Evaluate your level of expertise as a farmer. If you’re new to farming, you may be able to find grants that pay for training and mentoring programs. Think about your available resources. Do you have access to enough land to farm? Consider what equipment you’ll need and how many people it will take to operate your farm. Take a look at the types of crops grown in your area of the country. You may be able to apply for grants that support organic farming, or specialty crop farming (fruits, vegetables, tree nuts). Analyze whether or not your area can support these types of farming.
Compute the initial costs you’ll incur to open your farm for operation, if you’re starting from scratch. If your farm is already in operation, explain why you need financing. In both instances, you’re explaining how you will use the grant proceeds. You may use the grant proceeds to purchase land, seeds, or new equipment. Your grant proposal may include your need for more labor, or improved housing for your labor force. The business plan should include a projection of the income you’re going to generate and the expenses you will incur each year. A good business plan will also include projections of cash inflows and outflows. Most business plans include at least three years of business projections. You may need to change your plan to meet the requirements of the grant application. Every grant, however, will require you to create a business plan in some form.
Say, for example, that you manage a profitable farm. You have more available land to farm, but you need capital (money) to hire more workers and expand production. You may be able to find a grant that exists to help disadvantaged workers find jobs. Assume that you have expertise in organic farming, but you don’t have the capital to expand your operation. There are grant programs specifically designed to help the organic farmer produce more crops. That type of grant may be a great fit for you.
Farm labor grants, which can be used to locate, hire and pay farm employees. New farmer grants, which are used to help those looking to start operating a new farm. Environmental quality incentive grants, which are provided to those farmers who agree to employ environmentally friendly farming processes in exchange for grant money.
The application will require many of the components of your business plan. You’ll include projected financial statements. Most grant applications will include information about your background. You will document your education and work experience, including any farming experience. The goal is to prove to the grantor that you can use the grant funds to meet the objectives or mission statement of the grantor.
You may be asked to provide annual financial statements for your farm, as well as the farm’s federal tax return. You will provide a balance sheet, which lists the assets and liabilities for your farm. Your income statement shows the revenue and expenses, and your farm’s profit or loss for the year. The farm’s cash flow statement lists the cash inflows and outflows for the year.
Say, for example, that your grant’s purpose is to provide improved housing for farm workers. You will need to document how the grant funds were spent on housing. A grantor is also focused on how their grant dollars are meeting a need over a period of years. If you receive a grant to farm organic crops, for example, your grantor wants to see their grant dollars have an impact over the long-term. Your grant reports should explain that impact. If you use the grant responsibly and generate results, you may be able to apply and receive more grants in the future.
