Blog for Rural America

The Center for Rural Affairs, a private, non-profit organization, is working to strengthen small businesses, family farms and ranches, and rural communities. Permission to reprint items from this web log is hereby granted, on the condition that clear credit is given to the original source of the material. If the blog provides information for a story, please let us know by sending an email to johnc@cfra.org.

Tuesday, January 10, 2006

A Better Value Added Program

by Kim Leval, Center for Rural Affairs, kimleval@qwest.net

The Value Added Producer Grant (VAPG) program offers an important opportunity to target funding to small- and mid-sized farms, ranches and agricultural businesses pursuing new consumer driven markets for sustainably raised agricultural products. By supplying these markets to farmers and ranchers, the VAPG Program addresses agricultural profitability, economic decline and poverty alleviation in rural areas in new ways.

The authorizing language for the program adopted a set of broad purposes for VAPG that address the basic policy objectives to be advanced by the program. Language from the 2002 Farm Bill conference report includes:

The Managers intend that the Department (of Agriculture), in administering the (VAPG) program, will seek to fund a broad diversity of projects that help increase agricultural producers' 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. The Managers intend for the Department to consider a project's potential for creating self-employment
opportunities in farming and ranching and the likelihood that the project will contribute to conserving and enhancing the quality of land, water and other natural resources.

Language from the 2003 House Agriculture Appropriations Subcommittee Report includes:

The Committee is aware the Department (of Agriculture) will develop application and evaluation guidelines for the Value Added Agricultural Product Market Development Grant Program. The Committee expects the Department to develop ranking criteria to reward projects that help increase self-employment and entrepreneurial opportunities in farming and ranching, enhance the profitability and viability of small and medium-sized farms and ranches, and contribute to conserving and enhancing the quality of land, water and other natural resources.

Both the Farm Bill and subsequent appropriation bills clearly intended that the VAPG Program have broader goals than to increase value-added products and markets. The VAPG Program was intended to be an integral part of rural development policy by funding projects that both enhanced farm and ranch incomes and increased self-employment opportunities in rural areas. As such, it was intended to go beyond other farm income support programs – the VAPG Program was anticipated to be part of an asset- and wealth-building strategy of American rural development policy.

Debate will begin on the next Farm Bill in early 2006. The 2007 Farm Bill is a venue through which the VAPG will be reauthorized, the program evaluated and changes made. The VAPG program can better serve small and mid-sized farmers and ranchers, thus better addressing the economic forces affecting rural America. We recommend the following policy changes to better the program for small and mid-sized farmers, ranchers and for rural communities.

A. Recommendations for Congress

1. 2007 Farm Bill
► Congress must develop authorizing language placing a high priority for use of the VAPG program grant funds on proposals that are most likely to increase the profitability and viability of small- and medium-sized farms and ranches.
► Create a set-aside of no less than 10 percent but up to 15 percent of VAPG program funding for projects concerning beginning farmers and ranchers.
2. Budget Legislation
► Fully fund the VAPG program at its authorized level of $40 million
► Reinstate the mandatory budget status for the VAPG program.

B. Top Recommendations for the U.S. Department of Agriculture

► Develop a less complicated and more accessible application process.
► Eliminate the “project cost per producer” criteria from the application process. This feature shifts points to projects with high numbers of producers and disadvantages smaller scale projects.
►Include farmers and other end-users, including organizations representing sustainable agriculture issues and concerns, in the review and ranking of VAPG program proposals

C. Recommendations for the Administrative Branch

►Establish a presidential initiative within the VAPG program that specifically targets proposal evaluation points to proposals that increase income and self employment opportunities in farming and ranching and that benefit the local economy through social and environmental improvements to the area.

post a question or comment here or contact John Crabtree, johnc@cfra.org

Center for Rural Affairs
Values. Worth. Action.

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