Editor’s note
A previous version of this publication in available in Spanish. (Una versión anterior de esta publicación está disponible en español.)
Grant programs allow agricultural businesses and farmers to seek funding that supports business development and may complement other business financing. Grant funding is intended to serve as a short-term infusion of funds to either plan a new business or grow an existing one.
Grants are different from other funding sources. Unlike loans, grants don’t require the recipient to repay the awarded funding. However, grant programs typically require recipients to make progress toward goals and submit reports to stay in good standing.
Agricultural business development grant programs may fund a range of activities and expenses. Common funding categories include business planning and working capital, although some programs also support business implementation and other operational needs.
- Business planning projects support the exploration of new business ideas and the evaluation of a concept’s feasibility. Deliverables funded by planning-focused projects may include feasibility studies, market studies and business plans. Some grant programs require these activities to be conducted by an independent consultant, whose external perspective can provide an objective evaluation of the proposed venture’s feasibility and market potential.
- Working capital projects provide funding for startup and operational expenses related to objectives such as scaling the business, increasing sales, launching new products and expanding into new markets.
To be considered for funding, an applicant typically submits a proposal to a grant program by a specified deadline. Applicants may prepare proposals themselves or hire a grant-writing specialist. Because grant funding is limited, applicants must submit compelling proposals to remain competitive.
Federal and state government agencies administer many grant programs. This publication introduces those grants that prioritize agricultural business development and offers practical guidance for identifying appropriate programs and preparing strong proposals. Because program requirements and guidelines may change, always review the most current information before applying.
Federal grant programs
The U.S. Department of Agriculture (USDA) is the primary federal agency that offers business development grant funding to agribusinesses and producers. These grantmaking efforts set USDA apart from other federal agencies.
Table 1 describes federal grant programs that offer business development support to farmers and agricultural businesses. Review the descriptions to find a program that best meets your funding needs.
Table 1. Federal grant programs funding agricultural business development projects.
| Program and agency | Program purpose | Eligible applicants | Eligible expenses | Maximum funding | Other notes |
|---|---|---|---|---|---|
| Farmers Market Promotion Program (FMPP), USDA Agricultural Marketing Service | Development, coordination, and expansion of direct marketing of local and regional ag products | Agricultural businesses, producer associations, cooperatives, regional farmers market authorities, nonprofits and other entities; project must benefit more than one producer | Vary by type of grant but may include market analysis, strategic planning, training and education, tool development, marketing and promotion activities, network-building and technical assistance | $250,000 for capacity building; $500,000 for community development training and technical assistance; $100,000 for turnkey marketing and promotion or recruitment and training | 25% cash or in-kind match required; need signed letters of match verification |
| Local Food Promotion Program (LFPP), USDA Agricultural Marketing Service | Development, coordination, and expansion of local and regional food businesses that serve as intermediaries | Agricultural businesses, producer associations, cooperatives, regional farmers market authorities, nonprofits and other entities; project must benefit more than one producer | Vary by type of grant but may include market analysis and planning, business plan, training and education, marketing and promotion activities, network-building and technical assistance | $100,000 for planning, turnkey projects; $500,000 for implementation projects | 25% cash or in-kind match required; need signed letters of match verification |
| NCR-SARE Farmer-Rancher Grant Program, USDA National Institute of Food and Agriculture | On-farm research, demonstration, and educational projects that develop and showcase innovative solutions to agricultural challenges | Farmers and ranchers as individuals or teams | Research, demonstration and education project expenses, including materials and supplies, travel and labor; grant funds only pay up to half of equipment (greater than $5,000 and one-year useful life), permanent fencing, perennial seed or plants, and livestock costs | $15,000 for individual applicants; $30,000 for team applicants | Letter of support required; no match required |
| NCR-SARE Partnership Grant Program, USDA National Institute of Food and Agriculture | On-farm research, demonstration, or education projects related to sustainable agriculture | Agricultural professionals (e.g., university educators, USDA NRCS field staff, consultants, nonprofits, or agency staff); they must partner with at least three farmers or ranchers who take an active role in the project | Personnel costs, materials and supplies, equipment (less than $5,000), travel, meeting expenses, indirect costs (10%) | $50,000 | Indirect costs limited to 10% of total federal funds awarded |
| Regional Food System Partnerships Program, USDA Agricultural Marketing Service | Partnerships to plan and develop local and regional food systems | Eligible entity and partner must be partnered together; eligible entities include producers, cooperatives, producer networks or associations, and other entities; eligible partners include state agencies or regional authorities, philanthropic corporations, institutions of higher education, private corporations, and lending institutions | Planning and design projects may support feasibility studies, partnership development, and strategic planning; implementation and expansion projects build on existing work and focus on executing established strategies, expanding infrastructure, or scaling regional food system activities | $250,000 for planning and design projects; $1 million for implementation and expansion projects | 25% cash match of federal funds awarded |
| Small Business Innovation Research Grant Program (SBIR), USDA National Institute of Food and Agriculture | Develop and commercialize innovative agriculture, food systems, natural resources, rural development, and biobased technologies with strong market and societal impact | Small businesses and small proprietorships that are in business for profit | Eligible expenses may include personnel, research supplies, equipment, subcontractors, travel and other costs supporting approved activities | $125,000 to $175,000 for Phase 1; Phase 1 recipients can apply for up to $600,000 in Phase 2 | No match required; federal priorities change by funding cycle; letter of support encouraged |
| Value-Added Producer Grant (VAPG), USDA Rural Development | Encourage new or expanded value-added agricultural activities focused on processing and marketing | Agricultural producers, agricultural producer groups, cooperatives, or majority-controlled producer-based businesses; must own or produce more than 50% of the raw agricultural commodity | Planning projects fund work such as feasibility studies and business plans; working capital projects fund processing, marketing and advertising costs, and some inventory and salary | $50,000 for planning grants; $200,000 for working capital grants | 1-to-1 match of grant amount is required; cash or eligible in-kind contributions may be used as match |
Missouri grant programs
The Missouri Department of Agriculture (MDA) and Missouri Agricultural and Small Business Development Authority (MASBDA) offer grant funding and financial assistance to producers, agricultural businesses, and other eligible applicants. Table 2 describes several state programs available.
Table 2. State grant programs funding agricultural business development projects.
| Program and agency | Program purpose | Eligible applicants | Eligible expenses | Maximum funding | Other notes |
|---|---|---|---|---|---|
| Food Insecure Cost-Share Grant, Missouri Department of Agriculture | Expand food production, improve access to nutritious food, and help address food insecurity across Missouri | Individuals, businesses, or organizations related to agriculture | Project supplies, including garden tools, production inputs, materials, utility supplies, equipment (kitchen, food processing, storage) and other approved supplies | $50,000 | Program will reimburse 75% of total approved project costs |
| Missouri Farm-to-Table Grant, MASBDA | Expand locally grown agricultural products sold to institutions, including schools, correctional facilities, hospitals, nursing homes, and military bases | Farms or small businesses marketing locally produced value-added goods to Missouri institutions | Coolers; freezers; equipment for washing, bagging, or packing; GAP, GHP and HACCP services | $200,000 | Application fee required; 10% match required; budget must include a 10% grant administration fee; tax credits must be sold for at least 50% of grant request |
| Missouri Value-Added Agriculture Grant, MASBDA | Planning value-added agricultural business concepts to expand markets for Missouri agricultural products and stimulate rural economic development | Producers, groups, businesses, or organizations | Feasibility studies, business plans, marketing plans, and organizational or legal assistance | $200,000 | Application fee required; 10% match required; budget must include a 10% grant administration fee; tax credits must be sold for at least 50% of grant request |
| Specialty Crop Block Grant, Missouri Department of Agriculture | Projects meant to grow competitiveness of specialty crop markets; projects must benefit the industry or public, not only one individual, business, or organization | Individuals, producers, nonprofits, for-profit businesses, colleges and universities, agencies, institutions, industry, and community-based organizations or commercial entities | Land, facility, and equipment rentals; website development; farm and production supplies; printing; and consulting fees; personnel salaries and fringe benefits are also allowable | $50,000 | $15,000 maximum on total personnel and fringe benefits expense; no match required |
| Urban Agriculture Cost-Share Grant, Missouri Department of Agriculture | Small agribusiness development in urban areas | Person, group of individuals, business, or organization related to agriculture | Project supplies, feasibility studies, business plans, and marketing plans | $10,000 | Program will reimburse 75% of total approved project costs |
Best practices for developing a successful grant proposal
Most agricultural businesses rely on loans and personal investments to finance growth. Grants can supplement these funding sources by supporting specific planning, expansion, or business development activities. However, obtaining grant funding requires significant preparation and a strong, competitive application.
The grant process involves nine key steps, from developing an idea to submitting a proposal (Figure 1). Following best practices at each stage can improve your chances of securing funding to support your business’s growth and development.
1. Prioritize your funding needs
Before searching for grant funding, define your goals. Most grant programs prioritize projects that produce measurable results, such as developing a business plan, creating jobs, increasing sales, or reducing costs. When your goals are clearly defined, you can more effectively identify and evaluate grant opportunities that align with your business needs.
Start by envisioning where you want your business to be in the next few years. Then, identify areas where grant funding could help you explore new opportunities, answer important questions, or make strategic investments. Because many grant programs accept applications only once a year, require several months to make funding decisions, and may allow one to two years for project completion, planning ahead is essential. Taking a long-term view will help you make the most of available grant funding.
2. Search for grant opportunities
Once you have identified your funding priorities, begin researching grant programs that align with your needs and goals. This publication highlights several potential funding opportunities to consider. You may also benefit from consulting an extension professional, accountant, or other agricultural experts who can help evaluate your options and identify grant programs that best support your objectives.
3. Navigate a grant program’s RFP
To determine whether a grant opportunity is a good fit, carefully review the full request for proposals (RFP), funding notice, or request for applications (RFA). The RFP outlines the program’s purpose, applicant eligibility, allowable expenses, proposal requirements, submission deadlines, and other guidelines for preparing proposals and budgets.
Print a copy of the RFP or RFA, or save it electronically, and highlight the key requirements and deadlines. After reviewing the document, assess whether the funding opportunity aligns with your organization’s needs and whether your project idea meets the program requirements. Projects that align closely with a funder’s mission, goals, and funding priorities are more likely to receive funding.
If questions arise during your review, contact the program representative by phone or email for clarification about the funding opportunity. Most funding opportunities provide contact information for a program administrator or other designated representative.
4. Stop and assess how to proceed
Evaluate whether your funding needs, business goals, and project timeline align with available grant opportunities. Consider the eligibility requirements, application process, reporting obligations, and award timelines before deciding whether to pursue a grant.
Keep in mind that applying for a grant does not guarantee funding. Even if you choose to apply, it’s wise to explore additional financing options, such as bank loans, personal investment, equity financing, crowdfunding, or product presales. Many businesses rely on a combination of funding sources to support growth and achieve their goals.
5. Plan your grant project
After identifying a grant program to pursue, define the project work that the funding will support. Ensure the project aligns with the grant program’s objectives and delivers meaningful benefits to your business.
As you develop the project plan, identify individuals and organizations that can provide expertise or support. Many grant programs require qualified independent contractors to produce planning-related deliverables, such as feasibility studies, business plans, or market analyses. For working capital projects, you may engage third-party professionals, such as consultants or website developers, to help implement project activities. If the project involves purchasing or constructing infrastructure, consider potential vendors and service providers early in the planning process.
Be prepared to highlight the qualifications, experience, and relevant expertise of your team, contractors, and partners in the grant proposal.
6. Write the proposal
Your proposal is an opportunity to explain your idea, demonstrate the need for it, and show why it deserves funding. Think of the proposal as a written sales pitch that persuades the grant-maker to invest in your project. Although your idea does not need to be entirely new, it should create business opportunities in your geographic area or align with the goals and scope of the grant program.
The RFP or RFA will specify the information that must be included in your proposal. Some grant programs also provide application forms or proposal templates to help guide your submission.
As you write, carefully follow all proposal instructions and address every question outlined in the RFP or RFA. Many grant programs share their reviewer scoring criteria; if available, review these criteria closely and emphasize the highest-scoring components in your proposal. Be sure to follow all formatting requirements, including page limits, margin specifications, font type, and font size. Proposals that fail to meet application guidelines may be rejected before review.
7. Create your project budget
The project budget should include all costs necessary to implement the proposed work. Because funders expect budget requests to be reasonable and well supported, begin gathering budget assumptions early. This may include obtaining vendor quotes, collecting bids, or conducting market research to validate projected costs.
The RFP or RFA will outline specific budget requirements. Many grant programs provide budget templates or worksheets that applicants must use. Do not include unallowable expenses and clearly identify the source of any required matching funds.
In addition to budget tables, some grant programs require a written budget justification that explains why each expense is necessary to achieve project objectives and how cost estimates were calculated. For example, when justifying travel expenses, describe the purpose and dates of the trip, the individuals who will travel, and the assumptions used to estimate costs such as mileage, airfare, lodging, and meals.
8. Revise the proposal
Always review and edit your proposal before submitting it. Check carefully for spelling, punctuation, and grammatical errors. More importantly, ensure your project idea is clearly explained and that your work plan is logical, realistic, and easy to follow.
Many grant programs provide checklists, scoring rubrics, or reviewer guidelines. Use these resources to confirm that your proposal addresses all requirements and includes the information reviewers expect to see.
Consider asking a friend, family member, or extension professional who has not previously seen the proposal to provide feedback. A fresh perspective can help identify unclear sections, missing information, or errors you may have overlooked.
9. Submit on time
Most grant programs have strict submission deadlines and do not consider late applications. Submit your proposal well before the deadline whenever possible.
Submitting early gives you time to address unexpected issues in the submission process. Many grant programs accept electronic applications, and technical problems with email, file uploads, or online submission portals can delay your application. By submitting ahead of the deadline, you can resolve any issues without jeopardizing your eligibility.
After submission, confirm that the funding agency has received your application and that all required materials were successfully submitted.
What to expect after submitting a proposal
Depending on the granting agency, it may take several weeks to several months to receive an official funding decision. The review process typically involves an appointed committee that evaluates submitted proposals and scores them according to established criteria or a review rubric. For some state programs, applicants may also be invited to participate in an interview to answer questions or provide additional information about their proposal.
If your project is selected for funding, a program administrator will contact you to discuss next steps. These steps generally include executing a grant agreement, confirming project requirements, and establishing a project start date. Once the project begins, the granting agency will typically require periodic progress reports. In these reports, awardees describe how funds have been used, which project milestones have been achieved, and what activities are planned for the next reporting period.
At the conclusion of the project, awardees are usually required to submit a final report summarizing project outcomes, accomplishments, expenditures, and lessons learned.
If your proposal is not selected for funding, remember that grant success rates can be low, particularly for competitive programs. Many funders provide reviewer feedback to help applicants better understand the strengths and weaknesses of their proposals. If comments are not automatically shared, you may be able to request them from the program. Should you choose to reapply, carefully addressing reviewer feedback can strengthen your future submission and improve its competitiveness.