USDA on June 28, 2011 released a notice inviting farmers to apply for Value-Added Producer Grants (VAPG). That notice combines two year's worth of funding for the program, making $37 million available for new value-added projects. Project proposals are due by August 29, 2011.
"But you need to get your application started now. You will likely need help on the paperwork," says Traci Bruckner, a farm policy specialist at the Center for Rural Affairs at Lyons, Nebraska.
"Any farmer or rancher who needs planning or working capital funds to move their value-added ideas forward should check out the Value-Added Producer Grants Program," adds Bruckner. "The 2008 Farm Bill made some important changes to this program by giving a priority to projects for beginning and small and mid-size family farms and ranches."
The program was created to help farmers expand their customer base for the products or commodities they produce. This results in a greater portion of revenues derived from the value-added activity being made available to the producer of the product.
Grants are popular and competitive, but help to apply is available
For more information on the VAPG program and how to apply, visit www.rurdev.usda.gov/BCP_VAPG_Grants.html. Applicants can also contact their USDA Rural Development State Office by calling 800-670-6553 and pressing (1). "You need to contact your nearest USDA Rural Development office now to get your application started," adds Bruckner. "Discuss your proposal and project with them and ask questions about the application process."
The Center for Rural Affairs is gearing up to help farmers during the application period by operating a "Farm Bill Helpline" so farmers can call in and receive assistance. Call 402-687-2100 and ask for the Farm Bill Helpline. Or potential applicants can also contact the helpline by sending and email with "Farm Bill Helpline" in the subject line to firstname.lastname@example.org. The Center for Rural Affairs has also created Value-Added Fact Sheets and other additional information, which can be accessed at www.cfra.org/node/2672.
Value-added grants are opportunity for small and mid-size farms
"We have fought hard for VAPG and are delighted the USDA's notice of funding availability is out and the program is once again open for business," says 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 ag products through branding, processing, product differentiation, labeling and certification, and marketing, says Hoefner. 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 small and mid-sized farms by incorporating the producer into the larger farm-to-plate value chains.
Project proposals receive ranking points in the application process
"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," says Hoefner. "Projects involving these target groups receive extra ranking points during the grant evaluation process. In addition, 10% 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. And 10% is also reserved for projects primarily benefiting 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 Bills. 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 ag appropriations bill recently passed by the House of Representatives would slash the program by more than a third to $12.5 million.
A move afoot in Congress to significantly cut funding for program
"We urge the Senate to reject the House-passed cut to VAPG and to maintain funding for this innovative, market-based jobs-creating program," says Hoefner.
The USDA VAPG 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," he says. "In a major win for farmers, something that our National Sustainable Ag Coalition fought for, farmers may now provide up to half the match requirement through "sweat equity" – that is, the farmers 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."
USDA estimates it will make about 250 awards for VAPG. Awards are expected to be announced by USDA by the end of November 2011.
You need to get your application in soon, here's how to apply
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% of total awards were under $50,000.
Applicants may propose any time frame for the project provided it does not exceed three years, says Hoefner. The complete application package will be available from the USDA Rural Development site at http://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@example.com for additional information.
Additional resources and information about this program available
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.