---
kind: "section"
citation: "7 U.S.C. § 1632d"
title: "7"
title_heading: "Agriculture"
number: "1632d"
heading: "Dairy business innovation initiatives"
release: "119-102"
url: "https://uscodex.org/usc/7/1632d"
units:
  - "Chapter 38 — Distribution and Marketing of Agricultural Products"
  - "Subchapter I — General Provisions"
---

# §1632d. Dairy business innovation initiatives

- (a) **Definitions—** In this section:
  - (1) **Dairy business—** The term “dairy business” means a business that develops, produces, markets, or distributes dairy products.
  - (2) **Initiative—** The term “initiative” means a dairy product and business innovation initiative established under [subsection (b)](#b).
- (b) **Establishment—** The Secretary shall establish not less than 3 regionally-located dairy product and business innovation [initiatives](#a-2) for the purposes of—
  - (1) diversifying dairy product markets to reduce risk and develop higher-value uses for dairy products;
  - (2) promoting business development that diversifies farmer income through processing and marketing innovation; and
  - (3) encouraging the use of regional milk production.
- (c) **Selection of initiatives—** An [initiative](#a-2)—
  - (1) shall be positioned to draw on existing dairy industry resources, including activities conducted by the National Dairy Promotion and Research [Board](/usc/7/1502.md?p=b-4) and other dairy promotion entities, research capacity, academic and industry expertise, a density of dairy farms or farmland suitable for dairying, and [dairy businesses](#a-1); and
  - (2) may serve a certain product niche, such as specialty cheese, or serve [dairy businesses](#a-1) with dairy products derived from the milk of a specific type of dairy [animal](/usc/7/8901.md?p=7), including dairy products made from cow milk, sheep milk, and goat milk.
- (d) **Entities eligible to host initiative—**
  - (1) **In general—** Subject to [paragraph (2)](#d-2), any of the following entities may submit to the Secretary an application to host an [initiative](#a-2):
    - (A) A State department of agriculture or other [State](/usc/7/1626.md) entity.
    - (B) A nonprofit organization.
    - (C) An institution of higher education.
    - (D) A cooperative [extension](/usc/7/5801.md?p=b-5) service.
  - (2) **Capacity of eligible entity—** Any entity described in [subparagraphs (A) through (D)](#d-1-A..d-1-D) of paragraph (1) shall be eligible to submit an application under that paragraph if the entity has—
    - (A) a capacity to provide consultation and expertise necessary to advance the purpose and activities of the proposed [initiative](#a-2); and
    - (B) expertise in grant distribution and tracking.
  - (3) **Ineligible entity—** A dairy promotion program shall not be eligible to host an [initiative](#a-2) under this section.
- (e) **Partners—**
  - (1) **In general—** An entity described in [subsection (d)(1)](#d-1) may establish as a partner an organization or entity described in [paragraph (2)](#e-2)—
    - (A) prior to the submission of the application under that subsection; or
    - (B) after approval of the application, in consultation with the Secretary.
  - (2) **Partner described—** A partner under [paragraph (1)](#e-1) shall be an organization or entity with expertise or experience in dairy, including the marketing, research, education, or promotion of dairy.
- (f) **Activities of initiatives—**
  - (1) **Direct assistance to dairy businesses—** An [initiative](#a-2) shall provide nonmonetary assistance directly to [dairy businesses](#a-1) through private consultation or widely available distribution—
    - (A) by the entity that hosts the [initiative](#a-2) under [subsection (d)(1)](#d-1);
    - (B) through contracting with industry experts;
    - (C) through the provision of technical assistance, such as informational websites, webinars, conferences, trainings, [plant](/usc/7/8901.md?p=10) tours, and field days; or
    - (D) through research institutions, including cooperative [extension](/usc/7/5801.md?p=b-5) services.
  - (2) **Types of assistance—** Eligible forms of assistance include—
    - (A) business consulting, including business plan development for processed dairy products, strategic planning assistance, and distribution and supply chain innovation;
    - (B) marketing and branding assistance, including market messaging, packaging innovation, consumer assessments, innovation in emerging market opportunities, and evaluation of regional, national, and international markets;
    - (C) assistance in product innovation, including the development of value-added products, innovation in byproduct reprocessing and use maximization, and dairy product production training, including in new, rare, or innovative techniques; and
    - (D) other nonmonetary assistance, as determined by the Secretary.
  - (3) **Grants to dairy businesses—**
    - (A) **In general—** An [initiative](#a-2) shall provide grants on a competitive basis to new and existing [dairy businesses](#a-1) for the purposes of—
      - (i) modernization, specialization, and grazing transition on dairy farms;
      - (ii) value chain and [commodity](/usc/7/1a.md?p=9) innovation and facility and process updates for dairy [processors](/usc/7/609.md?p=d-7-D); and
      - (iii) product development, packaging, and marketing of dairy products.
    - (B) **Grants to certain entities—** An [initiative](#a-2) may provide a grant on a noncompetitive basis to an entity that receives assistance under [paragraph (1)](#f-1) to advance the business activities recommended as a result of that assistance.
    - (C) **Grant amounts—** Grants provided under this paragraph shall not exceed $500,000, unless a greater amount is approved by the Secretary.
  - (4) **Consultation—** An entity that hosts an [initiative](#a-2) shall consult with the National Dairy Promotion and Research [Board](/usc/7/1502.md?p=b-4), the Secretary, and the Administrator of the Agricultural Marketing Service in carrying out the [initiative](#a-2).
  - (5) **Conflict of interest—**
    - (A) **In general—** The Secretary shall establish guidelines and procedures to prevent any conflict of interest or the appearance of a conflict of interest by an [initiative](#a-2) (including a partner of the [initiative](#a-2)) during the allocation of direct assistance under [paragraph (1)](#f-1) or grant funding under [paragraph (3)](#f-3).
    - (B) **Penalty—** The Secretary may suspend or terminate an [initiative](#a-2) if the [initiative](#a-2) (including a partner of the [initiative](#a-2)) is found to be in violation of the guidelines and procedures established under [subparagraph (A)](#f-5-A).
- (g) **Distribution of funds—**
  - (1) **In general—** Using the [funds](/usc/7/4531.md?p=5) made available to carry out this section, the Secretary—
    - (A) shall provide not less than 3 awards to eligible entities described in [subsection (d)](#d) for the purposes of carrying out the activities under [subsection (f)](#f); and
    - (B) is encouraged to award [funds](/usc/7/4531.md?p=5) under [subparagraph (A)](#g-1-A) in multiyear funding allocations.
  - (2) **Use of funds—** Not less than 50 percent of the [funds](/usc/7/4531.md?p=5) made available under [subsection (i)](#i) shall be allocated to grants under [subsection (f)(3)](#f-3).
  - (3) **Priority—** An entity hosting an [initiative](#a-2) shall give priority to the provision of direct assistance under [subsection (f)(1)](#f-1) and grants under [subsection (f)(3)](#f-3) to—
    - (A) dairy farms and [dairy businesses](#a-1) with limited access to other forms of assistance;
    - (B) employee-owned [dairy businesses](#a-1);
    - (C) cooperatives; and
    - (D) [dairy businesses](#a-1) that seek to create dairy products that add substantial value in processing or marketing, such as specialty cheeses.
  - (4) **Requirement—** Assistance or a grant shall not be made available to a foreign [person](/usc/7/1471g.md?p=b-1) making direct investment (as those terms are defined in [section 801.2 of title 15, Code of Federal Regulations](/cfr/15/801.2.md) (or successor regulations)) in the [United States](/usc/7/6402.md?p=8) in the case of—
    - (A) direct assistance under [subsection (f)(1)](#f-1) that is provided to a specific [dairy business](#a-1) and is not publicly available, as determined by the Secretary; or
    - (B) a grant under [subsection (f)(3)](#f-3).
  - (5) **Supplementation—** To the extent practicable, the Secretary shall ensure that [funds](/usc/7/4531.md?p=5) provided to an [initiative](#a-2) supplement, and do not duplicate or replace, existing dairy product research, development, and promotion activities.
- (h) **Report—** Not later than January 31, 2022, the Secretary shall submit to Congress a report on the outcomes of the program under this section and any related activities and opportunities to further increase dairy innovation.
- (i) **Authorization of appropriations—** There is authorized to be appropriated to carry out this section $20,000,000 for each fiscal year.

## Source credit

(Pub. L. 115–334, title XII, § 12513, Dec. 20, 2018, 132 Stat. 4996.)

## Notes

### Editorial Notes

### Codification

Section was enacted as part of the Agriculture Improvement Act of 2018, and not as part of the Agricultural Marketing Act of 1946 which comprises this chapter.

### Statutory Notes and Related Subsidiaries

### Definition of “Secretary”

“Secretary” means the Secretary of Agriculture, see section 2 of Pub. L. 115–334, set out as a note under section 9001 of this title.