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Home > Grants, Loans & Financing > Grant Opportunities > AGRI Value Added Grant Program > Value Added Grant FAQs

Minnesota Value Added Grant Program Frequently Asked Questions

General Program Questions

1. Are applicants that have received previous Value Added Grant award(s) from the MDA eligible to receive another grant?

  • Yes; there is not a lifetime cap on how much a grantee may be awarded.

2. Is this program funded only for a certain period? Is it through this round only? 

  • The MDA Value Added Grant Program received funding by the State Legislature through the Agricultural Growth, Research, and Innovation (AGRI) program for State Fiscal Years (SFY) 2018 and 2019. We hope and plan that the State legislature will continue to fully fund the AGRI program in SFY 2020 and 2021, but we will not know the amount of funding we will have available to administer until May/June of 2019.

3. How much funding is available in this grant program?

  • The Value Added Grant program has been appropriated $3,500,000 for the entire State Fiscal Year. Round two of Fiscal Year 18 will be funded at two levels. Level 1 Projects have a minimum of $1,000 and maximum of $200,000. Level 2 Projects have a minimum of $200,001 and maximum of $1,000,000. Applicants can only apply to one level. We are expecting to award about $2.5 million to applicants from this round.

4. What have been the average grant award amounts?

Combining two rounds of grant awards each state fiscal year:

  • 2013: $19,477
  • 2014: $25,782
  • 2015: $40,369
  • 2016: $37,504
  • Round 1 of 2017:  $50,837

5. Are there lists of past grant awardees?

6. How many applicants have been awarded a Value Added Grant? How many total funds are allocated in each round? How many applications do you receive for each round? What is the success rate?

Fiscal Year Round Number of Applications Number of Awards Award Amount Requested Award Amount Received
2013 1 + 2 104 44 $2,410,651  $ 857,873 
2014 1 44 24 $1,492,406  $ 715,345 
2014 2 75 33 $2,964,708  $ 754,207 
2015 1 46 25 $2,713,908  $ 845,552 
2015 2 66 29 $3,078,454  $1,334,373 
2016 1 42 24 $2,135,481  $ 903,758 
2016 2 67 23 $2,713,422  $ 896,425 
2017 1 40 20 $2,645,771  $1,016,741 


7. We have a project already started. Can we apply for the grant?

  • Any equipment purchased or construction started before the applicant is notified they have been awarded the grant is NOT eligible for reimbursement.
  • If you already have a deposit down on an expensive piece of equipment, but are NOT currently in possession of this equipment, it is possible to include this piece of equipment in the budget of your application.  This piece of equipment may be eligible if you have only put down an initial deposit on it and will not receive it (it will not be shipped from the vendor) before you are notified of the grant award.  If you receive, or make further payments on the equipment before notification of the grant award, then it is no longer an eligible grant purchase.  Only the expenditures made after notification of the award would be eligible for reimbursement of up to 25% of the amount paid to the vendor.  So, the deposit would NOT be eligible for reimbursement with grant funds.

8. We are looking at two different vendors for an equipment purchase. Are we required to choose a vendor prior to the submission of the grant application?

  • You do not need to choose the vendor prior to submission; but you should describe the item, explain the features that are important for your needs, and provide the quote from at least one of the vendors. If awarded a grant, you are not required to use the vendor listed in the budget of your application, BUT the item purchased must serve the same function(s) and satisfy the same needs as described in your application.

9. Is there a match requirement? Can I use grant funds from another department of MN as part of my matching funds? Can donated items or volunteer time be used?

  • You are required to show that you have 75% of the total grant project costs available to use as matching funds for the grant award funds. 25% of your grant eligible expenditures will be reimbursed up to the award amount written in the grant contract. The applicant will need to describe how they can provide at least 75% of the total grant project costs. The costs paid by the applicant do not need to be all cash; they can be from a combination of various sources (please see page 4 of the RFP for eligible sources of the applicant’s matching funds).
  • We do not accept in-kind matches, which are non-cash donations of a good or service that can be given a value (such as business owner’s hours spent installing the grant project or the value of a donated piece of equipment).
  • Funds from the State of Minnesota also cannot be used to match the grant funds.  Ineligible State funds are those obtained through the budgeting process of the Minnesota State Legislature or granted by a State agency. 

10. Do you have any suggestions for obtaining applicant funds (75% of the total grant project cost as a cash match)?

  • Our MDA Rural Finance Authority (RFA) administers a Farm Opportunity Loan Program that finances the purchase of equipment to add value to crops or livestock and other purposes (contact is Ryan Roles at 651-201-6666 or RFA general phone number is 651-201-6004).
  • Besides conventional loans, there are some other sources of loans: local USDA Farm Service Agency, DEED Small Business Development Centers, your regional initiative foundation (PDF) and local Economic Development association.
  • The Rural Business Service staff of USDA MN Rural Development Agency offers financial assistance programs (both grant and loans) including revolving loan fund programs for rural small businesses and Value Added Producer grants.

11. If I am awarded a grant, will I need to pay taxes on the grant funds I receive?

  • Yes, you will need to pay taxes on the State grant funds that are received by the individual, farm, or business written in the grant contract.

12.  If we cannot afford to complete an entire project in the allotted time frame, can we apply for certain portions of the project that we know we have funds for?

  • Yes; it is all right to apply for a portion of your long term business plan if it is an eligible project, serves the objectives of the grant program, and will positively impact Minnesota agriculture.  It is preferable that you apply for the next parts of your plan for which you have the funds to match the grant award within the 18 month timeframe of the grant contract.

13. Do the grants have to be paid back? 

  • No; Grant funds do not need to be paid back UNLESS the grantee does not abide by the language in the grant contract or program requirements

14. Are there any restrictions against wineries applying for a grant?

  • No, there are not any restrictions against wineries applying for the grant if more than half of the grapes or other fruit are grown in Minnesota.

15. Is equipment needed to make a new value-added product that will be sold to a new market eligible for this grant? What about equipment used to scale up production?

  • Yes, equipment needed to make a new value-added product qualifies IF the applicant is eligible to apply and the equipment will be used for value-added processing, segregating, or manufacturing of an agricultural product or byproduct grown or raised in Minnesota.
  • Yes, equipment used to scale up production qualifies IF the result will also expand their markets or diversify the applicant’s or supplier’s markets.

16. Are administrative expenses eligible for reimbursement with grant funds?

  • No, only the purchase and installation of equipment costs or the costs (materials and labor) for facility improvements are eligible grant expenditures.

17.  I will be building a new plant that will consist of two separate value-added processing facilities. Can I apply for separate grants for both pieces of the operation? If so, what would be the maximum dollar amount available to me?

  • Yes; you can apply for two separate grants during the same round.
  • Whether you submit both projects in one application or in two separate applications, the total amount an organization can receive during a single round is $200,000.
  • You may re-apply during a following round in order to receive additional funds. Keep in mind your application will still be competitively reviewed during that round.

18.  The RFP states that no harvesting equipment is allowed.  Will you please explain that?

  • Harvesting equipment is used to produce an agricultural product.  To be eligible for this grant, the project (equipment or facility improvement) needs to be used in the post-harvest process of adding value to an agricultural product.
  • However, Pro*Act is an organization that offers grants to farmers through their Greener Fields Together grant program.  It is a national association of produce distributors.  Email: info@greenerfieldstogether.org for more information.

19.  How do I determine whether my project is eligible or not for a Value Added Grant?

  • The Value Added grant project needs to be part of a value-added process that impacts Minnesota agriculture.  A value-added agricultural product, as defined by USDA-Rural Business Development, is any agricultural commodity or product that:
    • has undergone a change in physical state or form (changing milk into cheese for example); or
    • was produced in a manner that enhances its value, as demonstrated through a business plan; or
    • is physically segregated in a manner that results in the enhancement of the value of that commodity or product (removal of debris or unwanted seeds according to size or color for example).
  • For the purposes of the AGRI Minnesota Value Added Grant, we do not include the second bullet and consider value-added to be the increase in value of an agricultural product through added processing, segregating, or manufacturing. Only equipment or facility improvements that are needed to process an agricultural product (post-harvest or after transporting an animal from the farm) and get the value-added product to market are eligible for a Value Added Grant.
  • The application will be scored based on how well it addresses the points in the evaluation profile on page 5 of the RFP and the extent the grant project will expand markets for Minnesota farmers and increase the sales of Minnesota agricultural products by expanding the applicant’s existing markets, enabling entrance into new markets, or improving food safety of their value-added product(s).

20. What does scoring additional points for implementation of a food safety plan mean?

  • It means the scorer considers the grant project is intended to satisfy a food safety requirement or it will increase the food safety of the value-added product being made by the applicant. A grant project may be a next step in carrying out a food safety plan. Each reviewer will add from 0 to 5 points to the score of your application depending on how much they are convinced that your grant project will increase food safety from your narratives.

21. Are there two Value Added Grants offered through Ag Marketing and Development?

Application Questions

1. Any tips for me as I apply for the grant?

  • Read the narrative prompts and questions then enter an answer to all of them. Also complete and submit all of the tables.
  • If you have been funded in the past, reviewing your previous application is a great place to start.
  • Read the example application.
  • Discuss your proposal with your local Economic Development Director or staff at your regional Small Business Association, Initiative Foundation, of Farm Service Agency.
  • You may request, in writing, the application from a previously awarded grantee.  The personal and business information and data will be blackened out and the tables, letters of support, business plan, and cash flow calculations etc. submitted with the application will be removed before sending to a potential applicant.

2. Do the character limits for the various questions include “spaces”?

  • Yes, the character limits do include spaces.

3. From whom should I obtain a letter of support for this application?

We think it may best benefit your score to obtain a letter of support from 1 or more of the following:

  • A Minnesota farmer or producer you purchase products from and/or plan to purchase from. The letter should indicate how much you currently purchase from them and how much they expect to sell to you after the grant project is completed.
  • A current and/or potential new market.
  • Your lender, banker or other organization that will be used for the balance of your match funding or can support your business readiness.
  • Someone that can attest to your knowledge, skills or ability that will help you be successful in the proposed venture.
  • Someone, organization, or association who supports your business venture.

4.  Where can I get help with writing the grant application?

  • Small Business Development Centers, local Economic Development Associations, and Regional Initiative Foundations have resources to help with grant writing.  Some applicants have acquired the services of an English, history or business teacher or a grant writer to help them complete their application.

5. I have a business plan, but some of the marketing and financial details are confidential. I am fine with sharing that information with the MDA, but I do not want those details published to the public. What is the best way to handle this?

  • On the document you submit to MDA, clearly mark the information that you would like to remain confidential. This can be done by highlighting the information or by placing it in parenthesis and include a description that marks the information as confidential. For example: (Our business is expanding by ______. -CONFIDENTIAL); or our business is expanding by ____. -CONFIDENTIAL. The marked information will be redacted (blackened out or removed entirely) if your business plan is specifically requested by someone outside of the MDA.
  • We will not include your personal or business information, business plan, financial calculations or data, matching funds information, or measures table to any potential applicants that request your application.

6. I am requesting a grant award of less than a $100,000.  Do I need to submit a business plan and/or cash flow calculations?

  • No you are not required to submit a business plan since you are requesting an award of less than $100,000.  However, you may submit a business plan as well as cash flow calculations if you desire as it may prove helpful during the application review process.

7. I am planning to submit an application in the on-line grants system.  In creating an account, it asks for our organization name.  I am starting a new business but have not filed the paperwork with the state yet for incorporation. Should/can I enter the name my company will have?

  • You can either use the company name you are planning to have OR your name.  If you are awarded a grant you will need to let the grant manager know what entity you would like the grant contract to be written with (company name or your name).  It can be different from the Organization name on your application and will be the entity that will receive the 1099 form.
  • The grant funds will be paid to that entity, so if you choose your new company name, you will need to have a tax identification number at the time we are setting up the contract and financial account.

8.  I am preparing and planning to start a business that adds value to Minnesota agriculture. However, I am still finalizing the financial details and have not filed to be an LLC yet.  Does the financing need to be finalized and does the business need to be registered to be eligible to apply?

  • You are eligible to apply for this grant because you are a current Minnesota resident. A business with a sole proprietor is eligible to apply. The financial details do not need to be finalized to receive an award, but I suggest that you describe in the application your research on obtaining financing and your current status in obtaining financing and establishing an LLC.

9.  Does the measures table in part 4.B. ask for future projections based upon completing the project proposed in the application?

  • Yes.  In addition to entering the current measures (number of employees, sales figures, or number of gallons, pounds, or bushels per year or other length of time if you label it) in the first column, we would like the applicant to enter an estimate of these measures for the year after completing the grant project, and a projection for the second year after completing the grant project.

10.  Please explain "significant regional economic impact."

  • This was taken directly from the legislation that appropriated funds for the Level 2 projects. This is meant to be a high level explanation of the impact to the region (i.e. sales, use of Mn agricultural products, jobs, etc.)

11.  What are the bidding requirements?

  • These are required by the Office of Grants Management depending on the entity. For more information on these requirements, visit the Bidding Requirements page.

Time/Schedule Related Questions

1. What is the available time line for the grant project?

  • Roughly 18 months; the grant agreement will end about 18 months after the start date. The grant agreement will be drafted after the awardee submits all documents requested by the MDA in the award letter.  The awardee can start their grant project after being notified of their award, but will NOT have a binding agreement with the State until all parties sign the grant agreement.  After the agreement is signed, the grantee may start submitting reimbursement requests to the MDA that prove their grant eligible expenditures.

2. When are the grants awarded?

  • All applicants will be notified 6 – 8 weeks after the submission due date whether or not all or part of their application is approved. If your application is approved, you will need to submit some documents before the grant agreement/contract can be drafted.  After the grant agreement is signed, you may start to submit payment requests for reimbursement of 25% of the amount you have paid for Value Added Grant project items listed in your budget, up to the award amount listed in your grant agreement.
  • Grantees usually receive their grant payment 3 – 4 weeks after submitting all the needed payment request documents to the grant manager. If the award is $25,000 or more, we are required to conduct a site visit before the final payment of at least 10% of the grant award is paid to the grantee.

3. What is the date of disbursement for the next Value Added Grant if a business receives a grant award?

  • After notification of a grant award, a grant contract will be drafted up and signed by both the grantee and the state. Then, a grantee can start purchasing items that were included in their grant budget. The grantee will be reimbursed up to 25% of the amount paid for grant eligible equipment or construction work submitted to the MDA. Payment will be issued approximately 3 – 4 weeks after submission of the required documents. A grantee may submit a payment request several times throughout the length of the grant contract.

4. Does the money awarded have to be used for a project within a State Fiscal Year? Does the project have to be completed in that same State Fiscal Year?

  • No; The earliest date that a grantee can start working on their grant project will be the date the awardees are notified in writing that they have been awarded a grant, which will be between 6 – 8 weeks after the submission due date. We will need to get your grant contract completely signed by the end of the State Fiscal Year or before awarding the next round of grants. You will then have approximately 18 months to complete your grant project and request to receive reimbursement payments with grant funds.

Situational Questions

1. A beverage processing facility uses only one Minnesota agricultural product as an ingredient. Does this limit the potential of a grant being awarded to the point that it is not beneficial to apply?

  • Since a Minnesota agricultural product is used as an ingredient to make something that is sold for a profit, the business is eligible to apply for a Value Added grant.
  • All applications submitted in a round are reviewed and scored by an outside committee and the budgets and work plans screened by MDA staff for eligibility with the Commissioner’s Office giving final approval of the results. Other value-added businesses/applicants that source one MN grown ingredient to make their product have been awarded grants. You may wish to consider your answers against the evaluation profile on page 5 to assess your situation. One evaluation category rates the impact the grant project will have on Minnesota agriculture. The grant projects that will result in greater benefits to the sales of Minnesota agricultural products will receive more points in this category.

2. We plan to start a business of cutting up and drying stumpage on land owned by a local paper manufacturing business? Would a kiln for drying wood from these stumps be an eligible grant project?

  • Yes; drying wood in a kiln would add value to the wood if much of it is an agricultural commodity raised in Minnesota. The wood you plan to handle would need to come from MN agroforestry – an agricultural system.  By Statute, agroforestry is the cultivation of short rotation woody crops using agricultural practices to produce timber or forest products, including stumps. It appears that the stumps you plan to harvest are a product of agroforestry and would be eligible for this grant.
  • If the wood would have been harvested out of a regular forest or stand of trees, then it is NOT agroforestry and equipment needed for processing this wood would NOT be eligible for this grant.

3. I plan to start a food distribution company to help businesses market their products. Some of my customers will be local businesses which use ingredients produced in Minnesota. Am I eligible to apply?

  • Yes, if the business takes possession of the food and then distributes it. The review committee will weigh the application according to impact of the business on Minnesota agriculture compared with companies that process a large amount of ingredients grown in Minnesota.
  • Consulting services are NOT eligible grant expenditures but some facility improvements or equipment needed to distribute food made with ingredients grown in Minnesota should be eligible purchases.

4.  I have just started a small food production company.  It is taking off so well that I am seriously considering buying/building my own commercial kitchen to ramp up production, would this be grant eligible?

  • To be an eligible applicant, you need to be a current MN resident or business authorized to conduct business in Minnesota. In addition, your project must also be located in Minnesota.
  • If you are purchasing a commercial kitchen you do not need to have an accepted offer in place to submit an application.  We suggest describing where you are in the process of starting and ramping up your value-added business. You will need to convince the Review Committee of the feasibility of actually starting the expanded business, the sustainability of this business, and your business readiness.
  • If you are building a commercial kitchen the equipment and the facility improvements needed to establish a commercial kitchen would be eligible if the kitchen will be used to process Minnesota agricultural products into value-added products.

5.  We are a USDA certified cooking facility, with a HACCP program in place.  I am in need of some refrigeration/freezer repairs and replacements, to help us meet our HACCP guidelines, and packaging equipment.  Would the grant program cover any of the above listed items? 

  • It is difficult to determine eligibility of a project from a list of equipment items. To determine eligibility, we look at each item in the context of the application. For instance, how a piece of equipment will be used, and what purpose it will serve to add value to Minnesota agricultural products. For funding decisions, we also determine whether the grant project will benefit the value-added business by improving efficiency, expansion, modernization, or profitability and help attain the goals of the grant program. 
  • Cooler walls, refrigeration units and packaging equipment are listed under eligible project examples on page 3 of the Request for Proposals (RFP), so they are likely eligible. Keep in mind is that if a repair, equipment or facility improvement is considered to be routine maintenance for the business, it is ineligible. As seen in the example application, the windows are considered to be routine maintenance.

6.  Are plastic bins eligible equipment for grant funding?

  • To determine eligibility, we would need to know how they will be used, how they will help add value to Minnesota agricultural products, and which goal of the grant program will they address. 
  • The following examples should be eligible: if the plastic bins will be used to distribute/market washed and sorted Minnesota grown vegetables to be able to increase sales from expanding markets; or if they will be used to store (at appropriate temps) washed and sorted Minnesota grown fruit to be able to sell during the winter.

7. In the RFP, one of the project examples includes Season Extension Facilities – but it says ‘item cannot be used for production of an agricultural commodity unless required for food safety’. What is meant by this? Isn’t all season extension meant for production of an agricultural commodity?

  • I will first address the new restriction on Season Extension Facilities. The definition we are using for value-added agriculture is the increase in value of an agricultural product though added processing, segregating, or manufacturing. These are all meant to be equipment or facilities used to process agricultural products (post-harvest). The primary function of a greenhouse does not fit this definition. Also, the second bullet under the “Ineligible Grant Expenses” heading on page 3 of the RFP states that equipment and facilities used for agriculture plant or livestock production are ineligible grant project expenses. Because the primary function of a greenhouse is to aid in the production of crops, it is not an eligible grant project expense in this round of grants.  
  • Season extension can be meant for other things than during production of an agricultural commodity. A cooler or root cellar that will be used to store agricultural crops to make the produce marketable for longer periods of time can be thought of as season extension and would be eligible expenses for this grant. Also, there may be some post-harvest processing that could be done to make a commodity more stable to the elements, so it can be sold and used for longer periods of time can be thought of as season extension. An example of this would be pelletizing hops. If these farmers determine that they will need additional post-harvest equipment or facilities to adequately prepare the crops grown in a greenhouse for market, or to meet a food safety requirement to sell to a new market, these should be eligible grant project items.

8. Can I apply for two pieces of equipment on the same grant or do I need to submit two applications?

  • If both pieces of equipment will be used in the same facility for adding value to the same commodity (butter churn and milk bottling machine or smokehouse and a meat slicer for examples), then we suggest to include both in the same application. If they will be used for two completely different value-added processes and/or different facilities owned by one person/company, then you may submit two applications during a grant cycle (maximum award for both projects together would be $200,000).

9. We own a dairy and would like to do an on-farm project.  Is equipment used to separate manure and make compost or bedding recovery products an eligible grant project?

  • Yes, it could be eligible if it will generate a new and meaningful revenue stream for your farm. In the application you will need to demonstrate that the end product(s) are able to be sold, state the percent of your end product(s) that will be sold vs using it in your operation, and describe the type of markets you plan to sell to. Please note, your application will be strengthened by a letter of support from a potential buyer. 

10. A non-profit organization is planning to start a project that they hope will be able to generate a profit in the near future. The project fits with one of the examples of eligible grant projects listed on page 3 of the RFP.  Is this non-profit eligible to apply?

  • A non-profit organization is NOT an eligible applicant. However, the non-profit may apply on behalf of and act as fiscal agents for eligible individuals or businesses that are set up to make a profit. Please read the specific requirements for these applications on see page 2 of the RFP.

11.  We are a non-profit organization.  We have support letters from producers who can expand their businesses through our proposed grant project.  Can you further explain the sentence on page 2 of the RFP that states, “…non-profit organizations … are not eligible, but may apply on behalf of and act as fiscal agent for eligible individuals or business”?

  • As the applicant/grantee, your non-profit organization would handle procuring the matching funds, pay all invoices related to the project, and receive the grant funds. Emphasis of the need for the project and who will benefit the most from it must be clearly explained in the application. It would ONLY be eligible if the producers, who are for-profit, are the beneficiaries and write letters of support for the application.

12. If we were in a 1-year lease to own, and start that process before our grant would be awarded, would we still qualify for a grant?

  • If part of your grant project is the purchase of a building (land surrounding the building is not eligible) or an expensive piece of equipment, then, you cannot sign the lease to own papers and start making payments toward the purchase of it until after you have been notified of the grant award.  Notifications of the results of the review process are sent approximately 6 – 8 weeks after the submission due date to both approved applicants and applicants that are not approved for a grant award.  If you are awarded a grant and the purchase of the expensive equipment or building is approved, then you can begin your grant project and sign the lease to own papers. 

13.  A Minnesota business entity, who is applying for the grant, is planning to lease a piece of equipment from another entity for 30 years as part of their grant project. The equipment is listed in the RFP as an eligible project and has not been purchased by the other entity yet. Is this an eligible project?

  • The grant project could be eligible if the equipment adds value to Minnesota agriculture and serves the goals of the grant program. The project would be eligible if the grantee will be the eventual owner in a lease-to-own arrangement. In certain scenarios, other arrangements may be acceptable. We suggest that the applicant clearly explains their plan in their application. To be eligible for a grant, the lease-to-own agreement cannot be signed and payments started until after the applicant is notified of their grant award.

14. I am planning on purchasing a grant project to be placed in our building that would be utilized by three, for-profit, food processing facilities, all of which use Minnesota agricultural products as ingredients. We provide business services to benefit the food processors, similar to a food hub. Are we eligible to apply for the grant?

  • A for-profit business is eligible to apply for this grant IF it is involved in the production, processing, or marketing of Minnesota agricultural products. Food hubs and owners of Commercial Kitchens have been eligible and awarded grants in the past as shown in the lists of FY2013 & 14 grantees and the list of subsequent grantees in this link: FY15 grantees.
  • If the business entity is a non-profit or an economic development organization, then they may apply on behalf of the for-profit, food processing businesses (see bottom of page 2 for additional application requirements).
  • The project would be eligible if the equipment or facility improvement adds value to Minnesota agriculture and serves the goals of the grant program as described on pages 2-3 of the Request for Proposal (RFP). 

15. I would like to purchase equipment and place it in a building I do not own with a co-packer business. Would I be eligible to apply for the grant?

  • Yes, if your business is for-profit. The grant project to purchase equipment to manufacture food that contains at least one ingredient grown in Minnesota should be eligible if it will serve the objectives of the grant program, even if your business does not own the building that will contain the equipment.

16. A major next step in the business plan of a new business is the use of engineering services to implement a value-added process. They also need engineering services to conduct further testing and validation of the procedures. Would this be an eligible grant project?

  • The hiring of engineering services is not an eligible grant project. However, the personnel/contractual costs for installation and calibration of equipment purchased as part of a grant project would be eligible for reimbursement.

17. Employee wages and benefits are listed as not eligible for funding with possible exceptions.  Please describe for me the exceptions for which wages and benefits could be an eligible expense?

  • An exception may be an employee that will be working hours specifically on the grant project, such as construction or installation of equipment. These wages may be eligible for reimbursement with grant funds. The grantee will need to keep track of the days and hours their employee worked on the grant project and submit proof of payment for their employee’s grant project work to the MDA. 
  • Regular operational personnel costs are NOT eligible for reimbursement. These ineligible costs include increased salaries paid out to additional staff due to an expansion or increase in processing capacity. 

18.  Are packaging products, such as cans, jars, plastic forms etc. eligible for the Value Added grant? Are website and brand design, uniforms, and advertising costs eligible?

  • No. Supplies, such as packaging containers (unless they are washed and reused many times like metal kegs) are not eligible; but if you were to purchase a packaging machine, it would be eligible for grant funds. Only the costs for equipment, installation and construction labor and materials are eligible for grant funds. The costs to establish a website or brand design, purchase uniforms or pay for advertising your value-added product are not eligible for this grant. A permanent sign or awning placed on your building may be eligible for grant funds.

19. We will be installing an irrigation system and well for an expansion of our orchard.  Would this project be eligible for a Value Added Grant?

  • The irrigation system and a well would not fit the eligibility criteria.  The Value Added Grant program is generally intended for post-production activities; we would consider an irrigation system and well to be primarily related to the production of fruit.

20. I am considering adding some technology to reduce my cost of production to make my business more competitive (renewable energy, computer, etc.). Is my project eligible?

  • While reducing your cost of production is admirable, it does not address the goals of the grant to increase sales of Minnesota agricultural products by diversifying markets, increasing market access and increasing food safety. This project does not appear to be eligible. We suggest that you contact the Rural Business Service staff at your regional USDA Minnesota Rural Development office.  They offer Renewable Energy Production Grants and loans and Energy Efficiency Loans and Grants as well as other financial assistance programs to rural businesses.

21.  I am going to put up a barn this spring to finish and market a type of livestock. Would this project be eligible for the Value Added Grant?

  • From this information provided, your project does not sound like it would qualify for the MDA Value Added Grant but it does sound like it fits the MDA Livestock Investment Grant.  On the bottom of page 3 of the RFP, it states that equipment used for agriculture production is not eligible for these grant funds.  This requirement extends to facility improvements, such as barns, manure pits, fences etc. used to raise and care for livestock up until they are at the slaughtering facility.
  • To be eligible for this grant, the project (equipment or facility improvement) needs to be used for the process of adding value to an agricultural product. Examples would be the process of slaughtering the live animal, preparing cuts of meat, and making sausage or sliced bacon.
  • For more information regarding the Livestock Investment Grant, please contact David Weinand at David.Weinand@state.mn.us or 651-201-6646

22. I plan to construct a hen house and a work room.  The eggs will roll on a conveyor belt from the house into the work room to be washed, packed and stored in a walk-in cooler. What parts of this project would be eligible for the Value Added Grant?

  • The actual hen house would not be eligible for a Value Added Grant but could be an eligible MDA Livestock Investment Grant project. The conveyor belt, the construction of the workroom and the equipment in the work room to wash, pack and cool storage would be eligible. These parts of your project would be considered the “value-added agriculture” side of your business.  We suggest that you address food safety in your application.
  • For more information regarding the Livestock Investment Grant, please contact David Weinand at David.Weinand@state.mn.us or 651-201-6646

23. An entrepreneur is planning to start a business of raising an unconventional livestock in Minnesota and using parts of these animals to make a food product.  Is he/she eligible to apply for a Value Added Grant?

  • One way to achieve the goal of increasing the sales of Minnesota agricultural products is to purchase equipment or conduct facility improvements to start a value-added business. An outcome should be to improve food safety or diversify yours or other producer’s markets or expand your access to markets. So, IF your food processing facility is properly licensed and the majority of the animals you process are raised in MN, then your for-profit business would be eligible to apply.
  • Equipment or facility improvements used to help grow/raise and care for the livestock are NOT eligible grant projects.  These would likely be eligible for a MDA Livestock Investment Grant, which is administered by our Division. Equipment or facility construction purchases used to the process the animal part ingredients, package, properly store, or market the processed product(s) would be eligible.
  • For more information regarding the Livestock Investment Grant, please contact David Weinand at David.Weinand@state.mn.us or 651-201-6646

24. I am starting a CSA this summer and plan to apply for a Value Added Grant. Also, I will be planting strawberries this spring and would like to apply for a Specialty Crops Grant. Would it be better if we applied for one grant for funding of both projects or submit two separate grant applications?

  • The Specialty Crop Grant program is completely separate from the MDA Value Added Grant program. If you intend to apply for both grant programs, you must submit separate applications to each program. Please look at the funding goals of both programs to help you decide what aspects of your projects may be eligible for funding under each program.
  • For information regarding the Specialty Crop Grant, please contact Ann Kuzj at ann.kuzj@state.mn.us or 651-201-6028.

25.  I would like to install raised gardens and grow vegetable produce at the school where I work.  I would like to involve the community and teach the children where our food comes from.  Is this an eligible grant project?

  • From this description, this project does not appear to be eligible for a Value Added Grant. On the bottom of page 3 of the Request for Proposal, it states that equipment used for agriculture production, such as planting, watering, weeding, and harvesting equipment, is not eligible for these grant funds. This extends to facility improvements, such as construction of garden boxes. 
  • For information for your school garden needs and for lesson ideas, please contact Sue Knott at Sue.Knott@state.mn.us or 651-201-6486.

26. We are a member owned consumer co-op that are planning to start a food co-op to give us a new market for our agricultural products. Could the co-op or the grower association apply? Would display coolers and freezer, storage space upgrades to hold product, or juicing equipment be eligible?

  • Cooperatives are eligible applicants; in your case, if the cooperative will be selling agricultural products for the mutual benefit of the members, that business entity would be eligible to apply for a Value Added Grant.  What makes this proposal be in the grey area of eligibility and meeting the objectives of the grant program, is that it is a consumer cooperative. The Value Added grant program does not want to go down the path of awarding Value Added Grants to grocery stores (please ask our grants staff about the new Good Foods Access Grant Program, which will award grants to grocery stores). So, if the cooperative is the applicant, you will need to convince the review committee that the equipment you request will benefit the local growers much more than the other suppliers of the consumer coop. This may be a hard sell for the display coolers and freezer, as these could be used for anything at the co-op grocery store. It may also be difficult to justify to the application reviewers that the storage space upgrades for the co-op grocery store are largely for the growers’ benefit.  The reviewers should understand the explanation that the juicing equipment will provide the means to purchasing more vegetables and fruit from local growers.
  • The growers’ association/farmers’ market association would not be an eligible applicant because they are a non-profit cooperative, However, this entity could apply on behalf of and act as the fiscal agent for the grower members (procure the applicant matching funds, pay all the invoices related to the project, and receive the grant funds). To be eligible to apply for this grant, the farmers’ market association would need to identify the growers that would benefit from the grant project and write the application from their perspective.  The applicant would also need to submit letters from a few of the grower members, who describe the benefit of the grant project to their farm. The applicant could then describe how they would make this project work with the consumer co-op and that the equipment and facility improvements would be housed at the consumer co-op (which can be eligible). In this way, it may be easier to justify the need for and that the growers will benefit from the purchase of display coolers and freezer, and the storage space upgrade to aggregate the growers produce to the reviewers. The purchase of the juicing equipment by the association should be relatively easy to align with the objectives of the grant program. If you go this route, we suggest that you provide some details of the business arrangement between the two co-ops and how the grower members will benefit from such an arrangement.

27.  Can Grant funds be used to purchase an existing facility? What if it is owned by a public entity?

  • If the proposal is to purchase a building with the same existing business as the applicant’s (the building will be used for the same purpose), then it would not be an appropriate project for this grant because there is not a value-added component but just a transfer of ownership. An exception would be if the business has been closed and the building left vacant for some time.
  • Examples of building purchases that are eligible for grant funds are: a warehouse that will be retrofitted to make a food hub for washing, cold storage, processing, and packaging to be able to market local produce; an empty creamery that will be transformed into a value-added food processing facility (if Minnesota agricultural products will be an ingredient); a barn that will be retrofitted into an inspected on-farm slaughter facility.
  • It does not matter who will sell the building to the grantee, whether it is from a public or private entity.  The land directly under the building would be included in an eligible project, but the rest of the lot would not.  So those costs would need to be separated from each other in the application.