On September 16, the U.S. Department of Agriculture (USDA) published a final rule to modernize grant programs within the Rural Business-Cooperative Service including the Rural Cooperative Development Grant (RCDG) program. The updated regulations reflect longstanding advocacy priorities for NCBA CLUSA and feedback provided by the cooperative community during stakeholder engagement meetings when rule changes were proposed in 2021. USDA is accepting comments on the final regulations through October 16, 2024
Read NCBA CLUSA’s Comment Letter on the Final Rule
The final rule includes the following changes as detailed in NCBA CLUSA’s Farm Bill recommendations to Modernize the Rural Cooperative Development Grant Program: multi-year grants, equitable interpretation of the 25 percent match requirement, updated definition for cooperative development, commitment to underserved and economically distressed communities, consistency in funding timelines, and recognition of the patchwork state statutes for cooperatives.
Additionally, the rule codifies the application period for RCDG from March 1 – June 1 annually, which will finally allow cooperative development centers to have consistent timelines within the program. Here are the highlights of the proposed rule:
Updated and New Definitions
- Updates the purpose of the RCDG program to include Cooperative Development within the definition of Technical Assistance
- Updates definition of “Cooperative Development” to include the ongoing Technical Assistance needed to support cooperatives and covered activities
- Adds the term “Mutually Owned Business” to ensure that cooperatives in states that lack a cooperative statute and are incorporated as other business forms can benefit from RCDG
- Adds the term “Networking” to more effectively encourage collaboration among program grantees
Click here to view the full list of new and updated definitions for the RCDG Program
Matching Requirements
- Caps matching funds at 25 percent of the project cost and 5 percent for 1994 Institutions
- Awards full points in the evaluation criteria for applicants who meet the 25 percent matching requirement regardless of the source (cash, in-kind, or a mix of both)
- Removes approach of “scoring on a curve” for individuals who exceed match requirements
Eligible Uses of RCDG Funds
- Regional coordination of services and information sharing among Cooperative Development Centers
- Costs associated with establishing or operating a Center, including legal services, accounting services, professional development for staff, attending conferences that would advance Cooperative Development and its practice, and more
- Technical Assistance including Cooperative Development
- Providing grants and loans as subawards to support cooperative development
Click here to view the ineligible uses of RCDG funds
Application Requirements
- Discuss how centers will seek the advice, participation, expertise and assistance of representatives of business, industry, educational institutions, the Federal Government, Tribal Governments and State and local governments
- Discuss how the Center intends to develop continuing sources of financial support for the Center and share plans of how the Applicant intends to secure long term sustainability of the Center
- Provide target metrics for categories such as number of cooperatives assisted, number of mutually owned businesses operated as cooperatives assisted (LLC/LLP)
- For consumer co-ops (grocery and retail), number of people with access to goods or services
Click here to view the full list of application requirements
Evaluation Criteria for Proposals
- Commitment within the work plan and budget to serving Underserved and Economically Distressed Communities as defined in the annual notification
- Networking and plan to develop multi-organizational and multi-state Cooperative Development approaches
- The Agency may provide a multi-year funding opportunity to previous recipients. If the Agency provides a multi-year funding opportunity, the application requirements and award process will be included in the annual notification