While USDA and other organizations have some grant opportunities for farmers and entrepreneurs to conduct innovative on-farm research and/or develop value-added enterprises, you'll likely be looking at a loan versus a grant to finance the start-up of your farm business.

USDA Rural Development sponsors a value-added grant program that helps farmers expand their markets for value-added products. However, the grant is limited to conducting feasibility and market analysis of the value-added product and working capital directly associated with marketing the product (i.e., office equipment, utilities, and legal and accounting fees) and cannot be used to pay for the purchase, rent, or installation of equipment, facilities, or agricultural production. Additional grant opportunities are offered to farmers and producer groups from time to time, but in most cases these are oriented to enhancing farm operations somehow and not to finance start-up. So, while grants can advance your business and don't need to be repaid, they do come with obligations and are not geared to start-ups.

If you are looking to start a farm business, a number of local and national loan funds exist. On the national level, the USDA Farm Service Agency (FSA) offers a number of loan programs to farmers. For more information, visit its Web site at Farm Service Agency. An excellent overview of what is avaiable through FSA has been prepared by the Center for Rural Affairs. It not only offers the definition of a beginning farmer, but it also provides background information on loan options and ways to secure technical assistance. Check out the Center's site' on beginner farmer programs at: Beginner Farmer Programs .

In addition, Farm Credit Services of America offers a "Young and Beginning Program" that offers financial benefits for less-established producers. It is targeted to producers age 35 or younger, or with 10 years experience or less.
Information can be found on its website:
www.fcsamerica.com.

On the local level, some states offer agricultural bond programs (also referred to as Aggie Bond Programs) and other loan funds that offer low interest loans to beginning farmers. In addition, some farmer and/or local business associations may offer peer lending programs that may be open to help finance farm start-ups. The key with all these programs is to have a thoughtful business plan prepared for your farm business. Check this site out to find out what program may be available in your state: ATTRA-National Sustainable Agriculture Information Service, summarizes assistance available from federal programs, including federal grant programs to "foster innovative enterprises in agriculture and forestry in the United States."

Additional resources include:
• Sustainable Agriculture Research and Education. These grants are focused on conducting research that will develop, refine, and demonstrate new sustainable techniques and to explore innovative ideas developed by farmers who have established crop or animal products.

• Building Better Rural Places. This guide addresses program resources in community development, sustainable land management, and value-added and diversified agriculture and forestry.

You also might find something useful at Grants for Individuals—Agriculture-Forestry-Horticulture.

At times, state Departments of Agriculture may have special grant programs for specific target ventures or producer groups. Visit your state department's Web site or contact a representative.