Nothing about the weather-beaten sheep shed off a narrow gravel road that twists up through the Blue Ridge some 30 miles west of Lynchburg suggests it is the headquarters of a growing national hunger-fighting organization.

But before the year is out, a unique operation called the Potato Project, based here, will have rescued 8 million pounds of potatoes from garbage heaps and dispatched them to hungry people in 35 states and the District of Columbia.

Begun 14 months ago by two United Methodist preachers, the Potato Project has forged a long-missing link in the food distribution chain between waste in the fields and hungry people in the cities.

The basic premise is simple: Collect potatoes that are not marketable -- because they are misshapen or were nicked by the digging machines -- but are perfectly good to eat, and ship them to food warehouses and soup kitchens in cities and on Indian reservations.

"We stumbled into it last spring [1983] and were just going to do it for eight weeks, from the Eastern Shore to eight Virginia cities and the District of Columbia," said the Rev. Ray Buchanan, one of the founders of the Potato Project. "Somehow, we just never stopped."

From the improvised office in their hill country sheep shed, Buchanan and his partner, the Rev. Kenneth Horne, have distributed potatoes through more than 80 outlets, at a cost currently running at 3.8 cents a pound. They plan to double the volume in 1985, as well as branching out into such items as green beans, corn and frozen fish. They learn about available potatoes "by word of mouth," Horne said. "You work with one farmer. He learns that things are on the up and up, and he says, 'I know a guy you ought to call,' and the word gets around."

Last week, for example, they had a call from a broker on Virginia's Eastern Shore whom they had got in touch with four or five months ago. Could the Potato Project use a load of potatoes rejected by the "chippers" because they had knots on them and wouldn't fit in the potato chip machinery?

They could.

Two days later, a huge silver tractor-trailer truck eased into the space behind First Rising Mount Zion Baptist Church on N Street NW and dumped 49,000 pounds of potatoes for the Council of Churches to distribute to the poor in Washington.

To keep costs at a minimum, the Potato Project seeks distribution sites as close as possible to where the potatoes are grown. "We try to make sure that nothing is resold, and we try to make sure it gets to the people who need it," Horne said.

Their United Methodist connections come in handy, but "if we find a place where there's not a Methodist Church, we can always call the Episcopalians or the Lutherans," Horne said.

Buchanan and Horne are convinced they have only scratched the surface of a mountain of food that could go to the needy. "We'll move 8 million pounds [of potatoes] this year, and we're only dealing with 27 or 28 growers" in a dozen states, Buchanan said. "In Maine alone there are 1,100 growers.

"Last year, one grower, who is also a broker, gave us 2.4 million pounds. I asked him, 'What did you do before we came along?' He said, 'Well, I gave the starch plant all they could use, and then I dumped 3 million pounds.' "

The Potato Project pays the growers' cost of bagging the potatoes -- the bulk load that went to Washington last week was unusual -- and the freight to the nearest distribution center, though the receiving food banks or soup kitchens are invited to help pay shipping costs if they can.

Besides the satisfaction of knowing the potatoes are nourishing someone in need, the grower may get a tax benefit for a charitable contribution. Buchanan has been lobbying both in Richmond and in Washington recently to get laws covering such benefits strengthened.

The early days of the Potato Project were particularly chaotic on the financial front, Kenneth Horne's brother David recalled. "There was a time last winter when we were in a really tight financial situation.

"We finally got out from under, and Ken went off to raise some money so we would have a little cushion. But while he was gone, a guy called and wanted to give us 2.25 million pounds. And somebody else called with another batch. We hated to turn them down, so when Ken came back in a couple days, he was all excited because he'd raised $6,000. But we'd already spent it!" David Horne said.

Buchanan and Kenneth Horne, both Vietnam veterans who have been friends ever since they began graduate study for the ministry at Duke University, have long since given up the pastoral ministry to operate the Potato Project full time, though "somebody is speaking somewhere about three times a month," Buchanan said.

The speaking helps raise money to keep the project going. The three administrators pay themselves salaries of $17,500 each. Bills for telephone service, which is essential, run to $600 or more a month, David Horne said.

The bulk of next year's $646,300 budget will go for bagging the potatoes and for freight. "We're looking for donated bags and donated freight, but donated freight is very difficult to arrange because of the nature of the business," said fund-raiser Horne.

Farmers and processors have offered them other foodstuffs. "A green bean packer on the Eastern Shore of Virginia said he could give me several hundred bushels of green beans," Buchanan said. Their only flaw: they are too long or too short to fit into the processing machinery.

There have also been offers of frozen fish, dairy products, even watermelons.

"What we foresee at some time in the future is that we may get so many potatoes given to us that we can't use them all fresh, so we may want to experiment with dehydration. Then you get into a whole new ballgame," said Buchanan.

"One of the things that makes this program is that it's not just direct relief; it strikes at one of the systemic causes of hunger," he said. Given the amount of food that they have already collected, and the tons more they know is out there, he said, "the only limitation to the program is financial."