Value-Added Producer Grant FAQ - Center for Profitable ...
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Value-Added Producer Grant FAQ
VAPG Fre q ue ntly As ke d Que s tions
GENERAL ELIGIBILITY
Citize ns hip re q uire m e nt Does the applicant certify Applicant entities that are a Farme r
citize nship as an individual or Cooperative, Agricultural Producer
an entity? Group or a Majority-Controlled
Producer-Bas ed Business, may allow an
”authorize d represe ntative” to certify
U.S. citizenship for the applicant entity’s
member/owners.
DUNS re q uire m e nt If an applicant is an individual, Grants are not awarde d to individuals
why must they apply for a who are not associate d with an
DUNS number? organization or business. S o the
requirements for all applicants, including
sole proprie tors, are the same and all
must have a DUNS number.
Sys te m for Awa rd Ma na g e m e nt Must applicants provide S AM Applicants must provide a valid S AM
(SAM) re q uire m e nt registration at the time of registration or evide nce from SAM that
application? they have begun the registration
process. Registration must be complete d
before an award can be made.
Applicants wishing to submit an
ele ctronic application must have a valid
SAM registration to us e Grants.gov.
Rura l v. Urb a n If locally produced product The VAPG Program does not have a
from rural producers is rural re quireme nt, me aning that neither
processe d before sold in an the applicant, value-adde d activities, nor
urban are a, does processing markets have to be locate d in a rural
still qualify? are a.
APPLICANT ELIGIBILITY
De finition of Ag ric ultura l Can an absente e farm owner No. Per the definition of Agricultural
Prod uc e r qualify as an Agricultural Producer at 4284.902, an Agricultural
Producer? Producer is someone who produces an
agricultural commodity through
participation in “day-to-day labor,
management, and field ope rations.” An
abs entee owner would be unable to
participate in day-to-day labor and field
operations.
Fa rm or Ra nc h De finition Is applicant eligibility base d on Applicant eligibility is fundamentally
the de finition of IP and AP, or bas ed on the Independe nt Producer and
on the “Farm” de finition? Agricultural Producer definitions, rather
than the “Farm” definition. Producers
do not nee d to demonstrate $1,000
gross annual sales to be eligible to
apply. However, applicants applying for
reserved funds and/or priority points for
a Beginning Farmer or Rancher, Socially
FY 2021 1Value-Added Producer Grant FAQ
Disadvantage d Farmer or Rancher,
Farmer or Rancher Cooperative, or a
Small-Me dium Size d Farm or Ranch
must demonstrate a minimum $1,000 in
gross annual sales to qualify. In addition,
agricultural harvesters do not me et the
definition of a farm or ranch and
therefore must apply as Independent
Producers and are not eligible for
Reserved Funds or Priority Points as
Beginning or Socially-Disadvantaged
Farmers or Ranchers.
Be e f Prod uc e r Is a be ef produce r who buys They would be considered an
fee der calves at 400-600 lbs. agricultural producer as long as they are
and fe e ds them out to a buying fee der calves and finishing them
finished weight of 1000-1300 to a standard market weight, as well as
lbs. before processing the m maintaining ownership through
into bee f products, conside red slaughter. Simply purchasing finishe d
an agricultural producer for animals and delivering the m for
this grant? Or do they have to slaughter (order buying) does not qualify
raise the calves from birth? as an agricultural producer.
Contra c ting Out Prod uc tion Can the raw commodity be The producer-applicant must grow at
produce d under contract with least 51 percent of the raw commodity
another farm or does the ne ede d for the project on their own farm
producer actually have to (owne d or le ase d). Contracting
grow the crop? production to another producer is not
eligible.
Food Hub Elig ib ility Are Food Hubs eligible to Food Hubs may be eligible to apply if
apply? they can mee t all of the program
requirements, including qualifying as
one of the four producer-based applicant
types.
Ha rve s te r Op e ra tio ns What is an Inde pe nde nt An Inde pende nt Produce r Harvester is
Producer ‘Harvester? ’ an individual or entity that can docume nt
that it has a le gal right to access and
harvest the majority of a primary
Agricultural Commodity that will be use d
for the Value-Adde d Agricultural
Product. Individuals and entities that
merely glean, gather, or collect residual
commodities that result from an initial
harvesting or production of a primary
Agricultural Commodity are not
considered Harvesters and are not
eligible for this program.
Examples of agricultural commodities
subje ct harvester operations are timber,
commercial fishing and wild herb
gathering. Agricultural crops that are
FY 2021 2Value-Added Producer Grant FAQ
cultivate d are not subject to the
harvester de finition and re quireme nts.
Ha rve s te r Op e ra tio ns - In the context of fish/se afood, In the context of fishing, a ‘harvester’ is a
Fis h/Se a fo od what is the difference betwee n license d, commercial fishermen who
a harvester and a farmer? ‘harvests’ wild-caught fish from oceans
or rivers. Commercial fishe rmen do not
meet the definition of a farm or ranch,
and there fore are not eligible for priority
points as Beginning Farmers or
Ranchers, Socially Disadvantage d
Farmers or Ranchers, Small/Me dium
Family Farms, Farmer or Rancher
Cooperatives.
Aquaculture (including aquaponics,
mariculture, and algaculture) involves
cultivation of fish, shellfish and other
aquatic organisms in controlled settings
including ponds, tanks, rivers and
oceans. Operators of these facilities are
de eme d “farmers” and could be eligible
for priority points).
Ha rve s te r Op e ra tio ns -Tim b e r In the context of timber, what In the context of timber, a farmer would
is the differe nce be twe en a be one who raises and sells tre es on
harvester and a farme r? land owned or leas ed by the farmer.
That “farmer” must have followed a
forestry manageme nt plan as evidence
of “raising” the tre es (rathe r than simply
harvesting existing stands of unmanage d
tre es). A harvester is one who has rights
to harvest timber but does not “raise”
tre es.
A logge r does not me et the definition of
a farmer or rancher and the refore is not
eligible for priority points as Beginning
Farmers or Ranchers, Socially
Disadvantage d Farmers or Ranchers,
Small/Medium Family Farms, Farmer or
Rancher Cooperatives. Howeve r, a
farmer who cultivates the trees (forestry
management program) would be eligible
for priority points.
In cas es in which the applicant both
raises tre e on their own land and has
harvest rights for additional timber,
whethe r the applicant is de signate d a
“farmer” or a “harvester” for the
purpose of priority points will be
de termined by whether the majority of
FY 2021 3Value-Added Producer Grant FAQ
the raw commodity ne ede d for the
proje ct comes from the “farm” or from
harveste d tracts.
Non-Profits Are non-profit organizations Eligible non-profit organizations must
eligible applicants? meet the definition of Agricultural
Producer Group: “A non-profit
membership organization that
represe nts Inde pende nt Producers and
whose mission includes working on
be half of Inde pe ndent Producers and the
majority of whos e members hip and
board of directors is comprised of
Independent Producers.”
Non-profits are not eligible to apply as
Independent Producers be cause they do
not me et the part of the definition that
requires that they be “Individual
Agricultural Producers or e ntities that
are solely owne d and controlled by
Agricultural Producers.” Nonprofits do
not have owners as they are public
entities serving a public purpose.
Sta rt-up Fa rm ing Op e ra tions The de finition of Independe nt The position of the Agency is that the
Producer indicates that the applicant must ‘currently’ produce the
applicant must “produce and raw commodity at time of application,
own” a majority of the raw meaning that they must be in active
commodity to which value will production or betwe en se asons with a
be added. Can some one who commodity produced the previous
is starting a farming operation, season, at the time of application.
but has never produced the
commodity be an eligible
applicant?
Trib a l Elig ib ility Are tribes and tribal entities Tribes and tribal entities may be eligible
eligible to apply? if they can meet all the re quirements of
the program, including qualifying as one
of the four eligible applicant types. The
Age ncy has include d guidance for tribes
and tribal entities to assist in assessing
their eligibility for the program. The
guidance is containe d in Final Rule 7
CFR part 4284 subpart J and in the
application toolkits found on the VAPG
webpage.
PROJ ECT ELIGIBILITY
Exp a ns ion of c us tom e r b a s e What do you me an by Customer base is the number of
customer base and how is customers for an applicant’s product(s).
expansion of customer bas e Applicants must demonstrate an
demonstrate d? incre ase in their customer bas e as a
FY 2021 4Value-Added Producer Grant FAQ
result of proje ct. Expansion of customer
bas e can be demonstrated by providing
a baseline of curre nt customers for the
commodity or value-adde d product and
an estimate d target number of
customers that will result from the
proje ct.
Inc re a s e d Re ve n u e s How does an applicant The application must demonstrate that
demonstrate increas ed an incre ase d portion of the reve nue
reve nues returning to derived from the value-added process
producers? will be returned to the applicant’s
producers providing the majority of the
agricultural commodity for the proje ct.
The application should include a
bas eline of current revenue s from the
sale of the commodity or VA product,
and an estimate d target number of
incre ase d reve nues that will result from
the project.
Bus in e s s Pla n To apply for working capital Yes, the regulation re quires that the
funds, does the Business Plan Business Plan be complete d by a
have to be prepared by an Qualified Consultant. The definition in
inde pende nt third-party like the regulation identifies a Qualified
the Fe asibility Study? Consultant as an independent, third-
party, without a Conflict of Interest.
Se e policy stateme nt in RD Instruction
4284.922(b)(6) where this is state d.
PRODUCT ELIGIBILITY
Alg a e Is algae —for us e in a Yes, algae is an eligible bio-bas ed
renewable energy proje ct— commodity.
considered an agricultural
commodity for the purpose of
this grant?
Ana e r ob ic Dig e s te rs Must energy ge nerated by an Energy ge nerate d by an on-farm
on-farm anaerobic digester be digester under the renewable energy
utilized on the farm? product category can be us ed on the
farm and/or sold to the grid. In order to
demonstrate expanded cus tomer bas e,
on-farm generate d energy must be sold
off-farm and/or be us ed to produce
another value-adde d product on the
applicant’s farm or ranch, for which
incre ase d reve nue can be
demonstrate d.
Bottle d , p a s te urize d m ilk Is paste urize d and bottle d milk Yes, paste urizing and bottling milk and
a value-adde d product? may be eligible activities under either the
“change in physical state” or “locally
produce d food” categories. Note that
FY 2021 5Value-Added Producer Grant FAQ
this represe nts a revers al of past Age ncy
policy.
Ca ttle - Is backgrounding or It is the position of the Age ncy that
Ba c kg rou nd ing /Pre c o nd itioning pre conditioning cattle in backgrounding or pre conditioning
pre paration for the fe e dlot an animals (fee ding, he alth care,
eligible expe nse? acclimation in pre paration for a fee dlot
environment) are not eligible expe nses
be cause they are relate d to agricultural
production. Thes e expe nses are not
eligible, per 4284.926(l).
Chris tm a s Tre e s Are Christmas Trees an Unless Christmas trees can qualify
eligible proje ct? under the ‘produce d in a manner’
category, as organically-grown, for
example, they are not eligible for the
program. Wreaths made from tre e
branches are not eligible under ‘change
in ‘physical state’ be cause they are
basically the same as cut flowers, which
are s pe cifically prohibited in the program
regulation.
Ea rthworm s Are vermiculture - Earthworms are considere d an
vermicomposting proje cts ‘alternative livestock specie s’ and are an
eligible for VAPG? important part of sustainable agriculture
systems. Worm castings or vermi-
compost are recognize d by USDA as
agricultural by-products. Therefore
vermiculture proje cts are eligible for the
program if the applicant owns the
earthworms.
Ha y Is bale d hay an eligible value- Conventionally produced and bale d hay
added product? is not an eligible product. However,
organically produced hay could be an
eligible product, as could hay that is
pellete d or otherwise transforme d into
something other than baled hay.
Ind us tria l He m p Is industrial hemp eligible for VAPG applications proposing projects
the program? relate d to Hemp will be considere d for
funding if the proje ct me ets all program
eligibility requirements, including
currently producing Hemp with a valid
producer licens e. Applicants must
provide a valid producer license issue d
by a S tate, Tribe, or USDA, as applicable
in accordance with 7 CFR part 990.
Ma n ure Colle c tion If an applicant wants to collect On-farm ge nerated manure is an eligible
manure for a composting or by-product of the farm that cultivates the
energy proje ct, what is the animals that produce the manure. The
FY 2021 6Value-Added Producer Grant FAQ
difference betwe en a manure is de eme d a “residual”
harvester and a farme r? agricultural commodity. Farmer v.
Harvester eligibility: Harvesters must
harvest the primary agricultural
commodity and not merely colle ct
“residual” commodities that result from
an initial harvesting or production of a
primary agricultural commodity. J ust
like food processors may not merely
colle ct produce from farme rs and the n
process it into various foods; manure
colle ctors may not merely collect
manure from farmers and then process it
into e nergy. Note that Agricultural
Producers may apply for funding as
farmers to utilize their manure for energy
proje cts; but colle ctors of farmer’s
manure may NOT apply to the program.
Multip le Com m od ity Own e rs hip If an applicant is marketing a The position of the Agency is that the
mixed produce box to applicant must produce more than 50
consumers, do the farmer percent of e ach of the items name as a
share holders have to provide subje ct commodity for the proje ct.
more than 50 percent of every Additional items that can be shown to
single item in the box ne ed? add value (through a broader product
line or varie d selection as demonstrated
by increas ed customer bas e and
reve nue re turne d to producers) AND are
a result of one or more of the five value -
added methodologies can be source d
from non-applicant third-parties.
Ra w Milk Is raw milk an eligible value - Yes, but only if project activities related
added product? to the unpaste urize d fluid milk or
unpasteurized milk product does not
conflict with applicable State or local
government statutes, administrative
regulations or policies regarding the
production, processing, handling,
distribution and/or sales of raw fluid milk
or milk products.
Elig ib le Ta s ks & Us e of Fund s
Ap p lic a nt-owne d , s e p a ra te If an applicant owns a It is allowable for the producer to
e ntity p roc e s s ing processing facility that is a process utilizing their own facility.
separate le gal e ntity from the However, grant funds cannot be use d to:
agricultural production entity, pay for goods and services from an
can the applicant use grant entity that employs the applicant owner
funds to pay for processing or immediate family membe r
expens es? (4284.926(n) or otherwise compe nsate
the applicant or family member for any
role they may play in the processing
FY 2021 7Value-Added Producer Grant FAQ
facility; purchase raw commodity from
the producer e ntity (4284.926(o).
Applicant or family member time on
eligible proje ct tasks could be use d as
in-kind match amounting to no more
than 25 percent of total project costs.
Ap p lic a nt Tim e Can grant funds be us ed to No, grant funds cannot be used to pay
pay for the time applicants applicants or their family members for
contribute to their proje ct? their time of the proje ct (services).
However, a limite d amount of applicant
or applicant family member time can be
contribute d as in-kind match. Se e
4284.923(a) and (b).
Bra nd e d Me rc ha nd is e Is the cost of brande d Brande d merchandise (for resale or give
merchandise as a promotional away) is not an eligible promotional
expens e an eligible expens e? expens e per 2 CFR 200.421(e)(3). This
does not include product-re late d
literature. Limite d expenditures for staff
uniforms is permitted.
Ca te ring Cos ts Are the costs of cate ring for a Only the cost of pre paring samples of
marketing eve nt eligible? the value-added product is eligible. Any
other relate d catering costs are
considered ‘entertainme nt’ and are not
eligible.
Cla s s e s , Ed uc a tiona l Are costs associated with No, these costs are not eligible as 2 CFR
Exp e rie nc e s classes or other e ducational 200.472 limits educational activities to
experie nces for customers employe e development.
eligible?
Com m e rc ia l Kitc he n Can VAPG funds be us ed to Acquisition, construction, or renovation
build a commercial kitche n? of facilities are not eligible VAPG
expens es.
Coop e ra tive Purc ha s e of Can a cooperative use grant Cooperative applicants cannot us e grant
Inve ntor y from Me m b e rs funds to purchas e raw funds to purchas e raw commodity from
commodity from members? members per the program regulation at
4284.926. However, the cooperative’s
purchase of inventory from members is
an eligible in-kind match, if value d fairly.
Cos ts inc urre d for ta s ks Can a recipient incur costs for No. Costs may be incurre d only for tasks
b e yo nd th e e nd of g ra nt p e riod tasks that are to be completed to be complete d during the grant period,
after the e nd of the grant per the approve d work plan/budge t
period? timeframe. S ee Se ction II.A.1 (d) of the
Financial Assistance Agre e ment:
“Revisions of the Work Plan and Budget.
You must complete all elements
of the Work Plan in Attachment B in
accordance with that Attachment and
FY 2021 8Value-Added Producer Grant FAQ
must use proje ct funds only for the
purposes and activities spe cified in
Attachme nt B - Approved Work Plan and
Budge t. You must further complete the
outcomes shown for e ach Work Plan
items within the time and s cope
constraints shown in Attachment B.”
Cos ts for Ce rtific a tions Are the costs for obtaining It de pends on the type and purpose of
various product, operational, the ce rtification. Obtaining certifications
or management certifications relate d to the production of the
considered eligible expens es? agricultural commodity (organic, GMO-
fre e, etc.) are not eligible, although for
planning grant purposes, including the
feasibility of obtaining thos e
certifications could be include d in
feasibility studies etc. Food safety
certifications relate d dire ctly to the
processing of the value-added product
are eligible. ‘Quality management’
certifications such as IS O are not
eligible.
Cos ts to Me e t Re g ula tory If nutritional labeling and Yes, if mee ting regulatory requirements
Re q uir e m e nts complete shelf-life studies are relate d to the processing, marketing, or
require d for, say, a chees e- distribution of the product are necessary
maker, to ship product out of to the performance of the award, they
state, are these costs eligible are eligible working capital expens es.
expens es under VAPG?
Cos ts of Inte lle c tua l Prop e rty Are costs related to The Cost Principles at 2 CFR 200.448
(Pa te nts , Tra d e m a rks , trademarking or copyrighting indicate that costs relate d to intelle ctual
Cop yrig hts ) promotional or other material property are allowable only if required
eligible in VAPG? by the Fe deral award. VAPG has no
such requirement, so these costs are not
eligible.
Cre d it Ca rd Tra ns a c tion Fe e s Are fe es charged to ve ndors Yes, credit card trans action fees are a
for cre dit card sales component of ‘cost of goods sold’ and
trans actions an eligible are an allowable working capital
working capital expens e? expens e. They can be reimburse d with
grant funds, or they can be de ducte d
from Program Income; but not both.
Care should be take n that only those
fees associate d with the sale of the
subje ct value adde d product are
expens ed against the grant.
Elig ib le Exp e ns e s for Foo d What are some examples of Food hubs could use VAPG funds for
Hub s eligible expe nses for Food planning purposes, i.e. fe asibility studies,
Hubs? marketing or business plans relate d to
the processing and/or marketing of
value-adde d products. Working capital
FY 2021 9Value-Added Producer Grant FAQ
funds could be us ed to pay for
processing or packaging expe nses;
marketing and promotion, and some
administrative expe nses (accounting
software, for example). Production
relate d expe nses including production
planning and coordination are not
eligible expe nses.
Eq uip m e nt The program regulation says There is no definition for ‘fixed
that ‘fixe d equipme nt’ is not an equipme nt in either the program
eligible cost. Does that me an regulation or in fe deral grant guidance (2
all equipme nt is ineligible? CFR 200). The Cost Principles in2 CFR
200.33, indicate that ‘equipment’ refers
to an asset with a value of $5,000 or
more AND a useful life of more than one
year. Use of grant funds to purchase
equipme nt me eting this definition is not
eligible.
However, ““supplies” means all tangible
personal property other than thos e
des cribed in §200.33” (including
computers) if the acquisition cost is less
than $5,000, regardless of the le ngth of
its useful life. Therefore, “supplies” may
include a wide range of ite ms from
packaging materials and office supplies
to some computers and small-scale food
processing items. Note : Divid ing
c om p on e nts of a s ing le p ie c e of
e q uip m e n t into s m a ll c om p on e nts for
the p urp os e of c irc um ve n ting the
$5,000 thr e s hold is not a llowa b le .
For more spe cific information re garding
‘equipme nt,’ see 2 CFR 200.439. Costs
incurred for materials and s upplies
ne cessary to carry out the performance
of the award are allowable working
capital expenses.
Eq uip m e nt Ma inte na nc e If the applicant owns/re nts the Routine maintenance to ke ep the
equipme nt already, are equipme nt in working condition is
equipme nt mainte nance costs allowe d. It does not allow repairs which
eligible? exte nd the useful life or e nhances the
value of the asse t.
• No repair of equipme nt
• No spare parts for e quipme nt
• Labor costs to operate the
proje ct-relate d e quipment or to clean-up
after an eligible value-adde d processing
activity is eligible.
FY 2021 10Value-Added Producer Grant FAQ
Exp orting For a working capital grant, is Yes, some exporting expenses are
exporting the new product an eligible emerging market or expansion
eligible marke ting expense ? activities.
Fre e zing a nd Ca n ning Are flash fre ezing and canning Flash fre e zing (including IQF) and
considered a post-harvest canning are considere d food processing
pres ervation processes? activities and are eligible program
activities under the “change in physical
state” category. Note that this
represe nts a reve rsal of past Age ncy
policy for IQF.
Inc orp ora tio n Cos ts Are costs for an applicant to Organization costs, per 2 CFR 230.455
incorporate their business an and 48 CFR 31.2 are not allowable costs.
eligible expe nse? For planning grants, some limited
expens es relate d to legal or tax
consultations on the type of organization
to form may be allowable.
In addition, steering committe e
applicants must have forme d a le gal
entity prior to exe cution of a grant
agre ement. Expenses incurred prior to
the be ginning of the grant period are not
reimburs able.
Inte rn e t Sa le s a nd Loc a l Food Can an applicant applying for Records and re porting for the proje ct
a working capital grant for a would ne ed to demonstrate that the
locally-produce d agricultural volume of agricultural commodity
food product market and se ll propose d for the working capital project
their product over the was actually markete d and distributed
Interne t? If so, how do we within the ge ographic limitations for
ensure the geographic “Locally Produce d Foods.” This quantity
restrictions are met? must include the quantity propos ed by
both the applicant’s producers (51
percent or more) plus any additional
quantity provided by third-party sources
(up to 49 perce nt), as applicable.
Ways to docume nt local sales:
Track the percentage of Internet sales to
customers in the local area,
reimburs ement amounts should refle ct
that percentage of local sales achieved.
Include a tracking device on the we bsite
to monitor “hits” or “sales” from
applicable zip codes within the de fine d
local are a.
Lia b ility Ins ura nc e Can grant funds be us ed to The cost of product liability insurance is
pay for liability insurance? allowable only for the proje ct-specific
product and only for the le ngth of the
grant period.
FY 2021 11Value-Added Producer Grant FAQ
Personal liability insurance and policies
covering facilities are not allowable.
Pa c ka g ing /La b e l De s ig n Can the design of labels and No, these activities are considere d to be
product packaging be part of the planning proces s.
include d in a working capital
grant?
Proc e s s ing Cos ts Is paying a third-party Yes, grant funds may be us ed for this
processor to co-pack or toll- purpose.
process the value-adde d
product an eligible use of
grant funds?
Proc e s s ing Cos ts of Ad d itiona l Can additional product be Use of funds to process additional
Com m od ity added for processing? product that is more than the amount
propose d in the grant application (51
percent) applicant + 49 perce nt third-
party raw commodity) for the VAPG
proje ct, or that is unrelated to the proje ct
is not an eligible cost.
Processing additional product that is
separate from and not related to the
subje ct value-adde d product is not an
eligible cost and would require a pro-
rated expens e of the rente d facility or
equipme nt.
Re c ip e De ve lop m e nt Can grant funds by used to Yes, but re cipe developme nt is only
pay to develop recipes for the eligible for planning grants. Working
propose d value-adde d capital proje cts should alre ady have
product. finalize d re cipes in place.
Sig na g e Can grant funds be us ed to Yes, signs can be purchas e d as long as
purchase exterior signs? there are not “e quipme nt” components
with individual costs of more than $5,000
and a us eful life of more than one year.
Short-te r m Re nta ls of Can a farmer rent or le ase a Short-term le ase or re ntal of a
Eq uip m e nt or Fa c ility processing facility or processing facility or e quipment is
equipme nt for a value-adde d allowable only for eligible processing
product? activities propose d in the application and
only for the amount of product propos ed
in the application. Grant funds cannot
be use d for le ase or rental payme nts
incurred prior to or exte nding beyond
the approve d grant period. Capital
leases or le ase-purchase arrangeme nts
are not allowable.
FY 2021 12Value-Added Producer Grant FAQ
Slotting Fe e s & Tra d e Are discounts to retailers in One-time slotting fees to re tailers to
Dis c ounts return for carrying a value- facilitate stocking the product are
added product, an eligible eligible as long as the terms of the
expens e? contract are disclose d. Ongoing price
discounts from the supplier to a
wholesaler or retailer are not eligible
proje ct expens e.
Tra ve l Cos ts Are travel costs incurred by a Grant funds may be use d to pay travel
member of an applicant e ntity costs for travel ne cessary for the
doing marketing work an performance of the award. Foreign
eligible cost? travel requires the prior approval of the
Age ncy for e ach se parate foreign
trip. Se e 2 CFR 230 (51 Travel) Cost
Principles—applies to nonprofits and
commercial applicants.
Ve hic le Re nta l Can grant funds be us ed to Grant funds cannot be use d to purchase
purchase or rent vehicles? vehicles, per 4284.926(e). Grant funds
can be use d to re nt (not capital le ases or
lease purchase) ve hicles to deliver
value-adde d product to buyers. Other
uses of the ve hicle must be pro-rate d
from the grant-related portion.
Wool Sc ouring a nd Ca rd ing Do wool scouring and carding Standard wool cle aning/carding
qualify as value-adde d processes do not are eligible under any
expens es? of the 5 value-adde d me thodologies.
However, non-standard processes may
be eligible under the category
“produce d in a manner that enhances
the value …”
MATCHING FUNDS
Ap p lic a nt tim e a s m a tc h Can the applicant contribute Applicants and applicant family
the value of their time spent members can contribute a limited
working on the project as in- amount of the fairly-value d time on the
kind match? proje ct as applicant in-kind match. This
contribution may amount to no more
than 25 percent of total project costs.
Se e 4284.923(a) and (b) for additional
guidance.
Ca s h v. In-kind Ma tc h What is the difference Cash match me ans actual funds
be twe en cash and in-kind available from the applicant or a third
match? party to pay for eligible project
expens es. Cash may be in the form of
actual cash, loan or line of cre dit, as
demonstrate d and verifie d by re quire d
documentation from a financial
institution.
FY 2021 13Value-Added Producer Grant FAQ
In-kind contributions are eligible, fairly-
value d goods and s ervices from the
applicant or third party provide d for
eligible proje ct purposes. These are
goods and services for which the
applicant or third-party contributor have
no out-of-pocket expense.
Note that cash contributions will result in
higher scores than in-kind contribution
during the application s coring process.
In-la ws a s ‘im m e d ia te fa m ily’ Do an applicant’s in-laws Yes, close in-laws (father, mothe r, sister,
re g a rd ing a p p lic a nt tim e a s contributions to a proje ct brother) fall under the ‘related by blood
m a tc h count against the 25 perce nt or marriage’ part of the definition:
limitation on applicant/family
member time as in-kind “Individuals who are clos ely related by
match? blood, marriage, or adoption, or live
within the same hous ehold, such as a
spouse, domestic partner, parent, child,
brother, sister, aunt, uncle, grandparent,
grandchild, nie ce, or nephe w.”
Inve ntor y a s m a tc h Can the raw commodity be Yes, the value of raw commodity
used as match? produce d and owne d by the applicant
can be use d as an applicant in-kind
matching contribution for working capital
proje cts provide d that it is fairly valued
and that the basis for the valuation is
given in the application.
Inventory is not appropriate for Planning
grants be cause this type of grant does
not involve utilization of the commodity
in the course of the grant period.
Fe d e ra l loa ns a s m a tc h Can proce eds from Fe de ral In general, fe deral loans can be use d as
loans such as FSA loans be match as long as they lose their identity
used as matching funds? as fe deral funds when they reach the
borrower and if there are no restrictions
on the use of those funds. Other federal
funds, such as grants, cannot be use d as
match.
Sub s titute In-kind for Ca s h After an award is made, can a No. As part of the competitive scoring
grante e substitute in-kind process, applications having verified
match for cash? cash match were awarde d more points
than thos e with in-kind. S ubstitution of
in-kind for cash would invalidate the
process.
Prog ra m Inc om e a s Ma tc h Can estimate d program No. Although program income e arned
income be propose d as during the grant period can be us ed to
finance or re place verifie d matching
FY 2021 14Value-Added Producer Grant FAQ
matching funds at the time of funds, it cannot be claime d at time of
application? application be cause it cannot be verifie d.
Sta te ta x c re d its a s m a tc h Can transferrable S tate tax No, transferable state tax credits cannot
cre dits be use d as matching be use d as matching funds. Tax credits
funds? are sold for less than face value,
therefore their actual value is not known
until the time of sale. In addition, some
tax cre dits can be rescinde d by the
states in which they are issue d.
PRIORITY POINTS / RESERVED FUNDS
Multip le c a te g orie s If applicant me ets more than No, qualifying applicants may re ceive
one cate gory for priority points points for only one category.
(e.g. socially disadvantage and
farmer cooperative) will that
get more points?
Soc ia lly Dis a d va nta g e d Fa rm e r If a farm is owned by 2 women In the event there are multiple farmer
or Ra nc h e r—Pe rc e nt of and 1 male, do they qualify as owners of the applicant organization, at
own e rs hip a socially disadvantage d least 51 percent of the ownership
farmer becaus e they are (shares) of the operation must be held
owned by a majority of by members of the socially
women, eve n if the 1 male disadvantaged group to qualify for
owns 60 percent of the farm? Priority Points, so in the example given,
the applicants would not qualify as
socially disadvantage d. To qualify for
Reserved Funds, 100 perce nt of the
owners must be members of a socially
disadvantaged group.
Soc ia lly Dis a d va nta g e d Fa rm e r If a hus band and wife each Yes, becaus e ownership of the farm is
or Ra nc h e r—Pe rc e nt of own 50 percent of the farm 100 percent owned by socially-
own e rs hip & m ultip le c a te g ory and the hus band is Latino, do disadvantaged farmers, the y qualify for
they qualify for priority points both priority points and reserve d funds.
as socially-disadvantaged
farmers bas ed on gender and
ethnicity?
Sm a ll or Me d ium Fa m ily Fa rm An agricultural producer is a The small/me dium Family Farm priority
large dairy farmer with gross points are bas ed on annual gross sales
reve nues in excess of in the previous three years. Owners are
$1m/year. They also are s mall 100 percent identical for the dairy and
producers of vegetables and produce entities. They have only
fruit. They are in the proce ss recently reconfigure d the produce part
of putting in an application for of the business into a new LLC. They
a VAPG solely for the are the s ame farm and farm owne rs and
vege tables and fruit. They would ne ed to acknowle dge ALL farm
have set up a ne w LLC for this income, including dairy. Thus, they are
business, although in the past not eligible for Small/Me dium Family
the fruit and vege table income Farm Priority Points.
was mixed into their total
income. For the purposes of
FY 2021 15Value-Added Producer Grant FAQ
this grant are they
small/medium sized
farmers? The same owners
exist for e ach company.
Ha rve s te r Are harvester operations It is the Agency’s position that
eligible for Priority Points or harvesters do not me et the definition
Reserved Funds? requirements for a farm or ranch.
Harvester applicants are not eligible to
receive Priority Points for as, Farmer or
Rancher Cooperatives or S mall/Me dium
Family Farms. Harvester applicants may
apply for Mid-Tier Value Chain Priority
Points, as applicable.
Likewise, Harvester applicants may not
apply for Res erve d Funds for Beginning
or Socially- Disadvantaged Farmers or
Ranchers, but may apply for Mid-Tier
Value Chain Res erve d Funds, as
applicable.
APPLICATION PROCESSING
AD3030 Do all types of applicant The AD3030 form applies only to
entities have to file an corporations, i.e., thos e who file articles
AD3030? of incorporation in the state in which
they do business. Entities such as LLCs
do not file articles of incorporation, and
so are not require d to fill out the
AD3030.
Sys te m for Awa rd Ma na g e m e nt How does a State Office Fe deral agencies may se arch the SAM
(SAM) Re g is tra tion confirm an applicant’s SAM databas e from any valid .gov, .mil, or
Re q uir e m e nt active status? fed.us domain. To confirm active status,
go to www.s am.gov and click on
“Se arch.” On the s earch page, enter the
DUNS number and click on Se arch. If
the entity is registere d, the Cage Code
and Expiration Date will appear.
Applicants who do not have a Cage
Code at application, must provide
evidence that they have be gun the
process and submitte d the require d
information to SAM.
Ele c tronic Sig na tur e s Can applicants use an Electronic signatures for applications
‘electronic signature’ rather submitte d via grants.gov are allowed.
than a written signature? However, upon award, documents from
ALL awarde es should be updated with a
written signature.
FY 2021 16Value-Added Producer Grant FAQ
Inform a tio n Re c e ive d a fte r the Can an applicant submit or a Additional information cannot be
De a d line State Office solicit additional solicited or acce pted after the
application information afte r application de adline.
the application de adline?
Fid e lity Bo nd s Must grante es get a fidelity Deciding on the amount of the bond is
bond, and if so, for what within the authority of the S tate Office
amount? that is monitoring the grant.
Considerations for deciding the amount
of the bond include the size of the grant,
the payment method, the financial
controls of the grante e, and any other
management abilities of the grante e that
could put Federal funds at risk.
In general, we recommend that
• Any grant over $50,000 has
some level of bond re quire ment;
• Any grant being paid in advance
has a bond amount e qual to the
entire amount of the grant;
• Any grant awarded to an e ntity
that has neve r had a Federal
grant have some level of bond
requirement; and
• Any grant awarded to a grante e
that does not me et the
standards outlined in 3019 for
financial and personnel
management practices has
some bond amount require d.
To determine the amount of the bond, a
good rule of thumb is that the bond
amount should e qual the maximum
amount of expenditures that will be
incurred for a given time pe riod. For
example, if you expe ct re quests for
reimburs ement to occur on a quarterly
basis, the n 25 percent of the grant
amount might be appropriate. The key
is to remember that the purpose of the
bond is to protect the government’s
interest in the grant, so the greater the
risk to the government (higher the grant
amount, we ak financial controls of the
grante e, etc.) the clos er the bond
amount should be to the full amount of
the grant.
AWARD PROCESSING
Pe rform a nc e Pe riod How do I corre ctly determine The pe rformance period start date
the pe rformance pe riod start provide d by the applicant s hould be
date for a VAPG award? adjuste d to the actual date of award —
FY 2021 17Value-Added Producer Grant FAQ
the date the financial assistance
agre ement is execute d by the Age ncy.
The grant period end date should also
be adjuste d accordingly. The grant
recipient should provide a revised
budge t with the adjuste d start and end
dates. Proje ct activities should begin
within 90 days of the date of award.
FY 2021 18You can also read
