In case you missed the NSAC/USDA webinar for prospective VAPG applicants on January 23, 2020, find the recording here.

“Value-added” foods and goods are made from raw agricultural products (e.g., vegetables, grains, or dairy) that are minimally processed and then transformed into products like cheese, sauces, and breads. Specially labeled or marketed goods (e.g. “organic” or “locally grown”) can also be considered value-added as the label claim makes their products more appealing (valuable) to consumers. Value-added products bring in higher prices than raw products alone, which helps farmers and ranchers improve their bottom lines and grow their businesses – which in turn increases hiring and spending in their local communities! Making the jump to value-added production can be time and money intensive, however, which is why many producers use the U.S. Department of Agriculture’s (USDA) Value-Added Producer Grant (VAPG) program to kickstart new or expand existing value-added operations.

On December 11, 2019, USDA Rural Development announced the availability of at least $37 million in funding for VAPG projects and a 90 day application period. This funding is drawn from a combination of annual appropriations and 2018 Farm Bill funding. Following USDA’s funding announcement in December, FY 2020 appropriations were finalized, which included an additional $12 million in grant funding for VAPG. Given the availability of additional funds, the total funding available for this VAPG cycle may increase. Producers may request up to $75,000 for VAPG planning grants and up to $250,000 for implementation/working capital grants.

The deadline to submit paper VAPG applications in-person or via mail is March 10, 2020, while the deadline to submit electronic applications is March 5, 2020. Electronic applications must be submitted through grants.gov. In order to help ensure a strong applicant pool, we encourage all readers to help get the word out to qualified individuals and groups.

The Notice of Solicitation of Applications (NOSA) for VAPG largely mirrors previous NOSAs. Noteworthy changes are detailed below.

VAPG Basics

VAPG is a subprogram of the newly created Local Agriculture Market Program (LAMP) that provides competitive grants to individual independent agricultural producers, groups of independent producers, producer-controlled entities, organizations representing agricultural producers, and farmer or rancher cooperatives to create or expand value-added producer-owned businesses. Priority is given to projects that increase opportunities for small and mid-sized family farms, and/or for beginning, veteran, and socially disadvantaged farmers and ranchers.

For more information on VAPG and program eligibility, click here or visit our recently updated Farmers’ Guide to Applying for the Value Added Producer Grant Program. USDA has also created a “toolkit” for applicants, which includes an application checklist, templates, required grant forms, and instructions (this can be found under the “To Apply” tab).

NSAC and USDA Rural Development hosted a webinar for prospective VAPG applicants on January 23, 2020. In case you missed it, you can find the recorded webinar here.

What’s New: Hemp

VAPG projects related to hemp production, as defined and authorized in the 2018 Farm Bill, are eligible for the first-time for VAPG assistance, provided the project meets all other VAPG requirements and the applicant has a valid producer license. Applicants must also verify compliance with USDA’s related regulations. 

What’s New: Priorities and Funding Set-Asides

As part of the application process for this year’s NOSA, new priority points are available for eligible applicants who have never previously been awarded a VAPG grant. Applicants, however, must specifically request consideration for these points and discuss how the project supports one of the following key strategies of the Rural Prosperity Task Force; Achieving e-connectivity for rural America; Improving Quality of Life; Supporting Rural Workforce; Harnessing Technological Innovation; Economic Development.

Unfortunately, due to the timing of the NOSA, all funding set-asides have been once again rendered moot. The 2014 Farm Bill’s funding set-asides (including a 10% reservation for beginning and socially disadvantaged producers) only lasted until June 30 of each fiscal year, after which point the reserved funds would revert back to the general VAPG funding pool. The 2018 Farm Bill removed this provision, but USDA has at this time chosen to interpret Congress’ language to mean that the cut-off date still stands, but is changed to September 30 of each fiscal year. The current VAPG NOSA indicates that after September 30, 2019 all funding reservations will go back into the general funding pool.

Under this interpretation of the 2018 Farm Bill, the VAPG NOSA just released last month includes no funding set asides, because they all expired in 2019 (before the release of the NOSA). Though this is most assuredly frustrating, the good news is that it does not affect the priority points available to projects that increase opportunities for small- and medium-sized family farms and historically underserved producers.

VAPG is a very competitive program, and oftentimes the difference of just a few points on an application can make or break an award opportunity. This means that priority points make a significant difference for an applicant, and can help small- and medium-sized family farms and underserved producers let down by the lack of set-asides this round to effectively compete for funding. Beginning farmers, farmers of color, and other socially disadvantaged producers are encouraged to apply and leverage priority points to their advantage.

What’s New: Food Safety

The 2018 Farm Bill reauthorized VAPG through a new umbrella program, LAMP, which combined VAPG with the Farmers Market and Local Food Promotion Program (FMLFPP) and provided both programs with permanent mandatory funding. The bill also expanded VAPG to include support for food safety improvements and training. Up to 25 percent of total VAPG funds can be used for a new simplified application option to support producer costs related to food safety certification and changing and/or upgrading food safety practices and related equipment ($6,500 maximum grant). However, the food safety funding is not yet available as it requires a forthcoming federal rulemaking to implement. The new food safety application option should hopefully be available for the next VAPG grant cycle.

NSAC’s Legacy of Advocacy

The National Sustainable Agriculture Coalition (NSAC) helped to create VAPG as part of the 2000 Agricultural Risk Protection Act. For the last twenty plus years, NSAC has been one of the leading advocates for VAPG and other programs that support local food systems and rural development. In the 2002 Farm Bill, NSAC successfully advocated to strengthen VAPG and expand the program to include support for organic products and sustainable livestock niche markets.

In the 2008 Farm Bill negotiations, NSAC won the addition of local food enterprises and food supply networks linking farm to table as eligible activities for VAPG support. We also worked with Congress to secure program priorities for assisting small and mid-size family farms and for beginning and socially disadvantaged farmers and ranchers. In the 2014 Farm Bill, NSAC worked with Congress to ensure that program priorities were being met when USDA selects successful proposals. We also won the addition of returning veteran farmers as a new priority category.

The 2018 Farm Bill reauthorized VAPG through LAMP, which guarantees VAPG permanent mandatory funding at $17.5 million per year for the next five years – a major victory for NSAC and our allies in the local/regional food community. The 2018 Farm Bill provides LAMP with $50 million in mandatory funding per year, of which $23.5 million is reserved for FMLFPP, $17.5 million for VAPG, $5 million for a new Regional Partnership Program, and $4 million for outreach, evaluation and administrative expenses.

In addition to our farm bill work, NSAC has also led appropriations advocacy to secure additional, discretionary funds for VAPG. The FY 2019 omnibus appropriations bill included $15 million for VAPG, and the FY 2020 minibus appropriations bill includes $12 million in additional funding for the program.