Value-Added Producer Grants Available

      Posted On: September 1, 2009

Today (9/1/09) USDA republished the 2009 Notice of Funds Available (NOFA) for Value-Added Producer Grants (VAPG). The opening of the program for applications was originally published in the spring, but without key components of the 2008 Farm Bill included. Following a protest by advocates and the Chairs of the House and Senate Agriculture Committees, the original notice was withdrawn and today has been reissued with substantial improvements.

Applications for this round of funding — $18 million is available, enough for approximately 80 project grants – are due by Monday, November 30. Awards will be made in early January.

Potential applicants should refer to the application requirements available on USDA’s VAPG webpage. In addition, applicants should contact their USDA Rural Development State Office by calling 1-800-670-6553. Applicants may submit a draft of their application to their State Office for a preliminary review anytime prior to September 30, 2009 to assess whether the proposed project meets eligibility criteria.

In a memo dated August 26th, USDA Deputy Secretary Kathleen Merrigan said that she suspects “many USDA programs are under-utilized by those seeking to build local and regional food systems.” The VAPG is one grant program that can provide direct assistance for producers and organizations helping producers to create and market value-added farm products both for farmers markets, other direct marketing outlets, and short-chain retail supply.

Among the changes made in the revised NOFA are a much stronger priority for projects targeted to small and mid-sized family farms and for projects serving beginning and socially disadvantaged farmers and ranchers. The definition of mid-sized farm was also increased from a top cut-off of $500,000 gross sales to $700,000 gross sales (3-year average), less than NSAC requested but still a step forward. Minority farmers will now have to represent 51 percent of producer groups and coops receiving funding under the 10 percent socially disadvantaged farmers and ranchers set-aside rather than 100 percent. A similar provision is likely included for the 10 percent beginning farmer and rancher set-aside although details of that decision are still forthcoming.

Provisions for the 10 percent of funds reserved for funding mid-tier value chain projects was improved in several ways: language was added to allow non-profit groups and agencies helping to organize and provide technical assistance to be part of the local and regional supply network; language was deleted prohibiting the participation of any supply chain participant that markets and distributes food nationally or internationally; and language was added to clarify that farmers involved in the value chain need not retain ownership of the product throughout the entire chain provided there is clear demonstration of increased revenue returns to the participating farmers. All three changes will make the new special focus more relevant and practical.

Clearer language was also included to promote local food products as an eligible purpose of the program. Local food is defined as the marketing of the product within 400 miles of the farm or within the same state. Applications under this provision must demonstrate and quantify how local marketing will result in added value.

An earlier provision limiting working capital grants to projects already marketing the value-added product was also dropped, making start-up projects once again eligible for program funding.