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An Analysis of the U.S. Department of Agriculture’s Value Added Producer Grant Program, 2002 to 2012


  • Schenheit, Nathaniel T.


In 2001, Congress passed legislation authorizing, and later appropriating funding for the Value-Added Producer Grants (VAPG) program. The objective of this thesis is to update a previous study of this program by Boland, Crespi and Oswald (2009) who used data through 2005. This paper follows that work on VAPG key success factors and likelihoods of success by updating the data through 2012. The United States Department of Agriculture (USDA) Rural Development division awarded $223,167,601 from 2002 through 2012 to qualified applicants of value-added agricultural products. The findings of this thesis showed that the dollar amount of the grant size had significant impacts on a VAPG recipient being successful or reaching step nine of the nine step business process. In addition, commodities such as corn, edible beans, fruit, small grains, sugar, wheat, wine, wind, and poultry were significant. Both Independent and Agricultural Producer Group organizations were found to have significant impacts on successfully reaching success. The newest addition to the VAPG programs allotments, Mid-Tier Value Chains, showed to have a positive and significant relationship to a producer obtaining the ninth step versus the standard differentiated producer. The program has allowed many producers to test the waters through educational promotions of locally grown, differentiated and segregated products. Greater success was found for recipients who were already producing a value-added product rather than starting from “scratch.”

Suggested Citation

  • Schenheit, Nathaniel T., 2013. "An Analysis of the U.S. Department of Agriculture’s Value Added Producer Grant Program, 2002 to 2012," Master's Theses and Plan B Papers 175015, University of Minnesota, Department of Applied Economics.
  • Handle: RePEc:ags:umapmt:175015
    DOI: 10.22004/ag.econ.175015

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    References listed on IDEAS

    1. Aldrich, Lorna M. & Kusmin, Lorin D., 1997. "Rural Economic Development: What Makes Rural Communities Grow?," Agricultural Information Bulletins 33677, United States Department of Agriculture, Economic Research Service.
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    Cited by:

    1. Stevenson, Marcie & Artz, Georgeanne, 2017. "Improving rural business development, one firm at a time: A look at the effects of the USDA’s Value-Added Producer Grant on firm survival," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252785, Southern Agricultural Economics Association.


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