Whether enabling dairy farmers in Nebraska to expand their line of fluid milk products or allowing an organic grain farmer in Missouri to understand the feasibility of equipment purchases for on-farm processing, the Value-Added Producer Grant (VAPG) program has been helping thousands of farmers around the country with expanding their customer base and income by creating new or developing existing value-added businesses.

In conjunction with today’s announcement by the U.S. Department of Agriculture inviting applications for available funding through its Value-Added Producer Grant (VAPG) Program, and in order to assist producers with the application process, the National Sustainable Agriculture Coalition (NSAC) has released its latest guide on VAPG: the updated Farmers’ Guide to Value-Added Producer Grant Funding.  An NSAC press release on the announcement is available here.  More USDA information can be found here.

First released in 2012 and revised to reflect various USDA changes to the application process and requirements, the updated NSAC Guide is available as a free download online.  It provides helpful hints to improve a producer’s chances of obtaining funding from the highly competitive program, including a step-by-step description of the application and ranking processes.

Administered by USDA Rural Development, the VAPG program has provided competitive grants to producers for working capital, feasibility studies, business plans, and marketing efforts to establish viable value-added businesses.

The current grant round will combine $10.5 million available from fiscal year 2013 and additional sums, expected to be more than $13 million, that will be available from fiscal year 2014 appropriations once Congress has passed an agricultural funding bill for 2014.

Individual and groups of producers, as well as farmer coops and producer-controlled businesses, are eligible to apply for grants to create, improve, or expand value-added businesses – thereby increasing income for America’s farmers and ranchers, along with fishermen, loggers, and other harvesters of agricultural commodities, through expanded marketing opportunities.

The deadline for applications is February 24, 2014.

Food Hubs and Biobased Products

For this particular funding cycle, USDA is encouraging food hub projects.  Food hubs involve the aggregation, storage, processing, distribution, and/or marketing of locally or regionally produced food.  Food hubs can qualify if they are farmer cooperatives, majority farmer-owned businesses, an independent producer steering committee (a group of farmers in the process of becoming an official entity), or are part of a mid-tier value chain.

Projects creating bio-based products — commercial or industrial products composed of biological products or renewable agricultural or forestry materials, such as construction materials, papers, compost, and plastics — are also being encouraged for this funding cycle.

Special emphasis is also being placed on projects from tribal communities.

In a change from past VAPG rounds, in this round USDA is narrowing the scope of on-farm renewable energy projects that qualify for funding.   Projects that produce energy from products or byproducts of farming, such as  biodiesel or electricity generation from on-farm materials are still eligible, but solar, wind, geothermal, and hydro projects are no longer eligible.

VAPG Part of Final Farm Bill Negotiations

As a long time champion of VAPG, NSAC fought for the program’s inception in the 2000 Agricultural Risk Protection Act.  Since its enactment, NSAC has successfully worked in subsequent farm bills to increase and maintain its funding and expand its mission to include organic food and farming, grass-fed and other sustainable livestock and dairy projects, local and regional food enterprises, a stronger focus on small and mid-sized agriculture, mid-tier value chains, and increase attention to underserved areas and populations, including beginning and socially disadvantaged farmers and ranchers.

With House and Senate conferees currently working on a final version of a new farm bill to replace the expired 2008 Farm Bill, several important rural development programs, including VAPG, hang in the balance.  Both the House and Senate versions of the Farm Bill provide funding for VAPG, one of several programs left without funding following the expiration of the 2008 Farm Bill last fall.  However, neither version is close to the historic average funding level of $20 million in annual funding – the Senate-passed farm bill provides $12.5 million a year, and the House-passed bill provides the equivalent of $10 million a year.  NSAC is encouraging the farm bill conferees to restore funding to the historic $20 million annual level.