What is Value-added Agriculture?
Before you start down the road to value-added agriculture, you should understand where the road will lead you. Value-added agriculture is a movement that has created a life of its own. It is an idea that has the potential to change production agriculture and rural America. However, we need to define What is Value-Added Agriculture? Generally there are five ways farmers have of adding value. For a more specific definition, we define value-added agriculture using USDA Definition.
However, to be successful in this movement we must look further into this concept of adding value. For example, there is a difference between capturing value and creating value. Regardless of whether you capture value or create value, the bottom line is that you get paid for providing value. If your business venture does not provide value to the system, there is no reason to expect a return. So the process of creating a successful business involves the search for providing value. Providing value can be in the form of marketing a unique product, filling a market niche, simplifying the supply chain, providing a service, lowering costs, and many other ways. The more value you provide, the more return you can extract from the marketplace.
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Value-added agriculture generally focuses on production or manufacturing processes, marketing or services that increase the value of primary agricultural commodities, perhaps by increasing appeal to the consumer and the consumer's willingness to pay a premium over similar but undifferentiated products. Usually, a value-added addition is a worthwhile investment because it generates higher return, allow penetration of a new, potentially high-value market, extend the production season, or perhaps create brand identity or develop brand loyalty.
Every five years or so the United States reconsiders its major food, farm and rural policies in a new “Farm Bill”. The Agricultural Act of 2014 (the current Farm Bill) funds farm programs through 2018. This omnibus bill is the primary agriculture-policy tool of the federal government and sets out much of the policy and spending priorities for the United States Department of Agriculture.
Since they began in 1933, farm bills have charted direction for community programs, international agricultural trade, rural-development and conservation programs. They also impact agricultural research, farm credit and food and nutrition programs. For these regions, in various ways they also strongly target, impact and guide American value-added agriculture.
One of the foremost vehicles for value-added agricultural development is the Value-added Producer Grant Program (VAPG). The VAPG was created by the Agricultural Risk protection Act of 2000 and coalesced into the legislation enacted in the 2002 Farm Bill (P.L. 107-171, Sec. 6401). With the Agricultural Act of 2014, $40 million per year is available through the VAPG program.
VAPG applications can be submitted by independent producers, farmer and rancher cooperatives, agricultural producer groups, and majority-controlled producer-based business ventures for the development and marketing of new or enhanced value-added agricultural products (including organic agricultural production). The program is administered by USDA-Rural Development.
A wealth of business development and other information is available at Value-added Agriculture Centers across the nation. A list of many of these centers follows:
Revised March, 2023.