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
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
- They can strengthen a project by adding valuable resources
- 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.
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,”
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
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
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
- “Don’t put something down as in-kind that you can’t
- “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.”
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.
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
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.