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USDA provides $20.2m to fledgling agri businesses

USDA programme looks to assist development of agricultural projects that might otherwise face difficulty securing funding during early stages.

The United States Department of Agriculture (USDA) has provided $20.2 million in Phase II funding to a group of 34 fledgling agricultural businesses through the Small Business Innovation Research (SBIR) programme.

Scott Dockum
Scott Dockum

The businesses, which are pursuing agricultural research and development projects across a variety of sub-sectors, received between $530,000 and $600,000 each.

The programme is designed to help high-risk research projects that might otherwise find it difficult to secure funding from private equity or venture capital firms, SBIR program co-ordinator Scott Dockum told Agri Investor. 

SBIR is conducted in three phases. An average of about 550 small businesses apply for Phase I of the funding each year, which provides an initial $100,000, but just 15 percent of those are selected, Dockum said.

Of those recipients, about half go on to receive Phase II, which provides up to $600,000 to facilitate commercialisation of the innovation.

The first two phases are meant to ultimately prepare recipients for Phase III, during which USDA does not provide funding but encourages recipients to connect with outside investors, Dockum said.

SBIR is administered by the National Institute of Food and Agriculture and aims to assist projects that enhance American agriculture, the environment, rural healthcare and communities.

Recipients range from companies developing improved soybean feed for use in aquaculture, to an autonomous robot designed to transport strawberries, to educational software serving rural schools.

The programme’s research areas include air, soil and water; animal production and protection; aquaculture; biofuels and biobased products; food science and nutrition; forests and related resources; plant production and protection; rural community development and small- to medium-sized farms.

Past recipients of SBIR funding include Green Heron Tools, which offered a line of garden tools designed for women; Bioprodex, which developed a bioherbicide targeting highly-invasive tropical soda apple weed; and Whole Trees, a company that developed a market for small-diameter round timber that had previously been considered a waste product.

In recent years, Dockum said there has been an increase in applications for projects in plant production and protection engineering, food science and nutrition as well as the rural and community development research areas.