VALUE ADDED PRODUCER GRANT PROGRAM

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VALUE ADDED PRODUCER GRANT PROGRAM
Fiscal Year 2007
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Purpose

• The Value-Added Producer Grant (VAPG) Program is
  intended to provide grant funds to agricultural
  producers for PLANNING ACTIVITIES and WORKING
  EXPENSES to assist them in receiving a greater
  share of the consumers dollar for value-added
  agricultural products.

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Policy

• It is the policy of the Agency to fund a broad
  diversity of projects that help increase the
  agricultural producers customer base and share
  of the food and agricultural system profit,
  including projects likely to increase the
  profitability and viability of small and
  medium-sized farms and ranches.

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ELIGIBILITY

• Applicant Eligibility
• Product Eligibility
• Purpose Eligibility
• Matching eligibility
• Other Eligibility

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APPLICANT ELIGIBILITY

• Independent Producer
• - producer of agriculture commodities or
• products
• - an association of producers such as LLC
  or
• LLP
• - a steering committee composed of
• agricultural producers

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APPLICANT ELIGIBILITY

• Independent Producer (cont.)
• Does NOT have to be in an emerging market.
• Must be 100 producer owned who produce more than
  50 of raw commodity of product to which value
  would be added
• Producers can NOT produce under contract with any
  organization other than their own.

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• Agricultural Producer Group
• - Any organization that represents independent
  
• producers such as a producer trade
• organization or a state or national
  commodity
• group.
• The proposal must be in an emerging market.
• Can NOT be a publicly owned corporation.
• Can NOT be a local division of government.
• The proposal MUST be a specific proposal for
• a specific group or activity.

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• Farmer or Rancher Cooperative
• - A business incorporated under state
• cooperative or corporation statues that
  is
• farmer or rancher owned from which
  benefits
• are derived and distributed equitably on
• the basis of use by each of the farmer or
  
• rancher owners
• 100 controlled and owned by agricultural
• producers
• Must be in good standing in the state of
• incorporation
• The proposal must be in an emerging
• market.

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• Majority Controlled Business Venture
• A venture where more than 50 percent of the
  ownership and control is held by Independent
  Producers or any entity that are themselves 100
  percent owned and controlled by Independent
  Producers.

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PRODUCT ELIGIBILITYWHAT IS VALUE ADDED?

• Change the physical state or form of the product
• Differentiated Production or Marketing
• Product Segregation
• Farm Based Renewable Energy

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EXAMPLES

• Change in physical state (e.g. lamb chops, diced
  tomatoes)
• Differentiated production or marketing (e.g.
  organic) - must reference a business plan
• Product segregation (e.g. identity-preserved
  corn)
• Convert any agricultural product or by-product
  into a renewable energy source, such as,
  biodiesel or ethanol arm-based renewable energy

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PURPOSE ELIGIBILITY

• PLANNING PURPOSES
• Economic activities to determine the viability of
  a potential value-added venture, including
• - feasibility studies,
• - marketing plans,
• - business plans and legal evaluation.
• Funds can not be used for planning or studies
  associated with
• building as construction or building plans.,
  Feasibility
• studies, business plans, and possibly, other
  studies will be
• required before grant funds can be used as
  working capital.

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PURPOSE ELIGIBILITY (Contd)

• WORKING CAPITAL PURPOSES
• Grants can be used to pay for operations prior to
  obtaining sufficient cash flow from operations
  such as
• - salaries, utilities and other operating
  costs
• - financing inventories
• - purchasing office equipment, computers, and
  supplies
• - financing other related marketing or working
  capital activities necessary to allow producers
  to better compete in domestic or international
  markets for value-added products.

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MATCHING ELIGIBILITY

• Matching funds of at least 50 of total project
  costs are required.
• Match must be spent at a rate equal to or greater
  than grant funds.
• Match must be provided by the applicant or a
  third-party in the form of cash or in-kind funds.
• Match must be spent on eligible purposes and must
  be from eligible sources.

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OTHER ELIGIBILITY REQUIREMENTS

• Grant period eligibility
• Completeness eligibility
• Current grant eligibility
• Multiple grant eligibility

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Grant Period Eligibility

• Applications cannot have a timeframe of more than
  365 days.
• The Notice Of Solicitation of Applications (NOSA)
  will restrict the starting and ending dates of
  the project. Make sure the proposed work plan
  takes those restrictions into account.

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Completeness Eligibility

• Applications must contain all requested
  information to be considered for funding.

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Current Grant Eligibility

• If the applicant currently has a VAPG, the grant
  period for that grant must be scheduled to expire
  by December 31, 2007.

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Multiple Grant Eligibility

• An organization can receive an unlimited
• number of grants, subject to the following
• restrictions
• - Only one grant per fiscal year
• - Only one planning grant and one working
• capital grant per project

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APPLICATIONS Required Forms

• SF-424
• SF-424A
• SF-424B
• Title Page
• Table of Contents
• Executive Summary
• Eligibility Discussion

• Goals of the Project
• Performance Evaluation Criteria
• Proposal Evaluation Criteria
• Certification of Matching Funds
• Verification of Matching Funds

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Funding Decisions

• National Competition.
• The Administrator of Rural Business
  Cooperative Service makes the final funding
  decisions.
• Applications will be funded in rank order until
  all available funds are expended.
• Successful/Unsuccessful applicants notified by
  State Office.

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Useful Links

• Program Website
• http//www.rurdev.usda.gov/rbs/coops/vadg.htm
• Federal Register
• http//www.gpoaccess.gov/fr/index.html
• Code of Federal Regulations
• http//www.gpoaccess.gov/cfr/index.html
• Office of Management and Budget
• http//www.whitehouse.gov/omb/
• Federal Acquisition Regulation
• http//www.arnet.gov/far/

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Local Contact InformationVIRGINIA

• Kent Ware, 804.287.1557
• Laurette Tucker, 804.287.1594
• USDA Rural Development
• 1606 Santa Rosa Road, Suite 238
• Richmond, VA 23229