Deadline approaches for farmers to apply for USDA Value-Added Producer Grants

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WASHINGTON — The USDA recently released a notice inviting farmers to apply for Value-Added Producer Grants. The 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.

What it is

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.

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.

Uses

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.

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.

Application

The complete application package will be available from the USDA Rural Development site at www.rurdev.usda.gov/BCP_VAPG_Grants.html.

Those interested can also find out more about eligibility and the application process guidelines by contacting their local USDA Rural Development office or contacting Lyn Millhiser at 202-720-1227 or Tracey Kennedy at 202-690-1428, or by emailing cpgrants@wdc.usda.gov for additional information.

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