Value Added Producer Grants (VAPG) are awarded by the United States Department of Agriculture (USDA). VAPG provides an outstanding opportunity for agricultural producers to receive funds to help them operate and grow their businesses.

If you are considering applying for a grant, you probably have many questions about how VAPG works. Below are short answers to questions we hear frequently at Elm Grove.

Q. If we are awarded a grant, will USDA send us a check for the whole amount?

A. No. You will operate your business as usual and submit proof, on a monthly or quarterly basis, that you have paid VAPG-eligible expenses. USDA will verify your expenses and reimburse you for the amount of expenses submitted each month or quarter. Businesses having large eligible expenses could receive their entire award with just a few requests; smaller business might receive their award over a period of one or more years.

Q. Is every business eligible for $250,000 of working capital?

A. No. To be eligible for the $250,000 maximum award, your value-added business must have at least $500,000 of eligible expenses. Eligible expenses can include the fair market value of your raw agricultural product, the cost of non-family labor, marketing expenses, utilities, distribution costs, and many other items. Farm production expenses are ineligible for VAPG reimbursement.

Q. I operate a rather small value-added business. Is a VAPG grant worth the hassle?

A. If your business is sufficiently complex, USDA allows grants up to 36 months in duration. In that way your small business may accumulate eligible expenses over a three-year time frame, thus increasing the amount of reimbursements you may receive.

Q. I’ve been farming for 20 years without a written business plan. Am I eligible for VAPG working capital funding?

A. Not without a written plan. USDA requires a written business plan be attached to your VAPG working capital application. Most businesses have the basic information required for a business plan in assorted documents, records, and financial statements. Elm Grove prepares your written business plan as part of its grant writing service.

Q. Is a new start-up business or new product eligible for VAPG?

A. Yes. New businesses operating for less than two years must attach an independently-developed Feasibility Study that has determined your business is reasonably positioned to succeed. In many cases, Elm Grove Enterprises can prepare your Feasibility Study or seek a VAPG Planning Grant to underwrite the cost if a different consultant is preferred.

Q. What are the critical VAPG dates?

A. USDA generally announces "open enrollment" for VAPG once every year. Once announced, applications are typically due within 60 days. Once the deadline has passed, the applications are reviewed for eligibility, scored, and ranked by their state Rural Development Office. An outside reviewer also scores the application, and an average score is calculated. The national Rural Development Office then reviews the state scoring, adds modifications if needed, and announces the successful awardees. The announcement of awards is typically four to five months following the application deadline.

Q. If we develop a $250,000 working capital grant, will USDA consider awarding us a smaller amount than we requested?

A. If your grant is selected for funding, USDA customarily awards the full amount requested.