Value-Added Producer Grants

To assist eligible independent agricultural commodity producers, agriculture producer groups, farmer and rancher cooperatives, and majority-controlled producer-based businesses in developing strategies and business plans to further refine or enhance their products, thereby increasing their value to end
users and increasing returns to producers.
Examples of Funded Projects

Grant funds are used to conduct feasibility studies, develop business and marketing plans, and provide working capital for value-added ventures.

Agency - Department of Agriculture

Established in 1862, the Department of Agriculture serves all Americans through anti-hunger efforts, stewardship of nearly 200 million acres of national forest and rangelands, and through product safety and conservation efforts. The USDA opens markets for American farmers and ranchers and provides food for needy people around the world.

Office - Contact the appropriate Rural Development State Office listed in Appendix IV of the Catalog or check the RBS Web site.

Relevant Nonprofit Program Categories

Program Accomplishments

Fiscal year 2007 funds were awarded to 157 recipients.

Uses and Use Restrictions

The VAPG program offers two types of grants.

Planning grants provide funding for the activities necessary to determine the viability of a potential value-added venture, including feasibility studies and business plans.

Working capital grants provide funds to pay the day-to-day expenses of the venture associated with marketing a value-added product.

An application may be for either a Planning Grant or a Working Capital Grant, but not both.

Eligibility Requirements

Applicant Eligibility

Eligible applicants are independent producers, agriculture producer groups, farmer- and rancher-cooperatives, and majority-controlled producer-based business ventures.

Beneficiary Eligibility

Agricultural producers.


Applicants must provide a budget supporting the work plan that details all sources and uses of funds during the project period. Applicants are required to verify matching funds, both cash and in-kind, such that USDA can verify all representations. Applicants must certify that matching funds will be available at the time grant funds are received. Matching funds must be spent in advance of grant funds.

Aplication and Award Process

Preapplication Coordination

An environmental impact statement is not required for this program.

This program is excluded from coverage under E.O.


Application Procedures

USDA will solicit applications on a competitive basis by publication of a notice in the Federal Register and through the Federal Web site. Unless otherwise specified, applicants must file an original and one copy of the proposal and all required forms or as otherwise instructed in the annual announcement. An applicant must submit Form SF-424, Form SF-424A, Form SF-424B, and other information as directed. Each proposal must contain the following elements and any additional elements published in the announcement: (1) Title Page; (2) Table of Contents; (3) Executive Summary, including a clear statement whether the application is for a Planning Grant or a Working Capital Grant and the amount requested; (4) Eligibility; (5) Proposal Narrative including, but not limited to: (i) Project Title; (ii) Information Sheet; (iii) Goals of the Project; (iv) Work Plan; (v) Performance Evaluation Criteria; (vi) Proposal Evaluation Criteria; (6) Verification of Matching Funds; and (7) Certification that matching funds will be available at the same time grant funds are anticipated to be spent and that matching funds will be spent in advance of grant funding.

Award Procedures

The Agency conducts an initial screening of all proposals to determine eligibility and completeness to allow for an informed review. Applications will be evaluated by experts selected by the Agency. After evaluation and scoring according to established criteria, the Administrator of Rural Business Cooperative Service reserves the right to award limited additional points: to ensure geographic distribution, for innovative projects, or to projects in underserved areas. Applications are funded in rank order until all available funds have been obligated. Final processing of the awards and monitoring of projects are the responsibility of the appropriate Rural Development State Office.


Published in the Federal Register.


Agriculture Risk Protection Act of 2000, Title VII, Public Law 106-224, as amended; The Farm Security and Rural Investment Act of 2002, Title VII, Public Law 107-171.

Range of Approval/Disapproval Time

From 100 to 150 days after the application is filed with the Rural Development-Cooperative Programs National Office.


Applicants may appeal any adverse decisions to USDA's National Appeals Division.



Assistance Considerations

Formula and Matching Requirements

7 CFR 4284.908 Use of grant and matching funds: (b) Grant funds may be used to pay up to 50 percent costs. Applicants will be required to contribute at least 50 percent in cash or inkind contributions. The maximum grant amount of a planning grant is $100,000 and of a working capital grant is $300,000. Matching funds include cash or confirmed funding commitments from nonfederal sources. In-kind contributions that conform to the provisions of 7 CFR 3015.50 and 7 CFR 3019.23, as applicable, can be used as matching funds. Examples of in-kind contributions include volunteer services furnished by professional and technical personnel, donated supplies and equipment, and donated office space. Matching funds must be provided in advance of grant funding such that for every dollar of grant advanced not less than an equal amount of matching funds shall have been funded prior to submitting the request for reimbursement. Matching funds are subject to the same use restrictions as grant funds. Funds used for an ineligible purpose will not be considered matching funds.

Length and Time Phasing of Assistance

Grant funds may be disbursed over a period of a year after obligation. No-cost extensions may be granted on a limited basis at the discretion of the Agency.

Post Assistance Requirements


Progress reports must be submitted to the Rural Development State Office as specified in the grant agreement.

A final report must be submitted to the Rural Development State Office within 90 days after the project has been completed.


In accordance with the provisions of OMB Circular No. A-133, Audits of States, Local Governments, and Non-Profit Organizations, nonfederal entities that expend financial assistance of $500,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. Nonfederal entities that expend less than $500,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in Circular A-133. Those nonfederal entities exempt from Circular A-133 are subject to the audit requirements outlined in the Grant Agreement.


The Grantee will maintain adequate records and accounts to assure that grant and matching funds are used for authorized purposes. Records required by Federal law and regulations will also be maintained by the Rural Development State Office and the Rural Development-Cooperative Programs National Office.

Financial Information

Account Identification



FY 07 $21,637,622; FY 08 est $19,000,000; and FY 09 est not reported.

Range and Average of Financial Assistance

Grants can be awarded for any amount up to $100,000 for Planning Grants and up to $300,000 for Working Capital Grants.

Regulations, Guidelines, and Literature

7 CFR Parts 1951; 7 CFR 3015; 7 CFR 3019; 7 CFR 4284, Subpart A--General Requirements for Cooperative Services Grant Programs, 4284.1 through 4284.100; and, Subpart J - Value-Added Producer Grants, 4284.901 through 4284.1000. See the RBS website for additional information. You may also contact Rural Development State and Local Offices and the Rural Business Cooperative Service Web site.

Information Contacts

Regional or Local Office

Contact the appropriate Rural Development State Office listed in Appendix IV of the Catalog or check the RBS Web site.

Headquarters Office

Deputy Administrator, Cooperative Services, Rural Business-Cooperative Service, Department of Agriculture, Washington, DC 20250. Telephone: (202) 720-7558. Use the same number for FTS.

Criteria for Selecting Proposals

Published in the Federal Register and through

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