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:

• Conducting a feasibility analysis of a proposed value-added venture to help determine the potential success of the venture;

• Developing a business operations plan that provides comprehensive details on the management, planning, and other operational aspects of a proposed venture;

• 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;

• 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:

• Hiring an attorney to provide legal advice and to draft articles of incorporation, bylaws, and other legal documents related to the proposed venture;

• Hiring a Certified Public Accountant or other qualified individuals to design an accounting system for the proposed venture; or

• 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: 

• Plan, repair, rehabilitate, acquire, or construct a building or facility (including a processing facility);

• Purchase, rent, or install fixed equipment including mobile and other processing equipment;

• Pay for the preparation of the grant application;

• Pay expenses not directly related to the funded venture;

• Fund political or lobbying activities;

• Pay costs incurred prior to receiving this grant;

• Fund any activities prohibited by 7 CFR parts 3015 and 3019; and

• 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) Links