Value-Added Producer Grants With Jim Gage

Misty Farmstead

In Edible-Alpha® podcast #30, Tera interviews Jim Gage of James D. Gage Consulting, a firm that helps value-added farms and other agriculture clients problem solve in critical business areas so that they can be financially viable. He first became interested in agriculture while volunteering in the Peace Corps, later supporting agricultural research and development as a grant writer and researcher for many years. This experience led him to work at the Dairy Business Innovation Center (DBIC) where he would later be the Director for three years, working with a team of consultants to help dairy entrepreneurs develop a non-commodity business game plan for innovative ideas in dairy.

His firm works as a value-added business strategist and creates a client-consultant relationship with entrepreneurs before writing a Value-Added Producer Grant (VAPG) for their business so that he can both write a better grant and provide more meaningful follow-up technical assistance to help them implement the grant. For example, he worked with the Kelly Country Creamery as part of DBIC, and then assisted them in getting both Planning and Working Capital grants to create an on-farm ice cream business. Getting those grants and the family’s dedication to quality encouraged people to come out to their rural Wisconsin location and enjoy their outstanding products. The creamery has become well-known in the area, and accolades include being named Good Morning America’s Ice Cream Parlor of The Year.

VAPGs include both Planning Grants (maximum: $75,000) and Working Capital Grants (maximum: $250,000). While the VAPG grant can be complicated (for example, a 75 page application plus Business Plan and third-party Feasibility Study), it requires applicants to critically consider expansion of the customer base and the marketplace for products as well as demonstrate how they will have sufficient business structures, profit and cash flow to operate in the long-term. The Planning Grant allows entrepreneurs to work with experts to do the business, marketing and financial due diligence they should do for their business over a year period before putting product on the shelves, which can sometimes change what the product is that the entrepreneur ends up pursuing. The Working Capital Grant is never the business’ main source of financing but incentivizes entrepreneurs to show prospects for expanded sales and future investment before applying.

Jim and Tera discussed that adding value-added as part of a farm’s business strategy is one of the key financial means to help farms transition to the next generation. However, there are still traditional agriculture lenders that do not fully understand how to underwrite the value-added component with the current farm financing. On-farm activities and sales can also benefit from the use of social media, especially if it drives consumers to a farm store or events and helps maximize a farmer’s margins. Jim and Tera also talked about Jim’s work with Small Business Innovation Research (SBIR) program and how technological innovations with assistance from an SBIR grant can help farm community develop innovative solutions to a range of farm business problems, including issues of climate variability.