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Rural Cooperative Development Grants

Program Descriptions

Program Number



Rural Cooperative Development Grants


Federal Agency




Food, Agriculture, Conservation, and Trade Act of 1990, Section 2347, Public Law 101-624; Consolidated Farm and Rural Development Act, Section 310B(e), 7 U.S.C. 1932; Federal Agriculture Improvement and Reform Act of 1996, Public Law 104-127; 5 U.S.C. 301; 7 U.S.C. 1989; 7 U.S.C. 1991; 16 U.S.C. 1005; 62 FR 42387 Aug/7/1997; Farm Security and Rural Development Act of 2002, Public Law 107-171.






To improve economic conditions in rural areas through cooperative development. The primary objective of the cooperative center concept is to provide technical assistance services, including feasibility analysis. The grant program will be used to facilitate the creation or retention of jobs in rural areas through the development of new rural cooperatives, value-added processing, and rural businesses.


Types of Assistance

Project Grants.


Uses and Use Restrictions

Grant funds may be used for, but not limited to, the following activities to develop new cooperatives and improve existing cooperatives: applied research, feasibility, environmental, and other studies; collection, interpretation, and dissemination of principles, facts, technical knowledge, or other useful information; training and instruction; loans and grants; and technical assistance or advisory services to individuals, small businesses, cooperatives, or other similar entities in rural areas. Up to $1.5 million may be used for applications that focus on assistance to small, minority producers through their cooperative businesses.


Eligibility Requirements

Applicant Eligibility

Eligible applicants are nonprofit corporations and institutions of higher education. Grants may not be made to public bodies. A rural area for this program is defined as all territories of a State not within the outer boundary of any city having a population of 50,000 or more according to the latest decennial census of the United States.

Beneficiary Eligibility

Rural residents.


Evidence of legal capacity, economic feasibility, and financial responsibility relative to the activity for which assistance is requested.


Application and Award Process

Preapplication Coordination

An environmental assessment is generally not required for the Rural Cooperative Development Grant program. However, this program is eligible for coverage under E.O. 12372, "Intergovernmental Review of Federal Programs." An applicant should consult the office or official designated as the single point of contact in his or her State for more information on the process the State requires to be followed in applying for assistance, if the State has selected the program for review.

Application Procedure

The standard Federal application forms as furnished by the Federal Agency and required by Office of Management and Budget Circular Nos. A-110 and A-102 must be used for this program. An original and a copy of all Federal forms and application materials are to be filed with the appropriate Rural Development National Office. Electronic data submissions are encouraged. The National Office reviews the submittals to determine eligibility, then reviews, scores, and ranks all eligible applications.

Award Procedure

See annual solicitation to determine the maximum amount of Federal funds to be awarded. Final processing and monitoring will be designated to the appropriate State Rural Development Office. Payments will be made by electronic funds transfer. In the event that the applicant is awarded a grant less than the amount requested, the applicant will be required to modify its application.


Published in the Federal Register.

Range of Approval/Disapproval Time

Sixty-to-120 days from the end of the application period as indicated in the annual solicitation in the Federal Register.


If an application is rejected, the reasons for rejection are fully stated. An applicant may request that the Agency's decision be reviewed by the USDA National Appeals Division.



Assistance Considerations

Formula and Matching Requirements

The total allocation is controlled by Congress. Applicants will be required to contribute at least 25 percent of the total project cost in cash or in-kind contributions that must be from nonfederal funds except that a loan from another federal source can be used. Applicants that are designated as 1994 Institutions'' as defined in section 532 of the Equity in Educational Land-Grant Status Act of 1994 (7 U.S.C. 301 note; Pub. L. 103-382) are required to provide nonfederal financial support (matching funds) of at least 5 percent of the total project cost.

Length and Time Phasing of Assistance

The grant program is conducted on an annual basis. Awards are made for a 12- month period. A Request for Advance or Reimbursement may be submitted monthly, but quarterly reimbursements are typical. The grantee's share of the costs will be disbursed in advance of grant funds or on a pro-rata distribution basis with grant funds during the disbursement period. Some reimbursements may be linked to submission of acceptable performance reports.


Post Assistance Requirements


Semiannual Financial Status Report, semiannual performance report, and a final project performance report.


In accordance with the provisions of OMB Circular No. A-133 (Revised, June 27, 2003), "Audits of States, Local Governments, and Nonprofit Organizations," nonfederal entities that expend financial assistance of $500,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. Nonfederal entities that expend less than $500,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in Circular No. A-133.


The grantee shall maintain adequate records and accounts to assure that grant funds are used for authorized purposes.


Financial Information

Account Identification



FY 07 $3,586,838; FY 08 est $4,900,000; and FY 09 est not reported. Up to $1.473 million may be used for applications that focus on assistance to small, minority producers through their cooperative businesses.

Range and Average of Financial Assistance

In FY 2007, $3.5 million was awarded to 19 recipients, averaging $188,000 with a range from $85,000 to $200,000.


Program Accomplishments

The Rural Cooperative Development Grant program has established a number of rural cooperative development centers across the Nation. Efforts from these centers have improved the economic condition of rural areas through the development of new cooperatives and improved operations of existing cooperatives. USDA continues to encourage and stimulate the development of effective cooperative organizations in rural America as a part of its total package of rural development efforts.


Regulations, Guidelines and Literature

7 CFR 4284, Subparts A and F; 7 CFR 3015; 7 CFR 3019. Final rules published in the Federal Register on April 29, 2004, revised 7 CFR 4284 Subpart F. The amendments implemented for Subpart F within 7 CFR Part 4284, conform to the regulations for the Rural Cooperative Development Grant program contained within the newly implemented subpart A that consolidates provisions common to all grant programs administered by Cooperative Services within Rural Business Cooperative Service (RBS).


Information Contacts

Regional or Local Office

Contact the appropriate Rural Development State Office listed in Appendix IV of the Catalog or through the RBS Web site.

Headquarters Office

Assistant Deputy Administrator, Cooperative Services, Rural Business- Cooperative Service, Department of Agriculture, Washington, DC 20250. Telephone: (202) 720-8460. Use the same number for FTS.

Web Site Address


Related Programs



Examples of Funded Projects

Cooperative development centers use grant funds to provide technical assistance, applied research, technical training, and cooperative education to emerging or active rural cooperatives. Examples of recent cooperative activities include: director training, technical assistance in value-added processing and marketing, and developmental outreach.


Criteria for Selecting Proposals

Preference will be given to those applicants that demonstrate; a proven track record in cooperative development; in providing technical assistance in rural areas; ability to facilitate the establishment of cooperatives and new cooperative approaches; and Transferability of approach to rural areas outside of project area. Projects will be selected that contribute the most to the improvement of economic conditions of the rural area.


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