Seven Kansas-based businesses recently received nearly $400,000 in assistance to help with expanding their operations by adding value to their agricultural-based products. The funding is being provided through U.S. Department of Agriculture Rural Development’s Value-Added Producer Grant (VAPG) program.
USDA Rural Development State Director Patty Clark made the announcement while visiting AgMark in Beloit, Kansas, a recipient of one of the grants.
The VAPG program helps agricultural producers grow their businesses by turning raw commodities into value-added products, expanding marketing opportunities and developing new uses for existing products.
AgMark, LLC will be using its $75,000 Value-Added Producer Grant to develop a business and marketing plan for creating value-added products from grain sorghum. The company is exploring the prospect of producing renewable chemicals and high protein animal feed products from grain sorghum.
The company is comprised of three cooperatives (Cloud County, Farmway and Randall Farmers) and hopes to create an opportunity that expands the revenues and market for the grain sorghum produced by its members.
“USDA’s Value-Added Producer Grants help provide financial capital to small businesses and agricultural producers in rural areas that are looking to expand or create a new value-added agricultural product,” said Clark. “The investment made by the federal government is helping to create new products and jobs in small towns across the state.
“Taking raw commodities and turning them into useful products like ethanol or co-products like animal feed or human feed is a key way to the future prosperity of local communities.”
In discussing the grant, Jeff Bechard, AgMark president, said it was typical of the kind of people who live in the area, since they are innovative and want to work together to make their area successful.
“I have to give a lot of credit to the people in the communities we serve,” Bechard said. “The cities of Concordia, Clay Center and Beloit have within their areas some of the most progressive and innovative around in terms of how they operate their farm businesses. It spills back over into the cooperatives and their communities.
“We have strong local, county and regional economic development and planning groups that are always there in helping us develop projects like this and looking for financing. They’re out to use all the opportunities we can get our hands on to develop our ideas.”
It also helps to know that development specialists in the area understand that agriculture remains the central economic focus of their communities, Bechard said.
“They understand that agriculture is what keeps Main Street alive,” Bechard said. “There are services and manufacturers that tie into that, but we are a production ag community. Our banks understand that, so we all try to leverage that understanding.
“We also know how to tie into our transportation resources, like railroads. We have two Class I railroads in the area, several short lines, too. We try and take advantage of that and we will be looking at how best to use our infrastructure resources, both highways and railroads, as we determine where we’ll be locating this particular facility.”
Besides AgMark, LLC, six other Kansas companies were awarded 2014 USDA Rural Development Value-Added Producer Grants:
—Agriculture Mechanization Co., Belleville, $30,000 to determine the feasibility of producing flour from wheat and sorghum to be marketed as a locally produced food product.
—B’s CVF, Inc, Garnett, $49,947 to expand the company’s product line to offer various cuts of poultry.
—Gary’s Berries, Grantville, $44,700 to increase sales of pumpkin squash and pumpkin donuts.
—Jason Wiebe, Wiebe Dairy, Durham, $120,000 to expand Wiebe Dairy’s production of farmstead cheeses.
—Schenker Family Farms, McCune, $40,000 to expand the farms beef, pork and poultry product lines.
—Wine Barn, LLC, Kansas City, $24,750 to assist with marketing the company’s wine to tourist visiting the greater Kansas City area.
“Over the years, Kansas has been somewhere in the middle or somewhat below the middle in rank of accessing this program at the national level,” Clark said. “With the aid of (state staff) and their guidance and leadership, we’ve managed to turn that on its head in this competitive application process, and it allowed us to do well in receiving grants across the state. We applied for seven grants and won all seven of them for the first time across the state.”
Value-Added Producer Grants are an element of USDA’s Know Your Farmer, Know Your Food initiative, which coordinates USDA’s work to support local and regional food systems. Previous Value-Added Producer Grants supporting local and regional projects are mapped on the Know Your Farmer, Know Your Food compass.
Since 2009, USDA has awarded 863 Value-Added Producer Grants totaling $108 million. Twenty percent of the grants and 16 percent of total funding has been awarded to beginning farmers and ranchers. The 2014 farm bill increases mandatory funding for the program from $15 million to $63 million over five years (while also reauthorizing an additional $40 million in discretionary funding).
The grants can be used for a wide range of purposes. They can support local and regional food systems, further the development of the growing bioeconomy and finance the distribution of local and regional products.
“AgMark is a combination of three different farmer cooperatives working together for regional benefit,” Clark said. “It will continue to take a cooperative, regional effort to pull off business projects like this, whether it’s in the agricultural industry, the manufacturing industry or any other industry. You guys at AgMark are a shining example of that kind of effort.”
USDA, through its Rural Development mission area, has a total active portfolio of more than $199.3 billion in loans and loan guarantees. These programs are designed to improve the economic stability of rural communities, businesses, residents, farmers and ranchers and improve the quality of life in rural America.
The 2014 farm bill made the announcement of the funding possible. The farm bill builds on historic economic gains in rural America over the past five years, while achieving meaningful reform and billions of dollars in savings for taxpayers.
Since enactment, USDA has made significant progress to implement each provision of this critical legislation, including providing disaster relief to farmers and ranchers; strengthening risk management tools; expanding access to rural credit; and funding critical research.
The farm bill, USDA officials say, also works in establishing innovative public-private conservation partnerships; developing new markets for rural-made products; and investing in infrastructure, housing and community facilities to help improve the quality of life in rural America.
“We’ve developed a process where our grants score well and compete on the national level,” Clark said. “Usually Iowa is top recipient of these grants. We received as many grants in this round as Iowa did. We can be very proud of that.”
Larry Dreiling can be reached by phone at 785-628-1117 or by email at firstname.lastname@example.org.