the use of biofuels and supports our nation's growing clean-energy economy. Flexible fuel pumps are specifically designed to dispense ethanol-gasoline blends that contain up to 85 percent ethanol and 15 percent gasoline. In addition, they may also dispense mid-level blends, such as E15 and E30.

For example, Mid-Iowa Cooperative in Beaman, Iowa, has been selected for a $94,211 grant to purchase and install six flexible fuel pumps. The following is a list of additional flexible fuel projects announced today that USDA is funding:


Freedom Rock Renewable Fuels, LLC #1 – $49,925 grant to install two flexible fuel pumps
Freedom Rock Renewable Fuels, LLC #2 – $49,578 grant to install a flexible fuel pump
Heller Implement, Inc. – $36,001 grant to install three flexible fuel pumps and a new underground biofuel storage tank
Marcus Junction, LLC – $7,500 grant to install a blender fuel pump
Mid-Iowa Cooperative – $94,211 grant to buy and install six flexible fuel pumps


CC of Hays, Inc. – $35,925 grant to install a flexible fuel pump, underground biofuel storage tank and fuel lines


Zeeland Fuel Services, LLC – $500,000 grant to install seven flexible fuel dispensers, several underground biofuel storage tanks and associated infrastructure at a new fuel station that will sell ethanol and biodiesel fuel


Farmers Cooperative Oil Company – $68,205 grant to install eight flexible fuel blender pumps at two locations


NCP Fuel Services, LLC – $418,250 grant to construct a new fueling station with seven flexible fuel stations that will offer ethanol and biodiesel blends

North Dakota

Farmers Union Oil Company of Velva – $159,739 grant to purchase and install 13 flexible fuel dispensers

South Dakota

Stone Oil Company, Inc. – $33,307 grant to install flexible fuel pumps


CP Fuels, LLC – $500,000 grant to construct and install five flexible fuel pumps

USDA Rural Development also is funding several other types of renewable energy and energy efficiency projects through the REAP program. For example, Kyle Van Dyke has been selected to receive a grant to help replace a conventional heating system for his Edgerton, Minn.-based business with a geothermal system that is expected to reduce annual energy costs by nearly $3,900. Ken's Greenhouses, Inc., Kalamazoo, Mich., has been selected to receive a grant to install energy efficient greenhouse curtains. With its grant award, Wildflower Farms, Inc. in Clearwater, Neb., expects to save 406.8 million BTUs annually by converting a diesel irrigation motor to an electric motor.

Funding of each REAP award is contingent upon the recipient meeting the conditions of the grant or loan agreement. Grants can finance up to 25 percent of a project's cost, not to exceed $500,000 for renewable energy, $250,000 for energy efficiency. A complete REAP recipients announced today, excluding the flex-fuel projects listed above, is available by clicking here.

Since taking office, President Obama's Administration has taken historic steps to improve the lives of rural Americans, put people back to work and build thriving economies in rural communities. From proposing the American Jobs Act to establishing the first-ever White House Rural Council – chaired by Agriculture Secretary Tom Vilsack – the President wants the federal government to be the best possible partner for rural businesses, entrepreneurs and people who want to live, work and raise their families in rural communities.

USDA, through its Rural Development mission area, administers and manages housing, business and community infrastructure and facility programs through a national network of state and local offices. Rural Development has an existing portfolio of more than $155 billion in loans and loan guarantees. These programs are designed to improve the economic stability of rural communities, businesses, residents, farmers and ranchers and improve the quality of life in rural America.

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