US: Grant awards for local, organic, and niche markets

The National Sustainable Agriculture Coalition (NSAC) commended the U.S. Department of Agriculture (USDA) on its recently announced Value-Added Producer Grants Program (VAPG) awards. The announcement of $45.6 million in grants to help farmers and ranchers develop new products, businesses, and markets was made earlier today in Wisconsin by Agriculture Secretary Tom Vilsack. 325 projects from 47 states received awards in this fiscal year (FY) 2016 round of grants.

The FY 2016 VAPG awards are well distributed throughout the country, with the North Central region claiming 93 awards, followed by the South with 83, the West with 78, and the North East with 64. By sector, meat and dairy led the way with over 100 projects, followed by fruits and vegetables with over 80 projects and wine, cider, juices and other beverages with 75. NSAC, which has been a major champion of the program since its creation in 2000 and whose member organizations represent farmers from all over the country and in all sectors of agriculture, commends USDA for ensuring that the VAPG program has wide reach.

Ferd Hoefner, NSAC’s Policy Director, offered these additional comments on the announcement: “Value-Added Producer Grants help create small farmer-based businesses that increase farm income, generate good jobs, and improve consumer healthy food choices. The VAPG program has strong interest from significant segments of the farming community and is USDA’s premier agriculture-focused rural development program. VAPG provides producers with the tools they need to grow new enterprises, develop new markets, and create new value chains, which helps small and mid-scale family farms reach the profit margins they need to stay in business.

Today’s awards include over 50 local food projects, over 30 organic food projects, a dozen grass fed meat and pastured poultry and egg projects, and a handful of non-GMO feed grain projects. These innovative projects showcase the entrepreneurial skill of farmers who are constantly looking for ways to improve and meet growing consumer demand for high quality food.

Food hubs and mid-tier value chain development projects – mechanisms that connect farmers to the rest of the supply chain in a manner that result in farmers receiving a higher percentage of the consumer food dollar – were also funded through VAPG again this year. We were pleased to see these projects included, as they are key to fostering the development of strong local and regional food economies. USDA projections show that the demand for local and regional food will become a $20 billion market by 2019; VAPG is an important resource in building the infrastructure and business and marketing acumen American farmers need to meet the rising demand of this market.”

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 (i.e., identity-preserved, eco-labeling) in a manner that enhances its value or expands the consumer market for the product.

VAPG provides funding to individual independent agricultural producers, groups of independent producers, producer-controlled entities, organizations representing agricultural producers, and farmer or rancher cooperatives. VAPG may be used for working capital or to develop business plans and feasibility studies for new ventures. Up to $75,000 is available for planning grants and up to $250,000 is available for implementation grants, with project periods lasting from one to three years depending on the complexity of the project.

The congressionally established priorities for the program are projects that expand opportunities for small and mid-sized family farms as well as for beginning, socially disadvantaged, and military veteran farmers and ranchers. Local food marketing is also eligible, including value chains that link farmers to the rest of the food distribution system in a manner that increases the return to the farmer.

The $45.6 million allocated for FY 2016 awards represents the largest single-year award in the program’s history, a boon for producers who were able to put forward winning proposals this year. Approximately $35 million of the total came from the $63 million Congress provided for VAPG in the 2014 Farm Bill, the balance was from annually appropriated funds.

Each year NSAC publishes a free resource, the Farmers Guide to the Value-Added Producers Grants guide, to publicize the annual request for proposals and help farmers navigate the process. USDA tentatively plans to publish the fiscal year 2017 request for proposals in December of this year; closely following that announcement, NSAC will release a new edition of the guide.

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