By TIM THORNBERRY
Kentucky Correspondent FRANKFORT, Ky. — The University of California’s Sustainable Agriculture Research and Education Program defines value-added as “a raw product grown by the farmer and modified, changed and/or enhanced in order to turn it into another product with a higher net worth.”
That idea is the same in Kentucky, and one that has especially been on the forefront of agriculture since the tobacco buyout in 2004.
As farmers have made their way from a tobacco-based farm economy into unknown diversification-based alternatives, there have been several tools for them to rely upon to ensure success.
One such tool has been the USDA Value Added Producer Grant (VAPG) program.
According to the USDA, the funds from the matching grant program may be used for planning activities and for working capital for marketing value-added agricultural products and for farm-based renewable energy.
Eligible applicants are independent producers, farmer and rancher cooperatives, agricultural producer groups and majority-controlled producer-based business ventures.
With the help of Kentucky’s USDA Rural Development office and the Kentucky Center for Agriculture and Rural Development (KCARD), producers interested in the value-added market are getting a helping hand in completing the application process.
“Many of the producers and agribusinesses that we work with fit the qualifications for the VAPG,” said Larry Snell, KCARD executive director. “We have had positive experiences working with VAPG applicants in the past, and we are excited to be working with the state Rural Development staff to identify applicants for the upcoming funding cycle.”
Dudley Tapp of Washington County is a prime example of a producer who knew it was time to make a change.
His dairy has been in the family for generations and Tapp wanted it to continue for himself and his children. But, the input costs dairy producers have faced lately have left many barely hanging on and others opting out of the business altogether.
With that in mind, Tapp decided an alternative route was in order and wanted to explore the likelihood of incorporating a value-added facility to the farm.
After learning of the VAPG program, he applied and received a grant for a feasibility study.
Dr. Tim Woods, an agricultural economist at the University of Kentucky College of Agriculture, helped him with that study.
“The Tapps are a very interesting project and a great example of why producers should consider the USDA VAPG program,” said Woods.
“They are a small family dairy operation looking to shift into a processing business, so with the funding from their grant we were able to thoroughly examine different product and processing options and to really look at what they would need to do from several angles, such as management, financial, resource, production and personnel.”
The study focused on several areas, including marketing, to find out just what is in demand, what operations and technology would be required and what would be needed economically and financially. Woods brought KCARD into the picture to help with those financial and management concerns.
“Management requirements for new ventures are often unappreciated,” said Woods, “The KCARD management audit provided a candid assessment of what resources existed for the Tapps, as well as what would be needed for each of the various scenarios they were considering.”
Woods also used the Kentucky Food Consumer Panel as a marketing tool to examine the potential for a wide variety of value-added products, including bottled milk, artisan cheeses and beer cheese. Even an agritourism idea emerged, relating to the Tapp farm’s location near the popular Kentucky Bourbon Trail.
Once completed, the study confirmed the existence of a strong demand for locally produced dairy products in the state. It also provided Tapp with a variety of avenues to explore in setting up his operation.
“The feasibility study and KCARD have given us ideas to get started on, even some things we hadn’t considered,” said Tapp. “The experience has helped us to open doors with the ultimate goal of having a facility on our own farm.”
In the past, state producers have not had a strong representation in the VAPG program, something Rural Development and KCARD would like to change by encouraging those producers to apply.
“Kentucky is in a unique position with the Kentucky Agriculture Development Fund, to have an in-state program that could be a potential match of cost-share funds that applicants are required to have in order to receive VAPG grant funds,” said Snell. “We are here to help producers look at all aspects of the application process, even potential sources for the cost-share funds.”
For more information and guidelines on the VAPG application, contact the USDA Rural Development Business Cooperative Division at 859-224-7435 or by e-mail at dean.tandy@ky.usda.gov
For more on KCARD’s business development services, visit www.kcard.info |
