VALUE-ADDED AGRICULTURAL PRODUCT
MARKET DEVELOPMENT GRANTS
Grants to Assist Agricultural Producers and
Groups enter into Value-Added Activities

Although farmers' markets are not typically thought of as value-added agriculture, farmers' markets do add value to a producer’s products by offering a direct market to sell their goods to consumers; they bring greater revenue to the producers themselves; and farmers often sell value-added products along with their fresh fruits and vegetables.

The VADG producer grant program offers competitive grants to help independent agricultural producers, producer groups, cooperatives, and commodity groups enter into value-added activities. Grants may be used to fund one of the following two activities: (1) Developing 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 (2) acquiring 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.

The maximum award per grant is $500,000. In order to maximize the distribution of program benefits, smaller grant requests under $500,000 will receive priority points.

This grant program has a matching funds requirement. Applicants must provide matching funds at least equal to the grant. Other Federal grants cannot be used as matching funds. Grant funds and matching funds must be spent proportionately during the timeframe stated in the grant application. Matching funds must be used to support the overall purpose of the VADG program.

Funding
There will be approximately $33 million available for grants under this program each year through 2007.

Next Round of Funding
The next round of funding for the producer grants is expected to be released early in calendar year 2003.

Project Examples
The St. Paul Growers Association, which operates farmers' markets, and received $135,500 for working capital to provide business support resources for development of value-added agricultural products, new expanded, year-round selling space and on-line retail sales opportunities for growers/producers.

The Rainbow Farmers Cooperative in Milwaukee, WI, that received $150,000. This grant will help them develop a business marketing plan to support an innovative value-added venture that works with socially disadvantaged and limited resource producers by providing an alternative outlet for fresh and health food to urban and rural markets.

To find out more about this program, including information on applying for a grant go to: www.rurdev.usda.gov/rbs/coops/vadg.html