USDA Grants

Grant Services

At Matson Consulting we understand that grants play a critical role in the development of many business projects. We assist our clients through the entire grant process; from identification of funding sources, to the development of the grant application, to providing expert consulting services regarding grant funding and management.

We have a high success rate with our grant assistance. We have helped more than 100 clients obtain more than 15 million dollars in grant funding. We have worked with grants of all sizes and types; from local government, to national foundations and federal programs.

Though we have experience in many programs, we have developed a specialty for USDA Rural Development grants, with a strong focus on three programs in particular:

On the topic of these programs we have presented more than 25 workshops and training courses in more than 5 states.

Value-Added Producer Grant (VAPG) Program

From: http://www.rurdev.usda.gov/or/biz/VAPGoverview.pdf

Grants to plan and implement value-added ventures to increase the revenue of commodity producers. Farmers, ranchers, foresters & fishermen may receive USDA Rural Development matching grants for either planning or working capital purposes to implement value-added ventures – i.e. for marketing or processing projects that will add value to the commodities they produce or for on-farm renewable energy generation projects. The goal of the program is to increase the producer’s share of revenue from the commodities they produce.

Funds available
In 2008, over $19 million was awarded nationwide. In 2009 and 2010, this amount went up to approximately $21 million for each year.

Authorized purposes
VAPG grants may be used for either Planning or Working Capital activities (but not both). Planning grant – $100,000 maximum per project (in FY2008; subject to change in FY2009) Eligible uses – feasibility analysis & market study; business plan; marketing plan (identification of market window, potential buyers, distribution system, & promotional campaigns); legal evaluations
Working Capital grant – $300,000 maximum per project (in FY2008; subject to change in FY2009)
Eligible uses – working capital needs – e.g., purchase of inventory, office equipment & supplies; pay salaries, utilities, & office rent; legal & accounting costs; conduct marketing campaign; branding & packaging materials.
NOTE: Working Capital applicants must have completed both a business plan & an independent feasibility study on their project.

Eligible applicants

Independent Producers (either individuals or business entities) – i.e. farmers, ranchers, foresters, and fishermen – who will produce a majority of the commodities to which value will be added & who will retain ownership of the commodities throughout the value-added process. (An informal group of independent producers – a “steering committee” – may also apply under this category, but if selected for funding, the group must form a legal, business entity structure before the award can be made.)
Agricultural Producer Groups – representing and controlled by Independent Producers (10 percent set-aside for socially disadvantaged and for new producers from 2008 Farm Bill)
Farmer or Rancher Cooperatives – consisting exclusively of Independent Producers
Majority-Controlled Producer-Based Business Ventures – legal business entity that is majority-owned and controlled by Independent Producers. (Note: Such applicants cumulatively may not receive more than 10% of VAPG funds.)
Mid-Tier Value Chains – local and regional supply networks that link farmers and ranchers with businesses and cooperatives that market value-added agricultural products. (10 percent set-aside for this area from 2008 Farm Bill)

Eligible value-added proposals
The proposed “value-added” activity must increase the value realized by a producer for their agricultural commodity – either by an increase in value of the commodity or by the expansion of the market for the commodity – due to either:

Commodity processing – i.e., processing that changes the commodity’s physical state (e.g., wheat flour, fruit jam, diced tomatoes, biodiesel, ethanol, fish fillets, wool rugs)
Non standard Production that Changes Production Value – i.e., producing or marketing a commodity in a way that is different from “normal” thereby creating a market identity that increases value (e.g., organic; special processes; appellations). Proposals in this category have only been eligible for Working Capital grants in past years. (From the 2008 Farm Bill. New title in 2009 )
Commodity segregation – i.e., physically separating the commodity from other similar commodities during both production & marketing (more than simple sorting by grade). Includes traceability & identity-preserved systems (e.g., GMO-free commodities; varietal purity).
Renewable energy – i.e., on-farm production of renewable energy (wind, solar, biomass, anaerobic digester, geothermal)
Local - i.e. products sold within the state that they are produced (from the 2008 Farm Bill. These rules are yet to be written.)

“Emerging market” requirement. Working capital projects must involve either a value-added product or a market outlet that the applicant has not traditionally supplied – i.e., not for more than 2 years. (Note: Independent Producer applicants are exempt from this requirement.)
Location: VAPG projects do not need to be located in a “rural” area.

Matching requirement
50% or more of project costs must come from other sources (no larger match is required). “In-kind” matching is allowed but strongly discouraged as it must be fully justified and documented, and it will be subjected to extensive verification. VAPG funds are disbursed only after the grantee has first contributed at least an equal amount for eligible purposes.

Grant limitations
The VAPG project cannot start before the grant award is closed and must be completed in 365 days or less. VAPG funds may not be used for:

Agricultural production, harvesting, or commodity transportation
Research & development (the specific value-added product must already be known & have a high probability of success)
Land, real estate facility planning, design, engineering, acquisition, repair, improvement, or construction
Purchase or rent machinery & equipment (other than office & computer equipment); vehicles or boats
Payments to any firm not at least 51% owned by US citizens or permanent residents
Payments to owners or family members (salaries, dividends, etc.)
Grant application costs; lobbying
Only one VAPG grant per applicant may be awarded in a fiscal year.
A given value-added project is restricted to not more than one Planning Grant plus one Working Capital Grant.

FY2011’s VAPG POINT criteria
VAPG grants are awarded competitively based on criteria
FY2011's criteria: Points	Planning Proposals	Working Capital Proposals
0-30	Nature of venture / overall merit of the project	Business viability
0-20	Qualifications of those doing work	Commitments & support
0-10	Commitments & support	Customer base & increased returns
0-20	Work plan / budget	Work plan / budget
0-10	Priority Points. Type of applicant – -Beginning Farmer or Rancher, Socially Disadvantaged Farmer or Rancher, -Operator of a Small or Medium-Sized Farm or Ranch (<$1 million in sales per year) that is structured as a family farm, Mid Tier Value Chain proposals, and Farmers or Rancher Cooperative	Priority Points. Type of applicant – -Beginning Farmer or Rancher, Socially Disadvantaged Farmer or Rancher, or -Operator of a Small or Medium-Sized Farm or Ranch (<$1 million in sales per year) that is structured as a family farm, Mid Tier Value Chain proposals, and Farmers or Rancher Cooperative
0-10	USDA Administrator discretionary points (innovation; underserved areas; geographic distribution, etc.)	USDA Administrator discretionary points (innovation; underserved areas; geographic distribution, etc. )

Shade points are awarded by 1 review by state personnel of USDA and 1 review by out of state independent reviewer.