USDA Offers $30 Million for Food Entrepreneurs and Agricultural Producers to Develop New Value-Added Products

May 12, 2015 11:53 AM
USDA Offers $30 Million for Food Entrepreneurs and Agricultural Producers to Develop New Value-Added Products

Ever thought about expanding your dairy’s operations into a glass-bottled milk venture? Or vertically integrating with an artisan cheese or yogurt-making business?

Now could be your chance.

USDA is making $30 million available to farmers, ranchers and food entrepreneurs to develop new product lines. Funding comes from the Value-Added Producer Grant (VAPG) program.

The VAPG grants, awarded through a national competition, offer a matching fund requirement of 50% of total project costs. The maximum you can receive is $75,000 for planning grants, and $250,000 for working capital grants.

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. 

Grant and matching funds can be used for planning activities or for working capital expenses related to producing and marketing a value-added agricultural product. Examples of planning activities include conducting feasibility studies and developing business plans for processing and marketing the proposed value-added product. 

Examples of working capital expenses include:

  • processing costs
  • marketing and advertising expenses
  • some inventory and salary expenses

More information on how to apply is on page 26528 of the May 8 Federal Register. The deadline to submit paper applications is July 7. Electronic applications submitted through are due July 2.

“Farmers and ranchers are creative people who, with a little help, can put that creativity to work and improve the bottom line for their operations,” USDA Secretary Tom Vilsack said in announcing the VAPG availability last week. “Value-Added Producer Grants enable them to develop new product lines to grow their businesses and expand their contributions to our nation's economy.”

Among those given special priority in applying for the VAPGs are:

  • military veterans, socially disadvantaged, and beginning farmers and ranchers;
  • operators of small- and medium-sized family farms and ranches;
  • farmer and rancher cooperatives;
  • applicants that propose mid-tier value chain projects;
  • group applicants who seek funding for projects that "best contribute" to creating or increasing marketing opportunities for these type of operators.

Since 2009, USDA has awarded 853 Value-Added Producer Grants totaling $104.5 million. Approximately 19% of the grants and 13% of total funding has been awarded to beginning farmers and ranchers. During the 2013-2014 funding cycle, nearly half of VAPG awards went to farmers and ranchers developing products for the local food sector.

Congress increased funding for the VAPG program when it passed the 2014 Farm Bill. 

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