USDA Seeks Grant Applications to Help Agricultural Producers Increase Product Value

Ali-i Kula Lavender Farm
Contact: Amy M. Parr
(808) 541-2600 x133

Up to $44 million is available to farmers, ranchers and businesses looking to develop new bio-based products and expand markets through the USDA Value-Added Producer Grant program.

“The uniqueness of island life requires items not produced locally to be shipped to the region.  The Value-Added Producer Grant program is a great resource for our local agricultural producers looking to generate new products, increase product values and grow markets and customer bases,” said Chris Kanazawa, USDA Rural Development State Director for Hawaii and the Western Pacific.  “In addition to diversifying locally produced and grown products, economic opportunities for producers, their families and local communities increase.”

Value-Added Producer Grants may be used to develop new products and create additional uses for existing ones. Priority for these grants is given to veterans, members of socially disadvantaged groups, beginning farmers and ranchers, and operators of small- and medium-sized family farms and ranches. Additional priority is given to applicants who seek funding for projects that will create or increase marketing opportunities for these types of operators.

More information on how to apply is on page 20607 of the April 8 Federal Register. The deadline to submit paper applications is July 1, 2016. Electronic applications submitted through are due June 24, 2016. Additional information and assistance is available through local offices.

Since 2009, USDA has awarded 1,126 Value-Added Producer Grants totaling $144.7 million. USDA awarded 205 grants to beginning farmers and ranchers.

Value-Added Producer Grants are a key element of USDA's Know Your Farmer, Know Your Food initiative, which coordinates the Department's work to develop local and regional food systems. Secretary Vilsack describes the cultivation of local and regional food systems as one of the four pillars of rural economic development that impacts farm family income and strengthens local economies. Under Secretary Vilsack, USDA has supported providing consumers a stronger connection to their food with more than $1 billion in investments to over 40,000 local and regional food businesses and infrastructure projects since between 2009. Industry data estimates that U.S. local food sales totaled at least $12 billion in 2014, up from $5 billion in 2008. More information on how USDA investments are connecting producers with consumers and expanding rural economic opportunities is available in Chapter IV of USDA Results on Medium.

Two examples of Value-Added Producer Grant awards include:

  • Punachicks Farm in Keaau, Hawaii, received a $20,000 working capital grant used to pay labor and service costs for packaging, delivery, and direct sales of locally-grown, all-natural, pasture-raised poultry.  Monthly sales were projected to double.  Current production exceeded expectations with farm operation future plans to move from leased land to purchased property. 
  • Mauna Kea Tea in Honokaa, Hawaii, received a $27,750 working capital grant to expand marketing, create a brand identity and produce a new tea-in-bag product.  As a result, the wholesale customer base increased 50 percent with retail customers continuing to grow.

Congress increased funding for the Value-Added program in the 2014 Farm Bill. That law builds on historic economic gains in rural America over the past six years, while achieving meaningful reform and billions of dollars in savings for taxpayers.

Since 2009, USDA Rural Development has invested $11 billion to start or expand 103,000 rural businesses; helped 1.1 million rural residents buy homes; funded nearly 7,000 community facilities such as schools, public safety and health care facilities; financed 180,000 miles of electric transmission and distribution lines; and helped bring high-speed Internet access to nearly 6 million rural residents and businesses.

Last Modified: 04/28/2016