SEC. 6401. VALUE-ADDED AGRICULTURAL PRODUCT MARKET DEVELOPMENT GRANTS.

(a) IN GENERAL.—Section 231 of the Agricultural Risk Protection Act of 2000 (7 U.S.C. 1621 note; Public Law 106–224) is amended—

(1) by redesignating subsections (b) through (d) as subsections (c) through (e), respectively;

(2) by striking subsection (a) and inserting the following:

‘‘(a) DEFINITION OF VALUE-ADDED AGRICULTURAL PRODUCT.—

‘‘(1) IN GENERAL.—The term ‘value-added agricultural product’ means any agricultural commodity or product that—

‘‘(A)(i) has undergone a change in physical state;

‘‘(ii) was produced in a manner that enhances the value of the agricultural commodity or product, as demonstrated through a business plan that shows the enhanced value, as determined by the Secretary; or

‘‘(iii) is physically segregated in a manner that results in the enhancement of the value of the agricultural commodity or product; and

‘‘(B) as a result of the change in physical state or the manner in which the agricultural commodity or product was produced or segregated—

 ‘‘(i) the customer base for the agricultural commodity or product has been expanded; and

‘‘(ii) a greater portion of the revenue derived from the marketing, processing, or physical segregation of the agricultural commodity or product is available to the producer of the commodity or product.

‘‘(2) INCLUSION.—The term ‘value-added agricultural product’ includes farm- or ranch-based renewable energy.

‘‘(b) GRANT PROGRAM.—

‘‘(1) IN GENERAL.—From amounts made available under paragraph (4), the Secretary shall award competitive grants—

‘‘(A) to an eligible independent producer (as determined by the Secretary) of a value-added agricultural product to assist the producer—

‘‘(i) in developing a business plan for viable marketing opportunities for the value-added agricultural product; or

‘‘(ii) in developing strategies that are intended to create marketing opportunities for the producer; and

‘‘(B) to an eligible agricultural producer group, farmer or rancher cooperative, or majority-controlled producerbased business venture (as determined by the Secretary) to assist the entity—

‘‘(i) in developing a business plan for viable marketing opportunities in emerging markets for a valueadded agricultural product; or

‘‘(ii) in developing strategies that are intended to create marketing opportunities in emerging markets for the value-added agricultural product.

‘‘(2) AMOUNT OF GRANT.—

‘‘(A) IN GENERAL.—The total amount provided under this subsection to a grant recipient shall not exceed $500,000.

‘‘(B) MAJORITY-CONTROLLED PRODUCER-BASED  BUSINESS VENTURES.—The amount of grants provided to majority- controlled producer-based business ventures under paragraph (1)(B) for a fiscal year may not exceed 10 percent of the amount of funds that are used  to make grants for the fiscal year under this subsection.

‘‘(3) GRANTEE STRATEGIES.—A grantee under paragraph (1) shall use the grant—

‘‘(A) to develop a business plan or perform a feasibility study to establish a viable marketing opportunity for a value-added agricultural product; or

‘‘(B) to provide capital to establish alliances or business ventures that allow the producer of the value-added agricultural product to better compete in domestic or international markets.

‘‘(4) FUNDING.—Not later than 30 days after the date of enactment of this paragraph, on October 1, 2002, and on each October 1 thereafter through October 1, 2006, of the funds of the Commodity Credit Corporation, the Secretary shall make available to carry out this subsection $40,000,000, to remain available until expended.’’;

(3) in subsection (c)(1) (as redesignated by paragraph (1))—

(A) by striking ‘‘subsection (a)(2)’’ and inserting ‘‘subsection (b)(2)’’;

(B) by striking ‘‘$5,000,000’’ and inserting ‘‘5 percent’’; and

(C) by striking ‘‘subsection (a)’’ and inserting ‘‘subsection (b)’’; and (4) in subsection (d) (as redesignated by paragraph (1)), by striking ‘‘subsections (a) and (b)’’ and inserting ‘‘subsections (b) and (c)’’.

(b) APPLICABILITY.—

(1) IN GENERAL.—Except as provided in paragraph (2), the amendments made by subsection (a) apply beginning on October 1, 2002.

(2) FUNDING.—Funds made available under section 231(b)(4)(A)(i) of the Agricultural Risk Protection Act of 2000 (as amended by subsection (a)(2)) shall be made available not later than 30 days after the date of enactment of this Act.