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Got A New Value-Added Idea You Need Money For?

Got A New Value-Added Idea You Need Money For?

Apply for a grant from USDA's $37 million producer grant program.

On Tuesday, U.S. Department of Agriculture issued an open invitation for farmers to apply for Value-Added Producer Grants. Project proposals for new value-added projects are due by August 29.

So if you have a market expansion idea for expanding local products and sales, but need a little extra cash infusion to make it happen, consider applying for a VAPG grant. That's exactly what Maine's Howling Hill Farm did in 2009. As a targeted beginning farmer, the business received a grant to expand goat milk processing in the last round of funding.

Despite being the epicenter of local food needs, only 9% of the 2009 grants went to the Northeast. Most went to the West and Midwest.

'MILK' YOUR MARKETS: A Value-Added Producer Grant may be just the ticket to kick-start your entrepreneurial idea, be it based on livestock or crops.

"Value-added grants are an important opportunity for entrepreneurially inclined small and mid-sized family farms to expand markets and increase farm income," says Ferd Hoefner, policy director of the National Sustainable Agriculture Coalition. "The resulting projects also help meet consumer demand for quality food products and increase rural jobs."

In a nutshell ...

VAPG is a competitive grants program that awards grants to producers to help develop farm-related businesses that add value to basic ag products through branding, processing, product differentiation, labeling and certification and marketing. It includes projects 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.

VAPG favors small and medium sized family farms as well as to beginning and socially disadvantaged farmers. And, 10% of program funding is reserved for local and regional food supply networks that link those farmers with other processors and distributors. Also, 10% is reserved for projects primarily benefiting beginning and socially disadvantaged farmers.

Grants may be used to develop business marketing plans and feasibility studies or for working capital. One stumbling block of past funding has been cleared, says Hoefner. "Farmers may now provide up to half the match requirement through 'sweat equity'. That should make it easier for farmers to apply for program funding."

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

Apply for a planning grant of up to $100,000 or a working capital proposal for up to $300,000. Based on past grants, the average grant award will be $116,000. In the last round, 41% of awards were under $50,000. Your project must be completed within three years.

The complete application package is available from the USDA Rural Development site at For additional information or questions, e-mail .

The National Sustainable Agriculture Coalition offers a summary that might help you prepare at this guide to applying from the University of Wisconsin's Agricultural Innovation Center. Templates for applications are especially valueable and available from the University of Nebraska's Food Processing Center.

To see 15 examples of the 2009 projects that were funded, go to NSAC's two page summary of the 2009 VAPG projects.

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