Businesses
that receive Value-Added Producer Grants (VAPG) are less likely to fail
and are more likely to hire employees, according to a May 2018 U.S.
Department of Agriculture (USDA) Economic Research Service (ERS) report.
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| Cora Fox |
The
VAPG program, administered by the USDA, supports farmers and ranchers
who want to access value-added markets by offering funds for business
and marketing plan development; feasibility studies; and working capital
for processing costs, advertising, and some inventory and salary
expenses. Value-added goods can be fruit made into jam or milk made into
cheese, which both fetch a higher price than the base ingredients.
Taking
a look at 1,020 businesses, the USDA study found those supplemented
with VAPG dollars were 89 percent less likely to fail within two years
of receiving the grant, compared to nonrecipient businesses of the same
age and characteristics.
Additionally,
the research found VAPG-funded businesses are more likely to hire
employees. Between one and five years post-award, grant recipients
employed five to six additional employees, on average. Prior to
receiving funds, no significant difference in employment levels was
found.
Lastly,
the study found the success of a business correlated to the amount of
funding received. After two years, businesses awarded with more dollars
were less likely to fail. The increase also corresponded with job
creation, as those with higher funding allotments were more likely to
employ more workers.
The
results show VAPG is important. Businesses that receive funding invest
in their communities, support rural economies, and create jobs.
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