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 MDA.AGRIGrants@state.mn.us with "AGRI Value-Added Questions" in the subject line. We will post all questions and answers on this page.
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.
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.
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).
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.
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.