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Specialty Agriculture in Virginia A Growth Opportunity Charles R. Green, Virginia Department of Agriculture & Consumer Service Specialty Agriculture Non- traditional agribusiness products, including commodity items not traditional to Virginia Value-added agribusiness products or processes

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specialty agriculture in virginia
Specialty Agriculture in Virginia

A Growth Opportunity

Charles R. Green, Virginia Department of Agriculture & Consumer Service

specialty agriculture
Specialty Agriculture
  • Non- traditional agribusiness products, including commodity items not traditional to Virginia
  • Value-added agribusiness products or processes
  • Traditional agribusiness products which are marketed or distributed using new / innovative channels
examples of specialty agriculture
Examples of Specialty Agriculture
  • Extended season produce
  • Identity preserved grains
  • Organic products
  • Bio-fuels
  • Further processed food items
  • Alternative forest products
  • Agritourism / Agritainment
specialty agriculture4
Specialty Agriculture
  • The emphasis of specialty agriculture is adding value to a product or process
importance of specialty agriculture
Importance of Specialty Agriculture
  • Potential for greater return on investment or greater return per acre than traditional commodity items
  • Allows agribusiness producers to take advantage of competitive advantages gained through diversification and / or differentiation
  • Greater long-term growth potential for specialty agriculture products than traditional commodity items
status of farming in va today
Status of Farming in VA Today
  • Smaller acreage farms, compared to national average
  • Increasing land prices per acre
  • Increasing production costs
  • Growing disconnect between value of farm production and retail food prices
creating value vs capturing value
Creating Value vs Capturing Value
  • Capturing value is a function of altering the distribution of value in the agricultural production chain, or by cutting costs
    • vertical integration, cooperatives
  • Creating value is a function of altering the actual or perceived value to a customer
    • Unique or branded products, identity preserved or specialty products, bundling such as agri-tourism
creating a competitive advantage ways of adding value
Creating a Competitive Advantage: Ways of Adding Value
  • Producing and marketing real or perceived quality attributes
  • Reducing transaction costs
  • Bundling products
  • Owning assets along the supply chain for further processing
value added action
Value Added Action
  • Discover and research a value added opportunity
  • Plan for a value added opportunity
  • Take value added action
discovering and researching a value added opportunity
Discovering and Researching a Value Added Opportunity
  • Does this enterprise offer good profit potential?
  • Is this enterprise adaptable to my area?
  • Do I have experience with this enterprise?
  • Do I have, or can I get, the resources to produce this product?
  • Am I willing and able to approach many different people for advise?
discovering and researching a value added opportunity18
Discovering and Researching a Value Added Opportunity
  • Does market research and development appeal to me?
  • Am I willing to spend as much effort in marketing as in production?
  • Is this something I will enjoy?
  • Can I set realistic P&L goals for the enterprise?
  • Am I in the position to take a few risks to make more money?
planning for a specialty ag venture creating a business plan
Planning for a Specialty Ag. Venture & Creating a Business Plan
  • SWOT analysis
  • Choosing a strategic direction
    • Pursue growth
    • Sustain current business level
    • Retrench
  • Selecting direction objectives
    • Market penetration
    • Market development
    • Product development
    • Diversification
  • Set Marketing & Financial Objectives
  • Culminate into a business plan
take action
Take Action
  • Use business plan to pursue financing and initiate the business
vdacs integrated approach to supporting specialty agriculture
VDACS Integrated Approach to Supporting Specialty Agriculture

Clearinghouse for financial resource information

Marketing services

Technical resource

financial resources
Financial Resources
  • Business & Industrial (B&I) Guaranteed
  • Loan Program; USDA Guaranteed loans by commercial lenders to rural businesses.
  • Business & Industrial Direct Loan (B&I Direct) Program; USDA Direct Loans to Rural Businesses that do not qualify for bank financing in rural areas.
  • Direct Farm Ownership and Operating Loans; FSA Government Loans to Family Farmers and Ranchers for Farm Ownership and Operating Purposes U.S. citizens unable to obtain credit through commercial sources
  • Guaranteed Farm Ownership and Operating Loans; FSA Guaranteed Loan helps family farmers obtain commercial credit U.S. citizen unable to obtain credit elsewhere
financial resources23
Financial Resources
  • Intermediary Relending Loan Program (IRP); USDA Loans for establishing revolving loan funds to provide financing for rural businesses and community development
  • Rural Business Enterprise Grants (RBEG); USDA Grants for assisting small and emerging rural businesses to nonprofit and public bodies
  • Rural Business Opportunity Grants (RBOG); USDA Assist in the economic development of rural areas
  • Rural Cooperative Development Grant Program; USDA Grants for improving economic conditions of rural areas through development of new cooperatives
financial resources24
Financial Resources
  • Small Business Innovation Research Program (SBIR); USDA Grants for feasibility studies and product research and development to small businesses
  • 7(a) Loan Guaranty Program; SBA SBA guarantees loans made to small businesses by lenders
  • 504 Certified Development Company Program (CDC); (SBA) Loans for building, improving, or purchase of a site or facility; and purchase of major equipment/machinery
  • SBA MicroLoan Program;Very small loans and training primarily for business start-up
  • Small Business Investment Companies (SBICs); SBAVenture capital and business start-up capital typically for companies with high-growth potential
financial resources25
Financial Resources
  • Down Payment Farm Ownership Loan Program; FSA Assist beginning farmers and ranchers to purchase a farm or ranch
  • Loans for Socially Disadvantaged Persons; FSA Farm purchase and operating loans targeting socially disadvantaged groups
  • Rural Business Investment Program (RDIP); USDA and SBA Promotes economic growth and creates job opportunities in rural areas
  • New Markets Venture Capital Program (NMVC); SBA Promotes economic development in low income areas
  • Value Added Producer Grant Program; USDA Grants used for marketing value-added agricultural products
financial resources26
Financial Resources
  • Renewable Energy and Energy Efficiency Program (REEEP); USDA Assist in purchase of renewable energy systems & efficiency improvements
  • Virginia Business Assistance Loan Guarantee Program; VBA Deficiency guaranty up to $500,000
  • Virginia Capital Access Program; VBA Loss protection to participating banks
  • Small Business Environmental Compliance Assistance Loan Fund; VBA
  • VBA Economic Development Loan Fund; VBA Gap financing to small businesses
  • Southside Tobacco Region Capital Access Program; VBA Loan loss reserve fund for banks
  • USDA Cooperative Services Program; Helps rural residents start new cooperatives and improve the operations of existing cooperatives
technical resources
Technical Resources
  • Regulations
  • Product and industry standards
  • Inspection
  • Collaboration with cooperative extension
  • Specialty ag. research grants
marketing resources
Marketing Resources
  • Virginia Grown program
  • Virginia’s Finest
  • VDACS Domestic & Int’l Marketing
    • Trade shows
    • Buyers’ tours
    • Retail promotions
    • Market Access Program

Virginia Department of Agriculture & Consumer Service

Charles R. GreenProject Manager, Specialty Agriculture804.786.3501