Value Added Producer Grants Program Fact Sheet

Background

The Value-Added Producer Grant Program (VAPG) is a competitive grants program administered by the Rural Business Cooperative Service at USDA to help producers move into value-added agricultural enterprises. Authorized in the 2002 farm bill, this program aims to provide assistance to farmers and ranchers in planning and capital investment for value adding enterprises.

The most recent information on funding availability and applications is available through your state USDA Rural Development Office. For the NOSA, state contacts, and more, go to http://www.rurdev.usda.gov/rbs/coops/vadg.htm   The 2007 deadline is May 16, 2007.

The Center for Rural Affairs was instrumental in helping to create an expanded value added grant program in the 2002 farm bill to include not only processing but by adding value by how agricultural products are grown or raised, e.g. organic, grass-fed. We helped shape the value added producer grant program from a $10 million/year grant program to its current authorized level of $40 million (appropriations have been less in recent years). Since that time, the Center has seen an outpouring of interest and demand for this program from farmers and ranchers around the country who are developing businesses that grow their income and bring much needed jobs to their communities.

These innovative initiatives have strengthened the viability of small and mid-sized farms and ranches and have allowed farms and ranches to grow businesses around production practices that benefit the environment and our natural resources.

The Grant Program

Applicants for a Value-Added Producer Grant must meet fairly strict requirements outlined in the Notice of Solicitation of Applications (NOSA) to be eligible for funding. If you are an independent producer, a farmer or rancher cooperative, agricultural producer group, or a majority-controlled producer-based business venture, you are eligible to apply for a value-added grant.

The NOSA provides definitions for each of these categories, along with other requirements of the program. We strongly recommend that you locate a resource person in your county, state or region that can give you some professional advice on your grant application, as well as your business ideas.

How Do I Start?

Now is a good time to check with your state office or your state’s Department of Agriculture about recent news or upcoming workshops about the program. They can provide information, applications and guidance on when and how to apply for a grant. Set up a meeting with your USDA Rural Development office, educate them about your project, and ask them for information about the program.

All completed applications are submitted to the national office for Cooperative Services in Washington, DC for review by staff and independent reviewers. Points are assigned based on the evaluation criteria outlined in the NOSA.

Other sources for information regarding value-added enterprises or how to apply for a VAPG can be found at:

The Agriculture Marketing Resource Center website: http://www.agMRC.org This website offers a broad range of information on value-added, direct marketing initiatives. Through links to Innovation Centers around the country at the state level, the website makes available information on a broad range of issues.

Types of Grants

When applying for a grant, applicants must choose between two different types of activities for funding. Funding is available for:

1. Developing feasibility studies or business plans, which include marketing plans, or;

2. Working capital to operate a value-added business or alliance.

Applicants are eligible to apply for only one of these two types of grants each grant cycle. They do not penalize groups who go first for a planning then for a working capital grant.

Matching Funds

The program requires a one-to-one match. A cash match is defined as actual funds dedicated to the project. An in-kind match includes time, equipment, space, staff salaries, etc. Examples of a cash match might be third party contributions from groups, farm organizations or individuals donating cash towards a project; the salary of a person or persons working on a project (cash transaction); travel expenses to attend meetings or participate in training sessions; state appropriations or non-federal funds that have not been spent; bank financing; revolving loan funds; or county financing.

Examples of in-kind contributions include space; equipment; supplies, copies, telephone and other expenses which are dedicated to the project; volunteer time/unpaid services provided to a recipient by an individual or employee working on a project ( non-cash transaction); value of hours of non-federally funded personnel assisting with project, e.g. State Dept. of Agriculture, local economic development agencies, volunteer board members, etc; donation of office space or meeting rooms; or donation of inventory including equipment or buildings.

What Makes My Grant Proposal Likely to Be Funded?

The NOSA includes a list of evaluation criteria that are used to score applications for strength and merit. Reviewers award points to each application based on how well the applicant has addressed the requirements spelled out in the evaluation criteria.

Understanding the evaluation criteria of the program is important and will help you to assess the strengths of your project and application.


Useful Links

USDA: The Value Added Rural Development website: www.rurdev.usda.gov/rbs/coops/vadg.htm provides a list of all past projects funded, an eligibility assessment tool, the 2007 NOSA, and grant templates.

Agriculture Marketing Resource Center: This website offers a broad range of information on value-added, direct marketing initiatives. Through links to Innovation Centers around the country at the state level, the website makes available information on a broad range of issues. www.agMRC.org.

We are looking to identify a pool of independent reviewers who could be available to review value-added grants. People with backgrounds in organizing and managing value-added business ventures, writing grant proposals for value-added enterprises, and others who have a history with sustainable agriculture projects should contact Kim Leval, kimleval@qwest.net with the Center for Rural Affairs.

Contact Kim Leval, Senior Policy Analyst with the Center for Rural Affairs for more information on the Value Added Producer Grant Program, kimleval@qwest.net.