Brief Description and Legislative Authority

The Federal-State Marketing Improvement Program (FSMIP) provides matching funds to State Departments of Agriculture and other State agencies for 20-30 projects per year. These funds have been used by States to conduct marketing studies or assist in developing innovative approaches to the marketing of agricultural products.

FSMIP is operated under legal authorities of the Agricultural Marketing Act of 1946 (7 U.S.C. 1621 et seq.). The law authorizes the Secretary of Agriculture "to make available...allotments to State departments of agriculture, State bureaus and departments of markets,...and other appropriate State agencies for cooperative projects in marketing service and...research... provided that no...allotments be in excess of the amount which such State agency makes available out of its own funds for such research...for any fiscal year....Such allotments shall be covered by cooperative agreements between the Secretary of Agriculture and the cooperating agency." 7 U.S.C. 1623.

The law is available at www.access.gpo.gov/congress/cong013.html.

Program Scope and Eligibility Requirements

FSMIP funds can be requested for a wide range of marketing research and marketing service activities, including projects aimed at:

Developing and testing new or more efficient methods of processing, packaging, handling, storing, transporting, and distributing food and other agricultural products;

Assessing customer response to new or alternative agricultural products or marketing services and evaluating potential opportunities for U.S. producers, processors, and other agribusinesses, in both domestic and international markets; or Identifying problems and impediments in existing channels of trade between producers and consumers of agricultural products and devising improved marketing practices, facilities, or systems to address such problems. While FSMIP funds can be allotted to "...State departments of agriculture, State bureaus and departments of markets, State agricultural experiment stations, and other appropriate State agencies..." (7 U.S.C. 1623), USDA encourages the State department of agriculture or equivalent agency to assume the lead role for FSMIP activities, using cooperative or contractual linkages with other agencies, organizations, and institutions, including producer or industry organizations, as appropriate. Multi-State projects are encouraged, so long as one State is willing to assume the coordinating role, using appropriate cooperative arrangements with the other States involved.

Federal funds requested for FSMIP projects must be matched, at least equally, from non-Federal sources. Matching requirements may be met in the form of cash or properly valued, in-kind resources. State appropriations, as well as funds or other resources made available for the conduct of the project by farm organizations, trade associations, or other project participants, may be used to satisfy the matching requirement. However, it is essential that the State agency be in control of the project's objectives, set policy, and ensure both the Federal and required matching funds be used for approved purposes. Funds from other Federal agencies or programs cannot be used as the match for FSMIP funds.

FSMIP funds are most commonly allocated to projects of approximately 1-year duration, although proposals will be considered for grants to be disbursed over periods of up to 2 years. Proposals to conduct a successive phase or continuation of a project funded through a previous FSMIP grant also will be accepted and considered in competition with proposals for new projects. However, proposals representing the continuation of FSMIP funding for a particular project or activity for more than 3 years will not be considered.

Fiscal Year 2000 Priorities

Recognizing the diversity of marketing issues and opportunities among the various States, FSMIP will consider all requests which fall within the scope of the program. However, we especially invite proposals in the following areas, which correspond with ongoing national initiatives:

Small Farms--to increase the base of marketing research and marketing services of particular importance to small-scale, limited-resource farmers and rural agribusinesses, with emphasis on projects aimed at identifying and improving producers= abilities to participate in alternative domestic and export markets. Direct Marketing--to identify and evaluate opportunities for producers to respond directly to new or expanding consumer demands for products and value-adding services, with emphasis on projects which concurrently address the needs of presently underserved consumers

Sustainable Agriculture--to encourage the development of marketing channels and methods consistent with maintaining or improving the environment, with emphasis on projects aimed at expanding consumers' choices with regard to the environmental impact of alternative production and marketing technologies.

Responsibilities of the FSMIP Staff

The FSMIP Staff is the point of contact within AMS to which State departments of agriculture and other appropriate State agencies may look for guidance and assistance in developing proposals, submitting applications, and meeting the administrative and reporting requirements for FSMIP projects. The principal responsibilities of the FSMIP Staff, on behalf of the Federal agency, are to:

Convey suggestions or recommendations to the States for improving marketing service programs and encourage planning and implementation of multi-State or regional marketing projects.

Help arrange for specialized technical assistance from AMS and other Agencies of USDA in developing FSMIP proposals and carrying out approved projects. Establish and conduct appropriate review and evaluation procedures for project proposals and fund requests submitted by the States. Recommend to the Administrator, AMS, allotments to States for each fiscal year and provide for the distribution of allotments among approved projects.

Review progress and final reports submitted by States for each approved project and distribute summaries of program activities and accomplishments. Make spot reviews of the expenditures of the States during program field visits to determine if they were made for approved project activities and in accordance with legal restrictions and administrative policies.

Help plan and conduct marketing workshops, conferences, or meeting sessions to facilitate interaction among State project leaders and representatives of USDA and industry in evaluating current marketing service programs and identifying improvements needed to solve major marketing problems.

Responsibilities of State Agencies

While the FSMIP Staff can help develop guidelines, provide or arrange for technical help, and give other assistance and guidance as needed in carrying out projects, the State department of agriculture or similar State agency has the principal responsibility for formulating and properly administering projects. The responsibilities of the State agency are to:

Review and continuously explore significant marketing problems and opportunities for service in marketing agricultural products.

Consolidate, if possible, marketing service work under one administrator.

Determine the order of priority of projects proposed for FSMIP funding.

Obtain the cooperation of producer groups and industry marketing
organizations in developing and conducting projects.

Prepare and submit project proposals with sufficient detail as to the needs, objectives, plan of work, resource requirements, and expected results to serve as a basis for determining the priority of the project relative to other proposals submitted. 

Coordinate efforts with other Federal, State, and local programs or offices which may be addressing similar issues or problems. Submit semiannual progress reports and a final, summarizing report of results and accomplishments. Final reports should include quantitative measures of results when possible.

Ensure that both FSMIP and matching funds are expended only for activities covered by approved project and work plan statements.

Ensure that proper accounting procedures are followed to facilitate periodic review of records and audits.

Seek mechanisms for shifting project efforts to support from other sources once a program becomes operational to the extent that such efforts can be justified by the results of the FSMIP project.

Procedures and Requirements

Standard Form (SF)-424, Application for Federal Assistance, SF-424A, Budget Information--Non-Construction Programs, and SF-424B, Assurances--Non-Construction Programs must be submitted with each proposal for FSMIP funds. An original and two copies of the application forms, narrative summary, and supporting documents are required for each proposal to be considered for FSMIP funding. The completed application and assurances forms must be signed by an official who has authority to apply for Federal assistance and to assure the availability of required matching non-Federal resources on behalf of the State agency.

Proposals may transmitted by:

U.S. Mail to: Package Delivery Service to:
FSMIP Staff
Transportation and Marketing Programs
Agricultural Marketing Service, USDA
P. O. Box 96456, Room 4006-S
Washington, D.C. 20090-6456

FSMIP Staff
Transportation and Marketing Programs
Agricultural Marketing Service, USDA
1400 Independence Ave. SW, Room 4006-S
Washington, D.C. 20250

Electronic Submission. While hard copy is required, applicants also are encouraged to submit soft copy (electronic) versions of their proposals. Concurrent electronic submission not only will expedite processing of the applications by the Federal agency, but also will facilitate the subsequent exchange of information between the Federal and State agencies with regard to proposals which are selected for funding. Complete or major portions of the proposals may be submitted as follows:

The preferred method is by file attachment to fsmip@usda.gov in the
following formats:
Text (*.txt)
Word (*.doc)
WordPerfect (*.wpd)
Rich Text Format (*.rtf)
Adobe Acrobat (*.pdf)
Alternatively, a standard 3.5" high-density disk using the same file formats may be enclosed with the hard-copy transmittal.  The forms themselves should be faxed to 202-690-4632.

Submission Deadlines

As in recent years, FSMIP funds will be allocated on the basis of two rounds of competition. Proposals received by February 18, 2000, will be considered for the first round of allocations. Proposals which are not selected during the first round, along with new proposals received by May 1, 2000, will be considered during the second round of fund allocations. We continue to encourage the submission of proposals in advance of these deadlines so that they can be reviewed with regard to basic eligibility requirements, completeness of applications, and other procedural matters. Successful applicants can expect to be notified of the acceptance of their proposals by late April for first-round allocations and by late August for second-round funding decisions.

Application Forms

All required forms may be downloaded in Adobe Acrobat format (*.pdf) from the OMB web site at http://www.whitehouse.gov/omb/grants/index.html#forms.

In addition, the SF-424 and SF-424A have been modified to include certain specific FSMIP data and to block out sections not applicable to the typical FSMIP application. These forms are available below as Adobe form-filler documents and can be completed on screen.

Most information blocks on the required forms are either self-explanatory or adequately explained by the instructions. However, the following information or supplemental instructions, associated with specific blocks on forms SF-424 and SF-424A, should be used for FSMIP proposals. The modified forms below reflect these supplemental instructions.

Block # Instruction
SF-424
#5
"Legal Name" and "Address" refer to the State agency submitting the application. Other agencies or organizations, which may be responsible for major elements or objectives of the project, should be identified in subsequent parts of the proposal. Similarly, the "Name of person to be contacted" should be the State employee responsible for the project, not necessarily the principal investigator or project leader. SF-424 #9 "Name of Federal Agency" is AMS, USDA. This block has been filled out on the modified form. SF-424 #10 "Catalog of Federal Domestic Assistance Number" is 10.156; and "TITLE" is FSMIP. This block has been filled out on the modified form. SF-424 #15 Under the "Estimated Funding" section, the following definitions apply: Federal = total FSMIP funds requested Applicant = funds or resources provided by the State agency in block #5 State = funds or resources provided by other State organizations Local = funds or resources provided by local governments Other = funds or resources provided by non-governmental sources accountable to the State SF-424A Section B Use column (1) to show distribution of FSMIP funds requested among cost categories. Use column (2) to show breakdown by category for matching funds from a single source. If matching funds will be provided from multiple sources, use additional columns to identify each source and the distribution of funds by category.

Forms available as Adobe form-filler documents:

SF424.pdf SF424A.pdf SF424B.pdf

Narrative Summary and Supporting Documents

A narrative description for each project proposal is required to assist the Federal agency in allocating FSMIP funds among competing proposals. The specific format, style of presentation, and length of the narratives may vary, depending on the nature of the project and the standard procedures of the State agency submitting the proposal. In general, narrative proposals of about 10 pages, exclusive of appended support letters and documents, are encouraged and should include the following sections: 

Cover-page and Abstract--include the names, titles, and roles of the State agency contac tand other principal participants, along with an abstract of approximately 200 words.

Background and justification--identify the issue or problem to be addressed and explain why the project is important and timely.

Goal(s) and objectives--outline specific elements of the project.

Plan of work--explain how objectives will be achieved and time lines associated with each objective or element of the project. If collaborative arrangements or subcontracting is involved, specify the role(s) and responsibilities of each cooperator or contractor. 

Expected outcome--describe what will be accomplished and how success will be
measured at the conclusion of the project.

Supplemental budget information--provide additional details or explanations, as needed, regarding the specific uses to be made of Federal funds, as well as the sources and uses of matching funds and in-kind resources. Letters or other evidence of commitment by secondary cooperators, contractors, or resource providers should be attached to the narrative description of the proposal. If the proposal is accepted for funding, States are required to send a copy of any contract or secondary agreement involved with the conduct of the project to the FSMIP staff. Brief summaries of experience or qualifications of principal project leaders also may be appended.

Selection Criteria

Applications meeting the basic eligibility requirements for FSMIP funding are reviewed and evaluated by subject-matter specialists within AMS and, as appropriate, among other USDA agencies. As a basis for determining allotments of available funds among competing proposals, the Federal agency is guided by the following criteria:

The relative need for the proposed activity or the relative importance of the problem to be addressed.

The benefits likely to be derived from the project in relation to the amount of Federal funds requested.

The strength of the State and other non-Federal support (including but not limited to the required matching funds or in-kind resources) pledged to the project or activity. 

The effect of an individual State's efforts on other States or on issues of national importance.

The measures which will be used to evaluate the project.

Awards of FSMIP funds at the requested amount or, if mutually satisfactory, at a reduced level will be announced by the Federal agency and grant agreements will be prepared for signature by the appropriate official of both the Federal and State agencies. Based on the time required for competitive evaluation of the applications and approval of the required documents, funds allocated during the first and second rounds of competition can be expected to be available to the States by about May 1 and September 1, 2000, respectively. Unsuccessful applicants will be contacted by the FSMIP Staff to discuss the results of the fund allocations process and to provide advice or recommendations with regard to potential revisions and resubmissions of their proposals.

Restrictions and Limitations on Program Activities and Expenditures

Expenditures of FSMIP and matching funds generally must conform to the budget information submitted within the State's Application for Federal Assistance, as accepted or modified by mutual consent when the proposal is selected for funding. However, States are permitted to shift expenditures from any one cost category or project element to another under an approved project without obtaining prior approval from FSMIP, provided the budgeted amounts for the involved cost categories or project elements are not increased or decreased by more than 20 percent.

Unless otherwise specified in these guidelines or in the Cooperative Agreement covering approved FSMIP projects, all expenditures and accounting shall be in accordance with applicable parts of USDA's Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments and with successive published regulations as appropriate. Records of receipts and expenditures of Federal funds must be identifiable within the State accounting system. The State department of agriculture or other appropriate State agency also must agree to furnish such records or reports as requested by AMS to document that both the Federal funds and the matching non-Federal funds or in-kind resources have been expended in accordance with terms specified in the approved project agreements.

See http://www.access.gpo.gov/nara/cfr/waisidx_99/7cfr3016_99.html for applicable regulations.

Following are some specific restrictions:

Category Restriction
Advertising and Promotion The Agricultural Marketing Act of 1946 prohibits the use of funds appropriated under the Act "...to pay for newspaper or periodical space or radio time..." FSMIP funds also cannot be used for the following: Product advertising through any medium, either directly or indirectly through an advertising agency or other firm.

General publicity or information programs designed to build the image of the State's agriculture or of a particular State department of agriculture or other State agency. Costs associated with county and State fair exhibits, as well as promotion of commodity months and weeks.

Purchase of:
Products or samples of products to give away to the public;

Promotional pieces such as point-of-sale materials, promotional kits, billboard space, signs or streamers, automobile stickers, table tents, and place mats; or  Promotion items of a personal gift nature. Equipment and Facilities Project funds cannot be used to pay for the construction of facilities but, with prior approval from FSMIP, can be used to pay the cost of building rental. Purchases of supplies and other materials necessary for the effective conduct of an approved project can be paid from the project account. Purchases of equipment costing more than $500 needs prior approval. Payments for necessary equipment rentals also may be charged to project funds with prior approval from FSMIP.

Salary and Travel If employees are used part time on FSMIP projects, appropriate records must be maintained to document any charges of salary and travel expenses against the project funds. Project funds cannot be used to pay salary and travel of employees of trade associations, cooperatives, commodity groups, and other industry organizations, or of State personnel while engaged in managing market orders, cooperatives, or other group endeavors.

Commissioners, directors, and secretaries of State departments of agriculture should not charge their salaries and travel to project funds, with the exception of travel to workshops or conferences devoted to FSMIP.

Marketing heads and other individuals responsible for FSMIP activities can charge the project account for the pro rata share of their salary and travel devoted to FSMIP, so long as such charges are documented (See 1. above.).

Printing It is proper to charge the cost of printing reports and publications of results to project funds. However, all such publications should show AMS as cooperator in the project and bear a statement such as the following: "State funds for this project were matched with Federal funds under the Federal-State Marketing Improvement Program of the Agricultural Marketing Service, U.S. Department of Agriculture." Project funds may be used to pay the cost of printing informational leaflets, such as commodity availability reports; grading, packing, and handling manuals; and publications on uses of new products and new product forms.

Administrative and Indirect Cost Administrative costs attributable to the project may be charged, on a shared basis, to both the Federal and matching funds allocated to the project or may be credited entirely toward the matching funds requirement. FSMIP retains the long-held policy of not paying overhead or indirect charges of either the State agency or its secondary contractors or cooperators from the Federal funds allocated to the project. It is permissible, however, for the State agency to include such charges as part of the matching funds requirement, provided that rates are established in accordance with appropriate cost principles for Federal grant programs.

Political Activity Provisions of the Hatch Act (5 U.S.C., pages 1501-1508 and 7324-7328), which limit the political activities of employees whose principal employment activities are funded in whole or in part with Federal funds, apply to FSMIP projects.

Reports of Progress and Accomplishments

Progress reports are required at the midpoint of each project approved for 1 year and at 6-month intervals for projects of longer duration. These reports generally should be brief summaries of activities performed and milestones achieved for each objective or subelement of the approved project narrative. Unexpected delays or impediments also should be noted.

A final narrative report of results and accomplishments is due within 90 days after the end of the project. While these reports are required for administrative and accountability purposes, they also should be viewed as mechanisms for sharing appropriate and timely information with the customers and clientele of both the Federal and State agencies. To facilitate such information sharing, either the entire final report or appropriate summary material should be prepared in a format which can be reproduced for relatively wide print distribution and/or which is suitable for Internet presentation. These reports should contain specific information on the following points:

What was the issue or problem(s) addressed?
What approach was followed, or what techniques were used?
What were the results and conclusions?
What benefits were or can be expected to be derived from the work?
What public or private agencies cooperated in the work?
What additional information (publications, speeches, or other documents) are
available and who should be contacted for such information?
Electronic submission of progress and final reports is encouraged, using the
formats and procedures described in the section Electronic Submission.

Requests for Payment and Financial Status Reports

Payment of grant funds must be requested by the recipient State agency, on an as-needed basis, using Form SF-270, Request for Advance or Reimbursement. A final Financial Status Report, SF-269, also is required within 90 days following the completion of the project. Copies of these forms generally are available in the financial offices of State agencies as well as on line (See our Application Forms section.). Completed forms, signed by the appropriate State official, are to be submitted to the FSMIP office as described in the section on Procedures and Requirements. 

States should retain copies of the progress reports, the final narrative report, and the final financial report for each project for a period of at least 5 years after the project has been completed.

Contact the FSMIP Staff

Larry V. Summers, FSMIP Staff Officer E-mail: Larry.Summers@usda.gov
Transportation and Marketing Programs
Agricultural Marketing Service
USDA
P. O. Box 96456
Room 4006-S
Washington, D.C. 20090-6456
Phone: (202) 720-2704
Fax: (202) 690-4948

Recent and Ongoing FSMIP Projects

Lists of the projects, by State, and the amounts of Federal funds provided for each project during the past 4 years can be viewed by clicking on one of the boxes below:

FY1996 FSMIP Grants FY 1997 FSMIP Grants FY 1998 FSMIP Grants FY 99 FSMIP Grants