Money for nothing? There’s no such thing.
If you want to apply for a producer grant, you need a solid business plan and the wherewithal to see your idea through.

By Dan Sullivan


Left to Right: Elizabeth Higgins, director, Center for Rural Development Louisiana Tech University; Carmon Echols, employee of Mitcham Farms; John H. Broussard, Business and Cooperative Programs director, USDA Rural Development; and Joe E. Mitcham, Jr., owner of Mitcham Farms, LLC.

Useful grant resources on the web:

“Access to the Internet is going to be really important in federal grant writing,” advises Elizabeth Higgins of Louisiana Tech University’s Rural Development Center.


Grant programs

• Catalog of Federal Domestic Assistance:
www.cfda.gov

• Grants.gov:
www.grants.gov
Higgins warns that this relatively new site is clunky and assumes a fast Internet connection. The upshot is that all government grant opportunities are posted here.

• Federal Register:
www.gpoaccess.gov/fr
Browse table of contents for year and date; the search engine leaves a lot to be desired, says Higgins.

• Federal State Marketing Improvement Program:
www.ams.usda.gov/
tmd/fsmip.htm

• National Sheep Industry Improvement Center (NSIIC) Competitive Grants: www.nsiic.org

• Office of Management and Budget—grant forms and information:
www.whitehouse.gov/
omb/grants

• SARE (Sustainable Agriculture Research and Education) On-farm Research Grant and Sustainable Community Innovation Grant:
www.griffin.uga.edu/sare

• SARE Producer Grants (Southern region):
www.griffin.uga.edu/
sare/producerpage.htm

• USDA: www.usda.gov

• USDA Small Business Innovation Research Grants (SBIR):
www.csrees.usda.gov/
funding/sbir/sbir.html


Data and ideas

• Agricultural Resource Marketing Center:
www.agmrc.org

• ATTRA (Applied Technology to Rural Areas):
www.attra.org

• Food Entrepreneur Resources (Northeast focus):
http://foodsafety.psu.edu/
processor/resources.htm

• FoodMAP (food marketing and processing):
www.foodmap.unl.edu/
index.asp

• National Agricultural Statistics Service (NASS):
www.nass.usda.gov

• U.S. Census Bureau:
www.census.gov

• USDA Economic Research Service:
www.ers.usda.gov

• USDA SARE:
www.sare.org

• Value-Added Producer Grant Program:
www.rurdev.usda.gov/
rbs/coops/vadg.htm


Other resources

• DUNS number:
http://mycredit.dnb.com

• United States Small Business Development:
www.sba.gov/sbdc

• University of Nebraska Planning or Working Capital Value-Added Producer Grant template:
http://fpc.unl.edu/
newsworthy/grant.htm

April 13, 2006: If you are a producer and you are thinking about applying for federal grant funds, Elizabeth Higgins of Louisiana Tech University’s Rural Development Center has news for you: It’s not free money.

“It’s a gamble,” Higgins says. “There are trade-offs in time.”

First of all, she says, you don’t know if you are going to get a grant; then, if you do, you are obligated to carry it off. And sometimes, Higgins says, your vision of how a grant project fits into your operation shifts radically between the time you write a proposal for a particular grant cycle and the time implementation rolls around.

The bottom line, she says, is that you need to carefully evaluate whether the time and resources you will inevitably put into fulfilling a grant would be best spent elsewhere. “Just because it’s money doesn’t mean it’s good money. There’s always a cost to it.”

Higgins was on hand for the fifteenth annual Southern Sustainable Agriculture Working Group conference in Louisville, Kentucky last January to outline a number of grants available for producers who want to conduct on-farm research, offer educational programs, or tack a value-added component onto their operation.

She listed these positives concerning funding of projects for the farmers attending her “Grants for Producers” workshop at the conference:

  • They can allow you to test new ideas with less personal financial risk.
  • They can strengthen a project by adding valuable resources and collaborators.
  • The information you collect may prove useful regardless of whether you get funded. (The grant-writing process can help you to evaluate your ideas and develop a business plan.)

“The best projects to seek grant fund for are those you would be willing and likely to do with your own money,” Higgins said. “You have to slow down and evaluate…If this isn’t something you would be doing with your own business, then it’s probably a bad idea.”

A common misconception about federal grant funds is that they can be used to build infrastructure—such as a new building or truck, or a saw mill—Higgins said. That’s far from typical, she said, a fact that holds doubly true for for-profit enterprises. “The grants that are there [for infrastructure] pretty much all go to the public entities.”

Get your ducks in a row

Another useful bit of advice Higgins offered would-be grant seekers was to begin the process as early as possible once you are convinced an available grant is a good match for your project. That includes meeting federal administrative requirements such as have a DUNS (Data Universal Numbering Systems) number that identifies your business and having a legal name for your business. These take time, she said, sometimes up to several weeks, and there are other hoops to jump through depending on the grant.

When downloading grant application packets off of government sites such as www.grants.gov, Higgins said, it really helps to have the full version of Adobe (versus the free Adobe Reader), which enables you to fill out the forms electronically, save them and make revisions and additions over time. Academic versions of the program (available to students and teachers) can be had for around $60, she said, and older versions are sometimes found on eBay.

Higgins rattled off a litany of grant program websites as well as internet resources for grant writing and research (see “Useful Grant Resources” sidebar). Access to the Internet is critical in the competitive arena of successful grant writing, she said.

Value-added Producer Grant (VAPG) Program

“There are very few grants for for-profit businesses,” said Higgins. “This is a glaring exception.” These USDA-funded grants require a one-to-one cash or in-kind match, she said. Grant proposals are usually due sometime in the spring or early summer. At this article’s publication, the 2006 funding cycle had just past, with the annual Notice of Solicitation of Application (NOSA) having been published on December 21, 2005 and applications accepted until March 31, 2006.


Peach trees in bloom at Micham Farms, LLC.

The grants may be used for planning activities and for working capital for marketing value-added agricultural products and production of farm-based renewable energy. Eligible applicants include independent producers, farmer and rancher cooperatives, agricultural producer groups, and majority-controlled, producer-based business ventures.

The Planning Grants are easier to write, Higgins said, whereas Working Capital grants require developing a solid business plan that can include financial details, feasibility studies, survey work and any other applicable research.

While the grants won’t pay for infrastructure, they can be used to cover expenses such as rent, travel, promotional materials and office equipment related to the business. These grants can also help forge partnerships, say between a farmer and a canner. “It’s a way of bringing a non-producer into a project and getting it funded,” said Higgins.

Eligible uses of planning grant funds include legal assistance, feasibility studies, business planning and developing a marketing plan. The maximum grant award is $100,000. Eligible uses of working capital grant funds include operating and paying the normal expenses of a business venture (with some limitations). The maximum working capital grant allocation is $300,000. For the 2006 funding cycle, $1.5 million was set aside for projects requesting $25,000 or less. “…That’s an advantage to smaller producers writing their own grants,” Higgins said. “The federal government is matching dollar for dollar what you’re doing on your farm, so it’s a great deal.”

Ineligible uses of funding include starting or expanding a farming operation, regular costs of production, purchasing farm equipment, and permanent improvements to a farm or ranch (including buildings, machinery and land).

Higgins said some of the positives of VAPGs include that you don’t have to share your results, you can improve your business with a significant level of funding, and that the grants can provide both salary and working capital. Negatives, she said, include the highly competitive nature of this national grant program and the rather detailed proposal and reporting requirements.

(See “Useful Grant Resources” sidebar for a template to guide you through the VAPG-writing process, courtesy of the University of Nebraska.)

SARE Producer Grants

These grants fund farm-based research and marketing and demonstration projects to be shared with other farmers and ranchers.

Eligible applicants include producers or producer organizations interested in conducting research or marketing projects related to sustainable agriculture. The projects must include collaborators such as other farmers, researchers, extension agents, governmental groups or NGOs, or others who help with planning, data collection and dissemination of results.

Eligible uses of funding include costs of sampling and analysis, project materials and supplies, outreach expenses such as field days, travel, and outside labor costs (and your own project-specific labor).

Ineligible uses of funding include starting or expanding a farm or farming operation, buying equipment, permanent improvements to a farm or ranch, full meals at field days or other large gatherings (snacks/refreshments are okay), and testing of commercial products.

Projects may be funded for up to two years for a maximum of $10,000 for an individual producer or $15,000 for a producer organization. There are no match requirements. Proposals are generally due in the fall (look for an announcement in the summer).

The application is relatively simple, and grants are evaluated on a regional rather than a national level. On the other hand, the funding level is relatively low, projects require collaboration, and you are required to share your results.

Other grants available to producers include:

Higgins helpful hints for grant seekers

BE CAUTIOUS ABOUT IN-KIND CONTRIBUTIONS

  • Infrastructure, including machinery is not generally considered an in-kind contribution.
  • When paying for services such as consultation, you must document that the rate is what the service provider normally receives (or must defer to IRS set standards for the service). “The more you use federally established rates, the less paperwork you have to do.
  • “Don’t put something down as in-kind that you can’t document.”
  • “If it won’t pay for it in the grant, you can’t use it as a match.”
  • Using a civic facility such as a church hall: “If it’s usually free, then you can’t use it as a match…You have to show that it usually costs something.”
  • “With a match, it’s better to err on the side of conservative than it is to eek out every penny as a match…for your paperwork sanity.”

START EARLY
So you just missed the boat on this year’s Value Added Producer Grant cycle, but that puts you in perfect position to follow Higgins words of wisdom and get moving on 2007 right now. “The most difficult part is getting the financial stuff together,” This you can do, she said, by utilizing the resources of organizations like the Small Business Development Center (www.sba.gov/sbdc) and your local extension office.

GIVE THEM EXACTLY WHAT THEY WANT
Respond specifically to the criteria that are the basis for scoring, putting the most time and effort into those items that are weighted most heavily. It doesn’t much matter how well you did with the minutia if you missed the big picture.

FIND THE EFFECTIVE AVAILABLE TOOLS AND USE THEM
Higgins’ ace in the hole for writing several successful VAPG proposals was the template designed by the University of Nebraska and available to the public (see “Useful Grant Resources” sidebar). “I am three for three,” she said of her track record using the tool.

BE THOROUGH
The most basic, and also the most important, rule in filling out a grant application packet, Higgins said, is to complete all forms fully. Approximately half the applications for a grant she was recently involved with were round filed because of missing information, she said.

TAKE A STEP BACK
Finding a holistic perspective is also a good strategy, she said. “If you can tie it into the economic benefit for the larger community, you’ve got a stronger proposal.” Statistical data such as population and poverty level can be useful tools for demonstrating a need for a particular project. Illustrate the larger impact of your project and you’ll gather extra points.