On August 19, Secretary of Agriculture Tom Vilsack announced Value-Added Producer Grant Program (VAPG) awards for Fiscal Year 2014 to 247 farm businesses in 46 states.

The Value-Added Producer Grants (VAPG) program contributes to farmer-led job and business creation in rural areas, while enhancing food choices for consumers.  The program provides competitive grants to individual independent agricultural producers, groups of independent producers, producer-controlled entities, producer associations, and farmer or rancher cooperatives to create or develop value-added producer-owned businesses.

The 2014 grant awards totaled nearly $25 million.  The funding came from discretionary appropriations for VAPG in the FY 2013  and FY 2014 Appropriations Bill.  The new 2014 Farm Bill also provides $63 million in mandatory funding for the program, which will be used in coming years to supplement the amount appropriated each year by Congress.

VAPG grants may be used to fund business and marketing plans and feasibility studies or to acquire working capital to operate a value-added business venture or alliance.  Working capital applications must be supported by an independent feasibility study as well as a business plan.

By the Numbers

The 2014 awards include at least 23 mid-tier value chain, supply network, and food hub projects and at least 23 organic food projects.  At least 60 of the awarded projects are marketing their value-added products locally.  A dozen or more of the projects are to farmer coops. At least two projects are with tribal producers.

(Editors note: USDA provides relatively little information about the awards, so in each category cited above and below, there may be more in a category than what we can ascertain based on the very brief summaries provided.)

By product, meat/poultry/dairy led the way with at least 81 projects, with specialty crops (fruit, vegetables, nuts, etc.) close behind with at least 70 awards.  Wine, cider, juices, and other beverages weighed in with at least 40 projects, with grain and oilseeds (16), fuel and other non-food (13), and fish (5) next in order.

Approximately 15 percent of the awards were for planning grants and feasibility studies.

The 2014 grants were awarded to farmers and ranchers in 46 states in addition to Puerto Rico and Micronesia.  The top 10 states by number of awards are New York, Virginia, Washington, Wisconsin, Missouri, Georgia, Michigan, Maryland, Oregon, Pennsylvania, and Texas.  By total grant amount, the top 10 states also include Minnesota and California.

Only Connecticut, Rhode Island, West Virginia, and Wyoming came away empty in this particular funding cycle, though projects have been funded in all 50 states over the life of the program.

By region, the South led the way with 71 grants totaling over $8 million.  The North Central region was awarded 62 grants totaling over $6 million, with the Northeast close behind with 59 grants worth over $5 million.  The West region received 50 grants worth over $4.5 million.

VAPG Award Funding by Region

Project Examples

We are pleased to report that the Pennsylvania Association for Sustainable Agriculture – an NSAC member group – will receive funding to help farmers implement a food hub at the Mill Market LLC located in the Hawley Silk Mill (Hawley, PA).  The Market is a specialty food store with a mission of representing local sustainably raised foods.  Its focus is supporting small family farming in its region.  The store is also becoming a distribution hub for growers to connect with restaurants, schools, and institutions.  The funds will be used to expand the capacity of the market, allowing an increased number of local food producers (several of which are PASA members) to sell goods via the market, while also allowing them to reach a broader base of consumers as the Market has the increased capacity to advertise to a larger audience.

A North Carolina project markets spring mix, a stir-fry product, and a fruit and vegetable bar from 84 Montagnard refugee farmers, funded as part of the program priority for socially disadvantaged farmers and ranchers.  Also funded in that category was a Cherokee Nation feasibility study in Oklahoma looking at farm-identity preserved marketing and the potential for a Cherokee Food brand.

A Minnesota project will help the Stones Throw Agricultural Cooperative expand coop marketing opportunities for beginning farmers, another program priority.  The new program priority for veterans was utilized by a farmer veteran of Iraq and Afghanistan who is raising and marketing eggs and using the grant to develop the state and local market under the Prairie Pride Poultry name.

An innovative New York project is increasing the customer base in the Capital Region for Farmiemarket – an online farmers market – that will help 16 area small farms aggregate and sell pesticide and GMO-free food to online customers.

An Oregon project will help a farmer/miller to mill and distribute organic heirloom grains for both the retail and wholesale market in Oregon, Washington, and northern California under the Greenwillow Grains name.

A North Dakota food hub project will help a farmer coop with needed technical assistance to develop the North Dakota Food Hub to benefit small and mid-scale farms, while a Missouri project will fund a feasibility study for the Ozark Farmers Agricultural Cooperative to assess the potential for a food hub and distribution center in West Plains, MO.  The Wisconsin-based Fifth Season Cooperative will use its award for custom processing of individually quick frozen vegetable blends for institutional markets.  The Coop includes representatives of the entire food chain, from producers to processors to institutional buyers in the tri-state Wisconsin, Iowa, Minnesota area.

Farm Bill Revisions

NSAC helped create the program as part of the 2000 Agricultural Risk Protection Act and helped to expand and strengthen the program as part of the 2002 Farm Bill to include organic products and sustainable livestock niche markets.

NSAC also campaigned for improvements to the program made in the 2008 Farm Bill, including a consideration of local food enterprises and food supply networks linking farm to table, plus program priorities for assisting small and mid-size family farms as well as beginning and socially disadvantaged farmers and ranchers.

In the 2014 Farm Bill, Congress clarified how program priorities are to be assessed and added returning veteran farmers as a new priority category.  The 2014 bill also provided $63 million in mandatory (direct) farm bill funding for VAPG to supplement the annual appropriation the program receives.  The substantive changes and mandatory funding were NSAC farm bill priorities.

Annual Appropriations

The VAPG program received $15 million in discretionary appropriations for FY 2014.  The FY 2015 appropriations process has been stalled in Congress.  A final bill for FY 2015 (which begins October 1, 2014) is now not expected until December. The pending House and Senate bills include $10.75 million and $15 million, respectively, for VAPG. NSAC will be working to secure the Senate funding level in the final bill.

Additional Information

NSAC issued a press release on the VAPG awards and also has a farmers’ guide to the program on its website.

USDA Rural Development maintains a VAPG webpage. A full list of the new 2014 awards is available here.