Washington, DC – On June 28, the U.S. Department of Agriculture released a notice inviting farmers to apply for Value-Added Producer Grants (VAPG). The notice combines two years’ worth of funding for the program, making $37 million available for new value-added projects. Project proposals are due by August 29.



“We have fought hard for VAPG and are delighted the notice of funding availability is out and the program is once again open for business,” said Ferd Hoefner, policy director of the National Sustainable Agriculture Coalition. “Value-added grants are an important opportunity for entrepreneurially inclined small and mid-sized family farms to expand markets and increase farm income. The resulting projects also help meet consumer demand for quality food products and increase rural jobs.”



VAPG is a competitive grants program that awards grants to producers to help them develop farm-related businesses that add value to basic agricultural products through branding, processing, product differentiation, labeling and certification, and marketing. VAPG includes projects that market inherently value-added production, such as organic crops, grass-fed livestock, and locally produced and marketed food products. VAPG also funds regional food supply networks that benefit the small and mid-sized farms by incorporating the producer into the larger farm-to-plate value chains.



“Congress made a good choice in targeting VAPG funds to small and medium-sized family farms as well as to beginning and socially disadvantaged farmers and ranchers,” noted Hoefner. “Projects involving these target groups receive extra ranking points during the grant evaluation process. In addition, ten percent of program funding is reserved for local and regional food supply networks that link farmers with other processors and distributors that market value-added products in a manner that improves small and medium-sized farm profitability. Ten percent is also reserved for projects primarily benefitting beginning and socially disadvantaged farmers and ranchers.”



The VAPG program was initiated by Congress as part of the Agricultural Risk Protection Act of 2000 and extended and revised as part of the 2002 and 2008 Farm Bill. Funding in Fiscal Year 2010 was over $20 million, but funding was reduced to just under $19 million as part of the Continuing Resolution for Fiscal Year 2011. The agricultural appropriations bill recently passed by the House of Representatives would slash the program by more than a third to $12.5 million.



“We urge the Senate to reject the House-passed cut to VAPG and to maintain funding for this innovative, market-based jobs-creating program,” said Hoefner. 



Grants may be used to develop business plans and feasibility studies (including marketing plans) needed to establish viable marketing opportunities for value-added products or for working capital to operate a value-added business venture or alliance. 



“One of the stumbling blocks of late to farmers and groups of farmers seeking VAPG funding is the one-for-one matching grant requirement,” said Hoefner. “In a major win for farmers that NSAC fought for, farmers may now provide up to half the match requirement through “sweat equity” — the farmer’s time in developing or implementing the project. This is an important new development that should make it easier for farmers to apply for program funding.”


The agency estimates it will make about 250 awards. Awards are expected to be announced by the end of November 2011.



Applicants may submit a planning grant (up to $100,000 each) or a working capital proposal (up to $300,000 each). The agency is estimating, based on previous experience, the average size grant award will be $116,000. In the last round of awards, 41 percent of total awards were under $50,000. Applicants may propose any time frame for the project provided it does not exceed three years. The complete application package will be available from the USDA Rural Development site at www.rurdev.usda.gov/BCP_VAPG_Grants.html. Get the application package from the Rural Development site.



You can also find out more about eligibility and the application process guidelines by contacting your local USDA Rural Development Office, or contact the national program staff Lyn Millhiser at 202-720-1227 or Tracey Kennedy at 202-690-1428, or by emailing [email protected] for additional information.



If you are an agricultural producer or producer-controlled entity interested in applying, you can learn more at NSAC’s summary of the VAPG program and read this guide to applying from the University of Wisconsin’s Agricultural Innovation Center.  Templates for applications are available from the University of Nebraska’s Food Processing Center. More information specifically about this 2011 iteration of the program will likely be forthcoming in the near future.



To see how the FY 2009 awards were distributed and 15 examples of the projects that were funded, go to NSAC’s two-page summary of the 2009 VAPG projects.


To read a summary of the NSAC comments to USDA on the February 2011 Interim Final Rule for VAPG, or to read those comments in their entirety, go to this NSAC blog post. 

A video of USDA Deputy Secretary Kathleen Merrigan discussing the many innovative uses of the VAPG program is also available for viewing.




The National Sustainable Agriculture Coalition is a grassroots alliance that advocates for federal policy reform supporting the long-term social, economic, and environmental sustainability of agriculture, natural resources, and rural communities.