FARMERS’ GUIDE TO APPLYING FOR THE VALUE-ADDED PRODUCER

National Sustainable Agriculture Coalitiongroups or businesses) to all farm co-ops and to all midtier value chains, regardless of their membership base.In ranking applications, USDA awards 5 points (out of 100total possible points) for applicants who are from one ormore of the priority categories. Up to 5 additional pointswill be awarded to group projects (majority-controlledproducer businesses, co-ops, producer groups) to createor expand opportunities for one or more of the prioritycategories. Targets and strengthens the profitability andcompetitiveness of small and medium-sized family farmsor ranches; andIncludes an agreement from an eligible agriculturalproducer group, farmer or rancher cooperative, ormajority controlled producer-based business venture thatis engaged in the value chain on a marketing strategy.In the event of a tie between two or more applicants, theAdministrator will have discretion in breaking ties.Producer-based food hubs that meet these qualificationsare eligible for VAPG awards as part of mid-tier value chainprojects.To qualify for priority points, an individual farmer applicantmust be the operator of a small or medium-sized familyfarm or be a beginning, socially disadvantaged, or veteranproducer. For group applicants, USDA currently requiresthat more than 50 percent of the members are operatorsof small or medium-sized family farms or are beginning,socially disadvantaged, or veteran producers.Applicant ownership of the raw agricultural commodity andvalue-added agricultural product from raw through valueadded stages is not necessarily required, as long as themid-tier value chain application can demonstrate an increasein customer base and an increase in revenue returns tothe applicant producers supplying the majority of the rawagricultural commodity for the project.(Editorial note – NSAC adamantly opposes the currentUSDA points, process, and thresholds for awardingpriority points and the end run USDA is doing aroundcongressional directives in the farm bill. We continuein our advocacy efforts to try to get this aspect of theprogram on track.)Funding Set-AsidesBy law, there are two 10 percent funding set-asidecategories, one for mid-tier value chain projects, and one forprojects submitted by beginning or socially disadvantagedfarmers or ranchers. The set-asides are intended to ensurethat these objectives are more likely to be supported.Mid-Tier Value ChainsMid-tier value chain projects have a special fundingset-aside (see below), and, as noted above, USDA hasdecided they also receive priority ranking points. Thedefinition of a value-added agricultural product includesan agricultural commodity or product that is aggregatedand marketed as a locally-produced agricultural foodproduct.The farm bill ends the set-aside on June 30 of each fiscalyear so that any funds that are not awarded within the setaside by that date can be put to use elsewhere.Mid-tier value chains assist farmers and ranchers who aretoo large or remote to substantially engage in marketingdirectly to consumers but too small to profitably engagein high volume, low margin raw commodity production.They are designed to capitalize on the increasing demandfor high quality products from family farms adhering tostrong environmental and social values.Farmers can be funded for the development of mid-tiervalue chains, which are defined as local and regionalsupply networks (including aggregators and facilitationservices) that link independent producers withbusinesses, cooperatives, or consumers that marketvalue-added agricultural products in a manner that:This year, however, USDA is releasing the request forapplications so late in the year that the application due datecomes at the same time as the deadline for making awardsunder the set-aside.

The delay by USDA has happened repeatedly inrecent years and is most unfortunate. Hopefully,in future years the funding availability notice willbe out in the winter, when farmers generallyhave more time to work on proposals, so thatdecisions can be made in advance of the June 30cut-off date.MANDATORY REGISTRATIONSBefore applying, VAPG applicants must obtain aDun and Bradstreet Data Universal NumberingSystem (DUNS) number. A DUNS number can beobtained at no cost by calling toll-free to 866-7055711.Applicants must also register in the System forAwards Management (SAM) prior to submittingthe application. To register, go to https://www.sam.gov/portal/public/SAM.Both are easy to obtain, but if you do not have aDUNS and a current SAM registration, you needto get started right away, as they take some timeto get.The process to apply for a DUNS takes about onebusiness day, and when you apply you will needto be able to provide contact information, thenumber of employees, the legal structure of youroperation, the year it was established, and theSIC code, which is a U.S. Department of Laborbusiness classification that can be looked uponline. When you have this information you canapply for a DUNS online at http://fedgov.dnb.com/webform.Next, after obtaining a DUNS number, you mustregister with SAM, which is a government-wideregistry for anyone doing business with thefederal government. You can begin the SAMprocess at www.sam.gov, and should have thefollowing information ready: your DUNS number,EIN number, statistical information about yourbusiness, and information for electronic transferof payments. You should plan ahead for theSAM application, because a newly assigned EINnumber can take up to 2 to 5 weeks before it isactive and valid for the SAM application.APPLICATION SCORINGApplications are awarded points based on sixscoring tiers. The maximum number of points is100. Complete descriptions are in the FederalRegister Notice.1. Nature of Proposed Venture (up to 30 Points)– Technical feasibility, economic sustainability,demonstration of the potential for expandingcustomer base, expected increase in revenuereturns, etc.2. Qualifications of Project Personnel (up to20 Points) – Credentials, education, experienceof each person working on the project. If usingconsultants, they do not necessarily need to beidentified beforehand, but the qualifications soughtshould be described.3. Commitments and Support (up to 10 Points)– Support from producers, end user buyers, andthird party contributors. Includes contracts, lettersof commitment, or letters of intent, if any. Cash andin-kind contributions detailed.4. Work Plan and Budget (up to 20 Points)– Detailed description of all tasks and who willaccomplish them. Budget should include detailedbreakdown of all estimated costs of projectactivities.5. Priority Points (0 or 5 Points for PriorityCategory Applicants; up to 5 AdditionalPoints for Qualified Group Applicant Types) –If the project if submitted by the operator of a smallor medium-sized family farm, or a beginning, sociallydisadvantaged, or veteran farmer or rancher, or ifthe proposal is from a farm co-op, or is a mid-tiervalue chain project, 5 points will be awarded. Forgroup projects, up to 2 points will be awarded ifthe group has 50% membership from the statutorypriority groups, 1 point if the group includes at leasttwo statutory priority groups among its members,and 2 points if the project will increase the group’smembership by at least one statutory prioritycategory. Only farm co-ops, producer groups, ormajority-controlled producer businesses are eligiblefor the full 10 points under this heading.6. Administrator Points (up to 10 points) – USDAmay award up to 10 points to an application toimprove the geographic diversity of awardees in afiscal year.

National Sustainable Agriculture Coalition2016 VAPG APPLICATION TIMELINE AND CHECKLIST1.Invitation for Applications for VAPG published in the Federal Register. (April 8, 2016)Read the complete Federal Register notice, but be forewarned it is written in bureaucratic language. Be sure to consultwith your state USDA Rural Development Office (see step 3) and with NGOs or consultants in your area familiar with theprogram.2.Applicants may use USDA’s application template (“Forms & Resources” tab under VAPG title).State economic development Extension specialists or NGOs with expertise may be able to provide assistance.3.Draft applications may be sent to RD-State Offices for preliminary review & comment.Applicants may request technical assistance from their state RD office prior to the application deadline. Take advantage oftheir assistance and be sure to get a preliminary review and comment on your draft application to avoid problems that mayotherwise void your final application.4.Applications are written and finalized.As noted previously, USDA offers a simplified application for working capital projects requesting less than 50,000. Ifthe applicant is not applying for a less than 50,000 working capital project using the simplified form, applicants seekingworking capital grants must also secure a business plan and independent feasibility study, which must accompany theapplication. These take time, so must be started immediately. Also note that these documents will not be provided to theproject reviewers and thus should be summarized in the text of the application as well as be attached.5.Application deadlines: June 24 and July 1, 2016.Applications cannot be faxed or emailed. You must (a) mail the complete application to the State RD Office located in theState where the project will primarily take place, postmarked by or sent overnight by July 1, (b) hand carry your applicationto a USDA RD field office by close of business on July 1, or (c) submit the application electronically through grants.gov bymidnight Eastern Time on June 24. NOTE THE EARLIER ONLINE DEADLINE. If you choose electronic submission, pleasenote that it is highly recommended that you (1) register beforehand to set up an account, and (2) try to file a few daysahead of time because grants.gov is notoriously difficult to deal with if rushing at the last minute.6.Proposals are reviewed for completeness and eligibility by RD-State offices.7.Proposals are scored by the State office.By getting a draft proposal pre-reviewed by the state office you will have a better sense of how your proposal will score,and if there are particular problems that might indicate a lower ranking there may be time to adjust the proposal to gain abetter ranking.8.Proposals are sent to the national office at USDA, which sends each proposal to at least oneindependent, non-federal reviewer to evalu

Ludwig Farmstead Creamery in Fithian, IL received a working-capital grant to assist production and marketing of their artisan cheeses made with milk from their Holstein herd. Ludwig Creamery markets most of their products direct to consumers through farmers markets, restaurants, retail outlets and wineries in Illinois and Indiana.