By Jon H. Harsch

© Copyright Agri-Pulse Communications, Inc.

WASHINGTON, Feb. 23 – Announcing wider availability of the Agriculture Department's $20 million Value-Added Grants Program (VAGP) Wednesday, USDA Deputy Secretary Kathleen Merrigan said the result will be “more people are going to stay on the land, more people are going to have viable enterprises. That's a win for American agriculture.”

Merrigan explained that the grants for feasibility studies, business plans, working capital for marketing value-added agricultural products, or for farm-based renewable energy projects are designed “to allow the farmer to capture more of the food dollar . . . rather than just being in the raw commodity business . . . you create a product, you brand a product, you develop a market for a product.That just improves your bottom line overall.”

One of the major changes in the new VAGP rules, Merrigan said, is “providing our farmers and ranchers an opportunity to value their own time” for matching the dollar amount of a USDA grant up to 25% of total project costs.

Another key change: the new rules raise the threshold to $1 million average annual gross sales of agricultural commodities in the previous three years (rather than $700,000) for family-owned farming and ranching operations to be eligible for VAGP grants. Merrigan said with the new higher limit, “some people who may have looked with longing at this program in the past may now find themselves eligible and we want them to know about it.”

Merrigan said the program's significant changes to benefit farmers, ranchers and co-ops are in response to public comments on USDA's original proposals and “make the program work a lot better for more people.”

USDA notes that eligible applicants include independent producers, farmer and rancher cooperatives, and agricultural producer groups. Value-added products are created when a producer increases the consumer value of an agricultural commodity in the production or processing stage.

To read the 45-page Feb. 23 Federal Register notice of USDA's “Value-Added Producer Grants Program Interim Rule,” click HERE. For full details on the program including application requirements, click HERE.

To watch a six minute video of Deputy Sec. Merrigan explaining how USDA's value added grants help producers, click the video play control:

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