NOTICE: Due to an issue with our grant application software, we are extending the deadline to
4:00 pm Central Time on Monday, March 20, 2023.

Here are some common questions about the AGRI Value-Added Grant. If you have questions that are not addressed here or the Request for Proposals (RFP), email them to with "AGRI Value-Added Questions" in the subject line. We will post all questions and answers on this page.

Organizational eligibility

Q. I am starting a business that will create a new packaged product for households using some Minnesota grown ingredients. I would like to apply for a grant to purchase equipment. Am I eligible for this grant?

A. Yes, based on the information you provided, you are eligible to apply.

Q. I’m a hemp processor and looking to start a commercial kitchen for myself and other small cannabis processors. Would this be eligible?

A. As a processor, you are eligible to apply for funding to pay for equipment that supports your hemp processing business and the shared commercial kitchen space. Your proposal should show the impact the equipment/physical infrastructure will have on your processing business as well as that of other small processors. For more information specific to hemp in food products, consult our Hemp in Food FAQs.

Q. Am I eligible to apply even though I have not completed my previously awarded AGRI Value-Added grant?

A: You are eligible to request new funding for additional equipment that addresses all eligibility requirements if your current grant is in good standing.

Q: What is the definition of Minnesota companies to be considered for value-added opportunities? For example, would very large companies located in Minnesota be considered eligible or are only smaller processors eligible?

A: All value-added companies that have processing capabilities in Minnesota are eligible to receive funding. Processors need to be able to demonstrate that they’re sourcing from Minnesota producers to have a competitive AGRI Value-Added Grant application.

Q. We’re an equipment manufacturer; are we eligible to apply for this grant?

A. No; you are not eligible. Value-added processors need to apply for funding to purchase the equipment from you.

Q. We are starting a new livestock processing business. Are we eligible to apply as a start-up?

A. Yes, new businesses are eligible to apply. Start-up costs such as inventory and working capital are not eligible, but you could apply for funding for equipment and related physical upgrades.

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Project eligibility

Q. May Tribal entities use this money toward supporting local gardening and food production?

A. Food production/gardening itself is not eligible but adding value to the resulting agricultural products is eligible. As indicated on page 3 of the RFP, “For the purposes of this grant, value-added is defined as the addition of value to an agricultural product through processing.”

Q. If our greenhouse production does not include any food product, would that exclude our eligibility for this funding opportunity?

A. The AGRI Value-Added Grant opportunity is open to processors of agricultural products beyond food but is limited to adding value through processing. As noted on page 7 of the RFP, expenses for general use equipment and equipment or facilities used for agriculture plant or livestock production (e.g., watering systems or harvesting equipment) are ineligible.

Q. Would equipment used at a soybean crush plant be eligible for this grant?

A. Yes, equipment used at a soybean crush plant is eligible for a Value-Added Grant.

Q. Can I use grant money to buy used equipment?

A. Yes, used equipment is an eligible expense. If vendors are not identified at the time of application, purchases may be subject to the State’s bidding requirements. Reimbursement for used equipment requires the same proof of purchase and proof of payment documentation as new equipment, so make sure the seller provides adequate documentation at the time of sale and payment.

Q: Am I able to submit an application for equipment already paid for?

A: No, as indicated on page 7 of the RFP, expenditures incurred before a grant contract agreement is signed by all parties are ineligible.

Q: Is a greenhouse eligible to apply for doubling production and acres with started plants?

A: No, as indicated on page 7 of the RFP, equipment and facilities used for agriculture plant or livestock production are ineligible.

Q: My proposed project involves purchasing new equipment that will be utilized in a newly constructed facility. In order to inform the design of the new facility, we plan to first purchase the equipment and use it in a leased commercial kitchen to determine the ideal space configuration. Is the cost of the lease for this phase of the project eligible?

A: Leased commercial kitchen space is not an eligible expense.

Q: We are working on a way to recycle packaging that is used to transport agricultural products. Would this type of project be eligible for an AGRI Value-Added Grant?

A: No, this would not be eligible for a grant since the input (i.e., the packaging being recycled) isn’t a Minnesota farm product. However, if you were creating packaging using Minnesota agricultural products, it would be eligible.

Q. I am looking for clarification if grain inspector costs and land rent are eligible?

A. Operating costs are not eligible. This includes grain inspector costs and both the purchase and rent of land.

Q. Can shipping charges can be included in the grant request?

A. Yes, shipping charges can be included in the grant request in addition to contractor costs and materials for installation of approved equipment including plumbing, drainage, venting, and electrical work.

Q. My business partner and I are starting a new firewood business. We plan to sell small bundles and larger loads to residential customers. To do this, we will need to get a kiln up and running and also some firewood processors, loading equipment, and a storage shed, among other things. I am wondering if you see a fit for these needs in the AGRI Value-added Grant?

A. Firewood can work as a value-added product. As with all projects it would be considered based on the merits of the application and against the scoring criteria laid out in the RFP. Note that building purchases are an ineligible expense. We also encourage you to carefully read the firewood information provided on our website.

Q. A new construction will be a joint facility (50% restaurant, 50% production). A cooler will be shared between restaurant and wine production. Is it ok for 50% of the cooler costs to be applied for under this grant? Understanding that the remaining 50% is not eligible for a funding request or as matching dollars, as it is related to the restaurant? The cooler is paramount for the safety of the unpasteurized products in the wine making process.

A. You are correct that restaurants are not eligible for the AGRI Value-Added Grant. Given that the cooler will be shared between restaurant and wine production, it would be OK to apply for 50% of the cooler costs. The grant would reimburse up to 25% of half of the cooler costs.

Q. Are you allowed to combine two smaller projects into one grant application or does it all have to be related to the same project? For example, if a company wanted to get both packaging equipment and oil processing equipment, could they combine the two into one application? 

A. Yes, one application can be submitted for both packaging equipment and oil processing equipment. The other option is to submit two applications, with the packaging equipment in a separate application from the oil processing equipment. Note that you will only be able to receive one FY23 AGRI Value-Added Grant.

Q. Can this grant be used to assist with the purchase, scale up, or future expansion of a dairy processing business?

A. This grant program is not intended to be used for the purchase of an existing business; however, the grant could be used to scale up or expand a business by assisting with purchasing equipment and making physical improvements. The grant cannot be used for beginning inventory costs, start-up costs, beginning working capital costs, or license fees.

Q. Is it correct that agriculture equipment such as tractors or other harvesting equipment is ineligible?

A. Yes, equipment and facilities used for agriculture plant or livestock production are ineligible for this grant.

Q. We are planning to purchase equipment that will add efficiencies to getting agricultural products into and out of storage on the farm. Would this general type of equipment be eligible?

A. For the purposes of this grant, we consider “value-added” as the “addition of value to an agricultural product through processing.” While we strictly exclude equipment that contributes to growing and raising agricultural products, we don’t explicitly exclude equipment used after the product is harvested. The equipment is eligible if it will add value to Minnesota agricultural products through production capacity, market diversification, or market access for value-added products. We also encourage you to carefully consider the Project Evaluation Profile in the RFP while determining if you should apply.

Q. I am starting a business that will create a new packaged product for households using some Minnesota grown ingredients. I would like to apply for a grant to purchase equipment. Am I eligible for this grant?

A. Yes, based on the information you provided, you are eligible to apply.

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

A. You may apply for the grant, but any equipment, installation, or construction started before a grant contract has been signed by all parties will not be eligible for reimbursement.

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

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

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Q. The RFP states that "documentation for at least 75% of the total project cost as a cash match" must be provided—does this need to be provided at the time of application?

A. In the budget narrative of the application, describe your plans to provide the 75% cash match. In the optional attachments for that section, you may attach relevant documentation to demonstrate the match, but don't include anything with sensitive personal data (e.g., account numbers, social security numbers, etc.). If awarded a grant, you will demonstrate the cash match via the proof of payment needed to receive reimbursement.

Q. Is there a match requirement? Can I use grant funds from another Minnesota state agency as part of my matching funds? Can donated items or volunteer time be used?

A. You are required to show that you have 75% of the total grant project costs available to use as matching funds. You also cannot use funds from the State of Minnesota as the match for the grant. We cannot accept in-kind matches (non-cash donations of goods or services that can be given a value).

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Q. Do we need to have three agricultural impact letters, or will two be sufficient?

A. The letters are optional but typically strengthen an application. We will accept up to three letters, and many strong applications include just one or two.

Q. Regarding the "Priority area- Does your project improve food safety?" question.  What is the intent and/or context of this question?

A. You may approach this question by responding with how your project will address food safety requirements, and if applicable, any participation in voluntary food safety programs.

Q. My proposed project includes enough eligible expenses to qualify for the maximum request amount of $150,000, but I understand very few requests are funded at that level. Would I have a better chance of getting funded if I don’t include the entire project in my request?

A. The fact that few grants are awarded above $100,000 is a function of limited funding and doesn’t reflect that larger requests are less competitive because of the amount of the ask. A large request for a strong project may be partially funded, and so you are encouraged to request what you need to successfully implement your project, as long as you follow the guidance in the RFP.

Q. I am filling out the grant application, but I am missing some criteria like the amount of product we already use and the amount we would increase. I also have financing for the project but do not have a letter of commitment yet, and am running out of time.

A. Provide the best information that you can with the time that is left to submit your grant application and explain where things are at with financing at the time of submitting the application, with or without the commitment letter.

Q. The RFP states that “Business plans are required to be submitted with the application for all requests over $100,000 and optional for all other requests.” Does the $100,000 requirement for business plans refer to the total project cost or the amount of grant funds requested from MDA?

A: The $100,000 requirement for business plans refers to the amount of grant funds requested from MDA.

Q. 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?

A. You don’t need to choose vendors prior to submitting your application. However, you might want to choose the vendor for items costing more than $10,000 before we draft the grant contract. If we write the vendor into the contract, you won’t need to collect and submit bids for your purchases from that vendor.

Q. I applied for a previous AGRI Value-Added Grant. Will my old application automatically be considered for this year?

A. No, you will need to submit a new application for the FY23 AGRI Value-Added Grant but are welcome to edit your application information from the last time you applied for this grant.

Proposals submitted for the FY23 AGRI Meat, Poultry, Egg, and Milk Processing (MPEM) Grant in fall 2022 will automatically be considered for the FY23 AGRI Value-Added Grant. The FY23 AGRI MPEM applications may also be updated, upon request.

Q. What are some of the differences between the AGRI Meat, Poultry, Egg, and Milk Processing Grant and the AGRI Value-Added Grant?

A. While the Meat, Poultry, Egg, and Milk Processing Grant is an offshoot of the Value-Added Grant, review the Value-Added Grant RFP and application carefully since there are some differences including the timeline, priority areas, and cash match requirements. The AGRI Meat, Poultry, Egg, and Milk Processing Grant is designed for the named livestock products, while the AGRI Value-Added Grant is open to any value-added Minnesota agricultural product.

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

A. Here are a few suggestions:

  • If applicable, review your previous applications.
  • Discuss your proposal with your local Economic Development Director or staff at your regional Small Business Association, Initiative Foundation, or Farm Service Agency.
  • If you want to review the application of a previously awarded grantee, you must request this in writing.
  • Read the application questions carefully; make sure you answer all of them.
  • Submit accurate budget information.

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

A. Small Business Development Centers, local Economic Development Associations, and Regional Initiative Foundations have resources to help with grant writing. Some applicants have worked with teachers or professional grant writers to help them complete their application.

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General program

Q. May deposits be placed on equipment prior to grant award, then refunded prior to full purchase of equipment following grant award? This question refers to the need to reserve equipment due to supply chain issues, that proper timing of acquisition may be achieved, within the parameters of the grant.

A. It would not be appropriate to make a deposit in anticipation that it would be refunded so that the entire cost of the equipment would be eligible.

Q. I see that award notification will be in April or May and negotiations begin at that time. At what point are expenses able to be incurred? Our project likely won’t start until August or September; however, we anticipate that we will have to purchase the equipment prior to it being shipped. The piece of equipment should be shipped in June.

A. We are unable to reimburse for any work that is performed or expenses incurred prior to the start date of the contract. If a grant is awarded, it will be important that the dates on the proof of purchases and proof of payments are no earlier than the date the contract is fully signed, which will be in May or June.

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

A. Yes, you will need to pay taxes on the grant funds in the year that you receive them.

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