In this article, we will take a detailed look at how to write a business plan for obtaining a grant in agriculture. In previous articles: «How to get a grant?» and «Business plan for obtaining a grant», we considered the general questions:
- what is a grant, grant support for small and medium-sized businesses and
- How to write a business plan for a grant.
Grants for start-up farmers, unlike grants for small and medium-sized enterprises, are provided by the Ministry of Agriculture (and not by the Ministry of Economic Development). Accordingly, the allocation of subsidies for agriculture is carried out within the framework of completely different programs.
Before proceeding with the analysis of the main features of writing a business plan for obtaining a grant in agriculture, you need to understand:
- in which regions of the Russian Federation there is grant support for agriculture;
- basic requirements for the Grant Applicant;
- for what purpose it is allowed to direct the funds of the grant;
- What documents must be submitted by the Applicant to participate in the competition for a grant?
In which regions does the Startup Farmer Support Program (hereinafter referred to as the Program) operate?
Let’s start with the fact that not all regions have the Program, but only those that have submitted their Programs for approval to the Ministry.
As of 2014-2017 There are two Programs within the Ministry of Agriculture:
— support for beginner farmers — from the Republics of Adygea, Bashkiria, Ingushetia, Karelia, Mari El, Mordovia, Tyva, Khakassia; Kamchatka Territory; Amur, Vologda, Kirov, Novgorod, Rostov, Ryazan, Tver, Tomsk, Yaroslavl regions; Chukotka Autonomous Okrug, etc.
— development of family livestock farms — from the Republics of Adygea, Bashkiria, Ingushetia, Mari El, Mordovia, Tyva, Khakassia; Kamchatka Territory; Amur, Vologda, Kirov, Novgorod, Rostov, Ryazan, Tomsk, Yaroslavl regions, etc.
Thus, in order to establish whether there is a program to support beginning farmers or the development of family livestock farms in your region, territory or republic, you need to contact local Ministry of Agriculture.
Who is eligible to apply for an agriculture grant?
In Program terms, the Applicant is eligible to receive support. Applicant — a citizen who submits an application to the competition commission, who:
- did not carry out entrepreneurial activity during the last three years;
- permanently resides or undertakes to move to a permanent place of residence in the municipality;
- was not previously a recipient of a grant and (or) one-time assistance;
- has a secondary specialized or higher agricultural education;
- is the head of a household that falls under the criteria of a micro-enterprise established by the Federal Law of July 24, 2007 No. 209-FZ “On the Development of Small and Medium-Sized Businesses in the Russian Federation”;
- has its own funds for the implementation of the project for the creation and development of the economy, through which it undertakes to pay at least 10% of the requested grant amount;
- has a business plan for the creation and development of the economy;
- has entered into preliminary agreements for the sale of its own agricultural products in the amount of at least $30,000;
- has a cost plan for the creation of a production base indicating the name of the acquired property, work performed, services rendered, their quantity, price, sources of financing.
What is the purpose of the grant funds in agriculture?
Grant funds can be provided only strictly for the purposes established by the Program. Usually this:
- acquisition of land plots from agricultural land;
- development of project documentation for construction;
- acquisition, construction, repair and reconstruction of industrial and warehouse buildings;
- construction of roads and access roads to production and storage facilities;
- connection of industrial and warehouse buildings to engineering networks;
- purchase of farm animals;
- purchase of agricultural machinery and equipment;
- purchase of seeds and planting material;
- purchase of fertilizers and pesticides.
From the presented list it follows that the grant funds can be directed to a fairly wide range of investment costs. The priority for financing with the help of grant support funds is the purchase of agricultural machinery, animals, planting material.
Documents to be submitted for participation in the competition for a grant
An applicant wishing to participate in the competitive selection submits the following documents to the Ministry:
- application for participation in the competitive selection;
- a copy of the passport of a citizen of the Russian Federation;
- a copy of the certificate of state registration of the applicant as an individual entrepreneur — the head of a peasant (farm) economy;
- a copy of the diploma of higher (secondary special) education in agriculture;
- a copy of the work book;
- business plan for the creation and development of the economy;
- preliminary contracts for the sale of own agricultural products in the amount of at least $30,000;
- a plan of expenses for the creation of a production base and (or) a plan of expenses for household amenities indicating the name of the acquired property, work performed, services provided, their quantity, price, sources of financing;
- a document confirming the availability of own funds for the implementation of the project to create a farm in the amount of at least 10% of the cost of each item of the acquired property;
- copies of reports on the production and sale of agricultural products in the forms approved by the Ministry of Agriculture of the Russian Federation;
- an extract from the household book of a rural settlement on the availability of livestock and fixed assets on the date of application.
It can be seen from the list of documents that in addition to a number of documents relating directly to the Applicant, the KFH, it is necessary to provide a business plan.
Creating a business plan for obtaining a grant in agriculture has its own characteristics.
What should a business plan include in order to receive a grant in agriculture?
Generally speaking, a business plan should contain the following key information:
- proposals on the procedure for the formation of the production base of the economy;
- proposals to increase the volume of agricultural products sold;
- proposals to create at least one job on the farm for every $500,000 in grant.
For more information about the structure of the business plan, its content, read the article: » Business plan for receiving a KFH grant «.
Can I refuse admission to participate in the competition for a grant?
The grounds for refusing to allow an applicant to participate in the competitive selection are:
- submission of documents late or submission of documents not in full;
- non-compliance of the applicant with the requirements.
In conclusion, it should be noted that it is simply necessary to receive a grant to support your agricultural business.
Current Programs allow you to receive support in the form of grants in the amount of up to $1,500,000.
But the process of preparing documents for participation in the competition is a laborious procedure. In order to be successful and get the necessary support, it is better to turn to specialists.