MONTPELIER, Vt. – A new $250,000 federal grant is aimed at putting more locally raised food into New England’s schools, colleges and hospitals.

The U.S. Department of Agriculture grant, awarded this month to the Northeast committee of the National Farm to School Network, will help pay for expanding processing of local food in Massachusetts, opening a new processing project in Maine and setting up a model distribution system.

Proponents say that if New England schools bought just 5 percent local foods, it could boost the region’s agriculture economy by $7.5 million.

In Vermont, more than 200 schools purchase local products, but for many it’s only a small percentage of their total food.

A few have reached 20 percent, said Dana Hudson, the Northeast regional project coordinator.

But demand has been rising in the last few years, not just from schools but from institutions like colleges and hospitals as people seek fresh, healthy, safe foods, while supporting local farmers and reducing environmental impacts of transporting foods long distances.

“There’s just a lot of demand for the local product by the institutions and kind of a scrambling in the ag industry to meet that demand because so many of our farmers are . . . selling direct to consumers,” said Kelly Erwin, coordinator of the Massachusetts Farm to School Project, which works to match farmers with schools.