Do you have a commodity that you raise or grow that you are turning into a value added product and need to expand your market or customer base and do not have the resources to do so? Or do you have a value added product, that you could use assistance in the processing activities? If so, USDA Rural Development’s Value Added Producer Grant Program (VAPG) may fit your needs.
Each fiscal year, applications are requested through a notice published in the Federal Register and through an announcement posted on Grants.gov. While this year’s program dollar value and deadlines haven’t yet been set, application deadlines in the past have been the first week of July. Yes, that’s the middle of your grazing season, so you’ll want to start thinking about your potential project and grant request early. Just keep in mind that in 2015, there was $30 million available total. Maximum grant amount for planning grants was $75,000 and $250,000 for working capital grants. Grant amounts requested can be up to 50% of the total eligible project costs. The maximum amounts for both the planning grant and working capital grant are set each year in the Notice of Funding Availability published in the Federal Register.
What is the Value Added Producer Grant Program (VAPG)?
The VAPG program helps agricultural producers enter into value-added activities related to the processing and/or marketing of bio-based, value-added products. Generating new products, creating and expanding marketing opportunities, and increasing producer income are the goals of this program.
What Projects Are Eligible?
Grassfed producers have benefited from this program in the past to cover the butchering (processing), packaing and marketing of their beef. Other examples are included below. If you’re wondering if an idea you have might be eligible, contact the folks at your nearest Rural Development office and ask them.
Who can apply?
Independent Agricultural Producers, Agricultural Producer Groups, Farmer or Rancher Cooperatives, and majority-controlled producer-based business ventures. You may receive priority if you are a beginning farmer or rancher, a socially-disadvantaged farmer or rancher, a small or medium-sized farm or ranch structured as a family farm, a farmer or rancher cooperative, or are proposing a mid-tier value chain. Grants are awarded through a national competition.
Are matching funds required?
Yes, the applicant must evidence their ability to provide 50% of the total project costs at the time of the application. Applicant’s Match can consist of 25% cash match and 25% in-kind match (meaning labor, equipment, supplies, etc.).
What can the funds be used for?
Planning grant funds can be used for planning activities such as conducting feasibility studies and developing business plans for processing and marketing the proposed value-added product. Working capital grant funds can be used for such things as processing costs associated with the value added process, marketing and advertising expenses, and salary expenses for employees (However, grant or matching funds cannot be used to pay owner’s or owner’s family member’s salaries):
When and where do you apply?
Application deadlines are announced annually in the Federal Register. To date, no announcement has been made for Fiscal Year 2016. Applications must be received by 4:30 PM local time the day of the application deadline. Applications may be mailed or hand delivered to nearest Rural Development Office or submitted via Grants.gov. Potential applicants are highly encouraged to start the application process early by contacting a representative at their nearest Rural Development office. The staff there is happy to help you figure out how the system will work for you.
Thanks to Donald Nunn, Business and Cooperative Programs Specialist in the USDA’s Colorado State Rural Development Office for sharing this information with all of us!
I would look at last years announcement and get a draft submission setup before waiting for the announcement to come out. You can look at last year’s awardee’s (you probably know some of them!) and get a mentor to help with your application. If you wait to do everything after the announcement comes out you will most likely run out of time (as I almost did!). Last year they posted the announcement on May 8th and the package was due on July 7th… and everyone knows farmer’s aren’t busy that time of year! My only advice (whether you believe in taking money from the gov’t or not) is that this a good opportunity to get “free” funds to start a business – and the tracking of your expenses, sales, and time that the grant requires you to submit is something you should be doing anyways. You really only have to cash match 25% because if you’re just starting out who really pays themselves the other 25% that you can get from the grant? Also – make sure you allow for a “real” salary when including your wage time… they won’t blink if you say your time is worth $25-$30 an hr for your 25% wage match. Good luck!
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