Are you a rancher or farmer looking for funding to finance your operations? Business grants may be the answer. Unlike regular small business loans, farm grants don’t require repayment, so they’re essentially free financing for entrepreneurs in agriculture.
Finding and applying for a grant takes time, and competition is tough.
Read on to learn how to get started. We cover everything in this blog, from the types of private, state, and federal farm grants to how to apply for them.
Federal government farm grants
Business grants for farms primarily come from the federal government, particularly the Department of Agriculture (USDA). You can find an up-to-date list of grants on the USDA’s website, including eligibility details and application guidelines. Here are some examples:
Farmers Market Promotion Program
The Farmers Market Promotion Program provides small-business grants to farms, regional farmers’ market authorities, and other agricultural businesses.
It can also grant funding to community-supported agriculture associations and networks or other similar organizations. The goal of this initiative is to increase community access and the availability of regionally and locally produced products.
Three types of farm grants are available under this program, and they are granted based on how the funds will be used:
- Capacity Building Grants: Eligible projects include consumer outreach, strategic planning, market analysis, and market manager or producer education
- Turnkey Marketing and Promotion grants: As an applicant, you must agree to perform at least three promotion- and marketing-related activities to get these grants
- Community Development Training and Technical Assistance grants: The funding from these grants can be used for promotion and marketing assistance, as well as for technical assistance to comply with buyer and regulatory requirements
Renewable Energy Systems & Energy Improvement Grants
These farm grants are made possible by the Rural Energy for America Program.
The goal is to help rural small businesses and agricultural producers buy and install renewable energy systems or implement energy-efficient improvements.
Eligible grant projects include installing, buying, and improving systems like:
- Insulation
- Wind generation
- Hydropower
- Solar generation
- Lighting
- Windows and doors
- Refrigeration or cooling units
You can also apply for funding to buy new energy-efficient equipment that can be used for agricultural processing and production.
Funding ranging from $2,500 to $1 million is available for renewable energy systems, while $1,500 to $500,000 is allocated for energy-efficiency projects.
The USDA is expected to cover 50% of the total eligible costs for these projects. Note that you must be located in a rural area with a population of no more than 50,000 residents to be eligible.
Specialty Crop Block Grant
Visit your state department of agriculture to apply for this USDA grant. It doesn’t have matching requirements.
Value-Added Producer Grant
As an agricultural producer, you can benefit from the Value-Added Producer Grant (VAPG) funding to create new products, create marketing opportunities, and increase your farm’s income. Grants come in two types:
- Planning Grants: Up to $75,000
- Working Capital Grants: Up to $250,000
These farm grants can be secured no matter where you are in the US and are suitable for new farmers. Your VAPG application may also be prioritized if you are a small or socially disadvantaged farmer.
State farm grants
Federal farm grants are limited and highly competitive, with no approval guarantee. You might get luckier with grants from local, state, or regional sources. That said, it’s worth exploring all available options. Here are some worth considering:
State Departments of Agriculture
Most states provide government farm grants via their local Department of Agriculture. You may use the funding for various purposes, such as:
- Farm development and management
- Marketing and promotion
- Agricultural research
- Climate action
- Energy efficiency
- Technology advancement
If you live in New York State, the New York State Grown & Certified Infrastructure, Technology, Research, and Development Grant can help your farm purchase innovative equipment or technology, invest in new infrastructure, and do research to keep up with consumer demand.
If your agribusiness is in an urban area in Missouri, you can apply for the Urban Agriculture Cost-Share Grant Program. The government provides funding to support marketing and business plan development, promote urban agriculture, community gardens, and feasibility studies.
It’s also worth going to local universities and colleges for state-specific grants for agribusinesses. Take the time to check with agricultural networks and community organizations, too, as they might offer the same opportunities.
Sustainable Agriculture Research and Education (SARE) Grants
The SARE program is under the National Institute of Food and Agriculture, and it offers farm education and grants in every state. Each region (North Central, Northeast, Western, and Southern) works independently to run programs for the states in their jurisdiction.
Refer to your region’s SARE website to check the latest farm grants available. It also helps to connect with the coordinator in your state for educational programs and to learn about funding opportunities.
Private and community farm grants
In addition to USDA Grants, some nonprofit organizations and private companies provide business grants for farmers.
Texas Rural Woman Grant
The Texas Woman’s University offers this grant to businesses in rural areas of the state. Eligible participants must have a for-profit business running for at least three years. The grant funds can be used for various purposes, such as farm machinery and implements.
Sky High Farm Grants
The Sky High Farm Grant was launched in 2024 for Black, Pacific Islander, Asian, Latinx, indigenous, refugee, and migrant farmers. The application period ran until April 22, 2024.
Brighter Future Fund
The Brighter Future Fund program is a grant from the American Farmland Trust. Up to $10,000 can be granted to a farm family or an individual. Eligible projects for this grant must fall into one of the following categories:
- Professional services: Hiring professionals like financial planners or business consultants involves costs.
- Infrastructure or equipment costs: Purchasing machinery that enhances crop quality or soil health is expensive.
For the qualification requirements and application process, visit the American Farmland Trust website. The latest cycle opened in July 2024.
Fund-a-Farmer Grants
The Food Animal Concerns Trust (FACT) offers the Fund-a-Farmer grant program every year. In 2023, it provided over $250,000 to 87 farms that needed funding to expand humane farming and improve animal welfare practices.
Specifics about the FACT program may change slightly annually, but many eligible projects involve improving or building farm animal housing, water systems, or fencing. You can explore the past projects supported by FACT on their website.
The next cycle of applications will open on October 10, 2024, but consider signing up for email notifications on their website to get timely updates on new opportunities.
Farm Bureau Ag Innovation Challenge
If your farm is creating new solutions for the agriculture industry, joining the Ag Innovation Challenge might help you secure the funding needed for your projects. It can provide a startup grant to help you create innovative solutions to overcome issues affecting rural communities, ranchers, and farmers.
The Farm Bureau will award ten businesses a total of $165,000, and the winner will receive $50,000.
Meanwhile, semi-finalists participate in a networking event and live pitch competition to showcase their ideas to Farm Bureau members, industry representatives, and investors. This is an annual competition, so check the Farm Bureau website for the latest dates.
Young Farmer Grant Program
The National Young Farmers Coalition partnered with Chipotle to offer beginning farm grants through this annual program. Every spring, the Young Farmer Grant Program grants $5,000 to young ranchers and farmers in addition to a one-year membership to the coalition.
To qualify, you must be 18 to 40 years old and own and operate a ranch or farm or plan to commence your operations. Moreover, you should demonstrate how you will use the grant funds to achieve your career goals in farming.
This grant is suitable for farmers in mostly underserved groups. The coalition is committed to providing at least 50% of grants to Indigenous, Black, and other people of color. It also caters to transgender, non-binary, and female-identifying farmers.
The FruitGuys Community Fund
If you own a small or medium-sized farm with at least a year of experience and you want to enhance its operations, try applying for the FruitGuys Community Fund to get up to $5,000. The fund has a website that accepts applications and details about your project, and up to 20 finalists will be invited to submit their complete applications.
Each submission is evaluated based on a project’s ability to enable sustainable farm operations and strengthen the community. These projects include natural pest control, water conservation, and energy efficiency. The next cycle is in January 2025.
Veteran farm grants
If you are a veteran, the Farmer Veteran Fellowship Fund may provide much-needed financial assistance when starting a new farm or ranch.
Unlike most grant programs, the fund is not directly issued to farmers. Instead, it is paid to third-party vendors for the items you name as helpful to your farm business. These farm grants can go from $1,000 to $5,000 and may be used for financing purchases, such as storage freezers, fencing, tractors, livestock, and feed equipment.
Qualifying for this program requires membership in the Farmer Veteran Coalition, and you must be currently serving or have served in any US Military branch.
If you have previously served, you must have received an Honorable characterization of service when you were discharged. When applying, it’s also essential to have an existing agricultural business and a business plan.
Farm grant alternatives
Not all businesses can benefit from grants, so it’s worth exploring other options, such as:
- Farm loans: These can help cover operating costs, buy farm equipment or machinery, purchase livestock, and build farm buildings.
- SBA loans: These are government-guaranteed loans with long repayment terms and competitive interest rates. They are also practical for various purposes.
- Working capital lines of credit can be useful for emergency expenses, seasonal slowdowns, or managing gaps in cash flow.
To explore loans for agricultural land and related projects, contact our team of commercial real estate bridge loan lenders here at Private Capital Investors.
