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Introduction
The purpose of the Value-Added Producer Grant (VAPG) is to help eligible agricultural producers enter
into value-added activities. These grant funds will be used to
either develop feasibility studies, or business plans (including
marketing plans or other planning activities) needed to establish a
viable value-added marketing opportunity for an agricultural
product; or acquire working capital to operate a value-added
business venture or an alliance that will allow the producers to
better compete in domestic and international markets. In order to
provide program benefits to as many eligible applicants as possible,
applications can only be for one or the other of these two
activities, but not both.
Value-added products are defined as follows: (1) A change in the
physical state or form of the product (such as milling wheat into
flour or making strawberries into jam); (2) the production of a
product in a manner that enhances its value, as demonstrated through
a business plan (such as organically produced products); (3) the
physical segregation of an agricultural commodity or product in a
manner that results in the enhancement of the value of that
commodity or product (such as an identity preserved marketing
system). Value-added also includes using any agricultural product
or commodity to produce renewable energy on a farm or ranch.
Who Is Eligible?
Potential recipients of the grant must be an independent producer,
agricultural producer group, farmer or rancher cooperative, and/or a
majority-controlled producer-based business venture.
How May Funds Be Used?
Grant funds may used to pay up to 50 percent of the costs for
carrying out relevant projects. Grant funds and the applicant’s
matching funds must be spent at approximately the same rate. The
applicant’s matching contribution in cash or in-kind must be in
accordance with applicable provisions of 7 CFR parts 3015 and 3019.
For planning projects, grant funds and the recipient’s matching funds may
be used for, but are not limited to, hiring personnel including
lawyers, accountants and other qualified consultants associated with
the following purposes:
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Conducting a feasibility analysis of a proposed value-added venture
to help determine the potential success of the venture;
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Developing a business operations plan that provides comprehensive
details on the management, planning, and other operational aspects
of a proposed venture;
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Developing a business marketing plan for the proposed value-added
product or products including the identification of a market window,
the identification of potential buyers, a description of the
distribution system, and possible promotional campaigns;
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Obtaining legal advice and assistance related to the proposed
venture.
For working capital projects, grant and recipient’s matching funds
may be used to establish a working capital account to fund
operations. Funds from this account can be used for, but are not
limited to:
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Hiring an attorney to provide legal advice and to draft articles of
incorporation, bylaws, and other legal documents related to the
proposed venture;
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Hiring a Certified Public Accountant or other qualified individuals
to design an accounting system for the proposed venture; or
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Paying salaries, utilities, and other operating costs; financing
inventories; purchasing office equipment, computer, and supplies;
and financing other related activities necessary to establish
alliances or business ventures that allow producers to better
compete in domestic or international markets for value-added
products.
Ineligible Grant Uses
Grant and matching funds cannot be used to:
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Plan, repair, rehabilitate, acquire, or construct a building or
facility (including a processing facility);
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Purchase, rent, or install fixed equipment including mobile and
other processing equipment;
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Pay for the preparation of the grant application;
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Pay expenses not directly related to the funded venture;
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Fund political or lobbying activities;
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Pay costs incurred prior to receiving this grant;
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Fund any activities prohibited by 7 CFR parts 3015 and 3019; and
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Fund architectural or engineering design work for a specific
physical facility.
Grant and matching funds cannot be used to pay any expenses related
to the production of any commodity or product to which value will be
added.
Value-Added Producer
Grants (VAPG)
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