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Grants Focus On Value Added Ag Products

USDA Rural Development grants help farmers and rural businesses improve existing products or expand marketing opportunities for current products

Published on: May 6, 2013

Agriculture Secretary Tom Vilsack last week announced the selection of 110 USDA Rural Development Value-Added Producer Grants to help ag producers and rural businesses create jobs, expand marketing opportunities, create uses for existing products and develop new products.

The awards include 11 biobased projects to convert corn stover to anhydrous ammonia; miscanthus fiber, wood and goat manure into biochar and enhanced compost; and sorghum to electricity and fertilizer.

Value-Added Producer Grants are an element of USDA's Know Your Farmer, Know Your Food initiative, which coordinates USDA's work to support local and regional food systems. The program addresses barriers to small business development and contributes to farmer-led job creation in rural areas.

USDA Rural Development grants help farmers and rural businesses improve existing products or expand marketing opportunities for current products
USDA Rural Development grants help farmers and rural businesses improve existing products or expand marketing opportunities for current products

VAPG grants may be used for working capital or to develop business plans and feasibility studies for new ventures. 

The National Sustainable Agriculture Coalition, which lobbied for VAPG funding, explained that the term "value-added" describes a process whereby an agricultural commodity or product has undergone a change in physical state or was produced, marketed, or segregated in a manner that enhances its value or expands the product's customer base.

Examples of value-added processes include:

•Commodity processing, either on-farm or in the local community: Among the new VAPG awards were fifteen dairies in twelve states for production and marketing projects or feasibility studies for artisanal and specialty cheeses made on-farm.

•Market differentiation: Eight VAPG awards went to organic products, including an award to the Oneida Tribe in Wisconsin for Organic White Corn Products.

•Commodity segregation: Among the new awards in this category was a grant to an Ohio grain elevator for a feasibility study to assess the export markets for non-GMO specialty soybeans.

•Development of mid-tier value chains (i.e., farm-to-fork supply chains in which farmers play a key decision-making role and share in the profits): This year's awards included a grant to the Mississippi Delta Southern Black Women in Agriculture Cooperative.  The Cooperative received funding to work with supply chain partners to develop, produce, and brand sweet potato products for local markets.

The VAPG program is featured in two bills recently introduced in Congress.  Both bills – the Local Farms, Food, and Jobs Act and the Beginning Farmer and Rancher Opportunity Act – propose to fund the VAPG program at $20 million a year in mandatory funding for the 2013 Farm Bill. 

Last year, the Senate-passed Farm Bill and the House Committee-passed Farm Bill included the equivalent of $10 million a year in farm bill funding for VAPG.

Latest VAPG award recipients can be found here.