Now available:

The Notice of Solicitations of Applications (NOSA) for the 2009 VAPG program was released May 6 then subsequently retracted.  The revised NOSA was released September 1, 2009; a subsequent modification to the allowed project start date was issued on October 5.  The significant changes in the revised and modified NOSA include:

1. Applications were due Monday, November 30, 2009. 

2. Projects cannot begin earlier than June 1, 2010 or later than November 30, 2010.  Projects cannot end later than November 30, 2013.

3. The new provision in the original 2009 NOSA requiring applicants to list all of their owners/members by name, with the percentage of ownership/membership of each, was not changed.  Also unchanged is the requirement to list the owners of all owners/members that are not individuals (e.g., a partnership, S corporation, or LLC that is a member of a cooperative or trade association).

4. The new provision in the original 2009 NOSA disqualifying in-kind time by applicants as a match for planning grants was not changed, nor was other “conflict” language that may impact the eligibility of certain cash and in-kind matches.

5. “Innovation” as a separate evaluation/scoring criteria has been deleted.

6. The terms “Project” and “Pro Forma Financial Statement” are now included in the definitions.  This is not earthshaking, however these terms have long been used in the VAPG NOSAs but the definition has been left open.

7. More points have been allocated to beginning small and medium sized, socially disadvantaged farmers/ranchers. 

8. More points have been allocated to those making smaller requests.

9. New language states “Applications that propose only branding, packaging, or other similar means of product differentiation are not eligible … however, applications may propose branding, packaging, or other product differentiation activities as a component of a value-added strategy for products otherwise eligible ...”.  We have seen few projects in the past that fit this description, but there have been notable exceptions.

10. As in the past, applicants may submit drafts of their applications to their State Offices for a preliminary review (anytime prior to November 2, 2009). The preliminary review will only assess the eligibility of the application and its completeness. The results of the preliminary review are not binding on USDA.

Click here for the official full revised 2009 VAPG NOSA. 

There have been significant changes compared to recent years; please see the summary and the link to the official NOSA below.  The total amount available will be $18 million, about the same as 2008.  Like last year, the maximum award for working capital projects will be $300,000 and the maximum for planning grants will be $100,000.  

Serious applicants should assess their proposed projects as soon as possible.  This program is typically very competitive; 6 of the 23 applications submitted in California in 2008 were successful.  Morrison & Company wrote half of these successful proposals. 

Morrison & Company has been blessed with a record of 34 of 37 full grant proposals since its founding in 2002; we can help with a preliminary assessment of your project at no charge.  For more on our grant services, please click here.    

The 2009 regulations are summarized for your convenience below; click here for the official full revised 2009 VAPG NOSA:  

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SUMMARY OF 2009 VAPG REGULATIONS:

Regulations at a glance

Changes from last year

Purpose of the VAPG program

Due dates

What are value-added agricultural products?

Planning grants

Working capital grants

Eligible uses

Ineligible uses

Eligible applicants

"Reserved" and "unreserved" funds

Matching funds

Evaluation process

Where can I find the official NOSA (rules) and application guidance?

I have more questions

Regulations at a glance

1.      Grant and matching funds must be used to promote value-added agricultural products, primarily for the benefit of agricultural producers.

2.   “Value-added agricultural products” are described below. 

3.   Eligible applicants are described below.  

3.      Grant and matching funds may be used for domestic or international projects.

4.      Grant and matching funds may be used for planning projects or working capital projects, but not both in the same year's program.

5.      Projects must last no more than 36 months, begin no sooner than June 1, 2009.

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Changes from last year

Some of the more notable changes from last year include:

1. The 2009 NOSA creates reserved and unreserved funds, to which 20 percent and 80 percent of total funding will be allocated, respectively.    

2. Biofuels for non-farm use or sale are considered value-added products for the first time since the 2005 program.

3. Projects may now be completed within 36 months instead of one year.

4. Local and Regional Supply Networks have been created as an applicant type. 

5. Match and grant funds must be expended proportionate to their respective totals; previously match funds had only to be spent at least at the same rate (in dollars) as grant funds.

6. The page limit for the proposal narrative has been reduced from 35 pages to 15. 

7. There are reduced application requirements for applications seeking less than $50,000.

8. Fifteen additional points (out of a total of 90) are awarded to applicants that are a Beginning Farmer or Rancher, a Socially Disadvantaged Farmer or Rancher, or an operator of a Small (<$250,000 average annual revenues) or Medium-Sized (<$750,000 average annual revenues) Farm or Ranch that is structured as a Family Farm.

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Purpose of the VAPG program

The purpose of the VAPG program is to enable producers of agricultural commodities to participate in the economic returns from “Value-Added Agricultural Products,” which are agricultural commodities or products that have been changed, produced, or segregated in such a way as to increase their market value.  Grants may be used to:

·        Develop business plans and strategies for creating marketing opportunities, market studies, and feasibility studies (Planning Grants)

·        Provide capital to establish business ventures that allow the producers of the value-added agricultural product to better compete (Working Capital Grants).

Projects may be in domestic or international markets, or both.

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Due Dates

Applications must be postmarked or electronically filed by November 30,2009.  State USDA Rural Development offices can do a non-binding review for eligibility only of applications submitted for that purpose by November 2, 2009.

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What are value-added agricultural products?

Any agricultural commodity or product that:

·         Has undergone a change in physical state (e.g., juice, salsa, bread, bio-diesel), or

·         Was produced in a manner that enhances the value of the agricultural commodity or product, as demonstrated through a Business Plan that shows the enhanced value (e.g., organic products), or

·         Is physically segregated in a manner that results in the enhancement of the value of the Agricultural Commodity or product (e.g., non-GMO), or

·         Is a source of farm- or ranch-based renewable energy, including E–85 fuel, or

·         Is aggregated and marketed as a locally-produced agricultural food product (generally, sold within 400 miles of the farm or ranch)

AND

·         The customer base for the agricultural commodity or product is expanded, and

·         A greater portion of the revenue derived from the marketing, processing, or physical segregation of the agricultural commodity or product is available to the producer of the commodity or product.

In addition, the 2009 NOSA creates "Mid-Tier Value Chain Projects."  Mid-tier value chain projects must involve "Local and Regional Supply Networks" that contain at least two alliances, linkages, or partnerships within the value chain. They must also directly impact the profitability and competitiveness of Small and Medium- Sized Farms and Ranches that are structured as Family Farms. Finally, the project must include an agreement from an Agricultural Producer Group, Farmer or Rancher Cooperative, or Majority- Controlled Producer-Based Business Venture that is engaged in the value chain on a marketing strategy.

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Planning grants

These are grants to facilitate the development of a defined program of economic activities to determine the viability of a potential value-added venture such as feasibility studies, marketing strategies, business plans, and legal evaluations.   Planning grant funds may be used to develop a business plan or perform a  feasibility study to establish a viable marketing opportunity for a value-added producer.  These uses include, but are not limited to:

·              Obtain legal advice and assistance related to the proposed venture;

·              Conduct a feasibility analysis of a proposed value-added venture to help determine the potential for marketing success;

·              Develop a business plan that provides comprehensive details on the management, planning, and other operational aspects of a proposed venture;

·              Develop a marketing plan for the proposed value-added product, including the identification of a market window, the identification of potential buyers, a description of the distribution system, and possible promotional campaigns.

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Working capital grants

These grants provide funds to operate ventures and pay normal expenses that are eligible uses of grant funds.  Working Capital Grant funds may be used to provide capital to establish business ventures that allow the producer of the value-added agricultural product to better compete in domestic or international markets.  These uses include, but are not limited to:

·              Design or purchase an accounting system for the proposed venture;

·              Pay for salaries, utilities, and rental of office space;

·              Purchase inventory, office equipment (e.g. computers, printers, copiers, scanners), and office supplies (e.g. paper, pens, file folders)

·              Conduct a marketing campaign for the proposed value-added product.

Applicants for working capital grants must have a feasibility study prepared by an independent consultant and a business plan prior to submitting the application.   If this affects you and/or you do not currently have an independently prepared feasibility study or a business plan, contact Morrison & Company.  With CPAs on staff, we can do this as part of our integrated services in a timely, cost effective manner.

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Eligible uses

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

2.      Grant funds may be used to pay up to 50 percent of the costs for carrying out relevant projects. Matching funds must provide for the balance of costs.

3.      Matching funds may only be used for the same purposes allowed for grant funds.

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Ineligible uses

Grant and matching funds may not be used to:

1.      Plan, repair, rehabilitate, acquire, or construct a building or facility, including a processing facility.

2.      Purchase, rent, or install fixed equipment, including processing equipment.

3.      Purchase vehicles, including boats.

4.      Pay for the preparation of the grant application.

5.      Pay expenses not directly related to the funded venture.

6.      Fund political or lobbying activities.

7.      Fund any activities prohibited by 7 CFR parts 3015 and 3019.

8.      Fund architectural or engineering design work for a specific physical facility.

9.      Fund any expenses related to the production of any commodity or product to which value will be added, including seed, rootstock, labor for harvesting the crop, and delivery of the commodity to a processing facility.

10. Fund research and development.

11. Purchase land.

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Eligible applicants

Grants will be awarded to :

·         Independent producers (includes agricultural producers, steering committees of producers who have not yet formed a formal business entity, and producer owned corporations and associations)

·         Eligible agricultural producer groups (e.g., trade associations)

·         Farmer or rancher cooperatives

·         Majority-controlled producer-based business ventures. 

·         Local and regional supply networks.  This is a new category for 2009.  The applicant must be either one of the organizations that is a member of the network who agrees to be the legal representative for the network and assume responsibility for the management of grant funds, if selected for funding, or the applicant must be a legal entity that is comprised of the business enterprises that are members of the network.  May only apply for "mid-tier value-chain projects."

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"Reserved" and "unreserved" funds

This is new for 2009.  Ten percent of available funds are reserved to fund applications submitted by “Beginning Farmers or Ranchers” and “Socially Disadvantaged Farmers or Ranchers.”   An additional ten percent of available funds are reserved to fund “Mid-Tier Value Chain projects.”  Collectively, this these two types are referred to as ‘‘reserved funds.’’

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Matching funds

Grant recipients must provide matching non-Federal funds at least equal to the amount of the grant received. These matching funds must be spent in the same ratio that they are provided (e.g., 1 to 1).  Matching funds can be cash, "in-kind" non-cash contributions, or a combination of both.  Matching funds may also be provided by third parties.  If you think meeting the matching fund requirement would be difficult for you, contact Morrison & Company for possible strategies.

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Evaluation process

USDA will conduct an initial screening of all submitted proposals to determine whether the applicant is eligible and whether the application is complete and sufficiently responsive to the requirements set forth in the NOSA.  Applications that pass the screening will be evaluated by other technical experts appointed by USDA.  The Administrator reserves the right to award additional points, as specified in the NOSA, to accomplish agency objectives.  State offices can do a non-binding review for eligibility only of applications submitted for that purpose by November 2, 2009.

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Where can I find the official NOSA (rules) and application guidance?

The 2009 NOSA is available here in a PDF file as a convenience.  Click here for the USDA's official website and links. 

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I have more questions

For a no-cost preliminary assessment, to learn more about our services, or to request information on grant programs, call Brent Morrison at 530 893-4764, ext. 202 or email bmorrison@morrisonco.net.  

The grant process and the related governmental regulations can be complex.  The VAPG program offers great rewards but the process is highly competitive.  All proposed projects have their strengths and weaknesses, as do the applying entities.  Our expertise is in helping our clients achieve every scoring point possible, highlighting strengths, and overcoming negatives as best possible. 

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