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Pennsylvania Doubles Farm Vitality Grant Funding to Support Long-Term Farm Planning

Pennsylvania Doubles Farm Vitality Grant Funding to Support Long-Term Farm Planning

Pennsylvania has increased its Farm Vitality Grant funding from $7,500 to $15,000. The Farm Vitality Planning Grant Program helps fund professional services to support farmers in planning for the future of their operations. These services include business and management strategies, succession planning, expanding financing and other projects related to the long-term success of Pennsylvania’s farms.

What Types of Projects Do Farm Vitality Grants Support?

The grant program aims to strengthen the long-term viability of Pennsylvania farms by supporting business planning, simplifying smooth ownership transitions, encouraging strategic growth and diversification of agricultural production and developing  a team of financial and technical experts to assist farmers. Since its inception in 2019, under the PA Farm Bill, the program has awarded grants that have supported over $2.8 million in project and financial planning. Approximately 60% of the grants have helped farm families with succession planning. The grant supports the following projects:

  • Expanding financing for growth
  • Ensuring farms with conservation easements remain profitable and protect public investments
  • Developing business and management strategies to enhance a farm’s success
  • Diversifying production with new agricultural plans
  • Transferring ownership and operation within the family
  • Transitioning farm ownership and operation to new or beginning farmers

Funding Opportunities

Farm Vitality grants are reimbursement-based and cover 75% of eligible project costs. Grants are based on available funds and repayment is based on approved costs. These costs are for approved projects by the applicant during the grant’s fiscal year. For the 2024-2025 fiscal year, the Department of Agriculture will award up to $500,000 for program grants.

Eligible Costs

The grant covers costs related to working with professionals in agricultural business, transition and succession planning, including assistance with related documentation. Eligible expenses include:

  • Accountants, business consultants or financial planners
  • Appraisers for succession planning
  • Attorneys for preparing and filing legal documents, as well as setting up new entity with the next generation
  • Bookkeeping software, such as QuickBooks®
  • Business planning services
  • Profitability and feasibility
  • Facilitator to mediate or lead farm succession meetings and communications
  • Financial guidance
  • Financial statements, such as income statements, cash flow statements and balance sheets

Ineligible Costs

Despite the variety of eligible expenses, certain costs are specifically excluded from grant funding. Ineligible costs include:

  • Any taxes, including those related to property transfers
  • Capital improvements, including the purchase of land or a farm, construction or remodeling of facilities or buildings and the purchase, repair or maintenance of equipment or conservation practices
  • Conservation, agricultural erosion and sedimentation, manure management and nutrient management plans
  • Insurance premiums and relates costs
  • Meals, mileage or any other travel expenses
  • Surveying and subdivision costs even if tied to succession planning

Combining Farm Vitality Planning Grants with PA Farm Bill Grants

Farm Vitality Planning Grants can be combined with other PA Farm Bill programs, including low-interest loans and tax incentives to aid in planning and financing farm transitions. The following are other programs that can be combined with the grant:

  • Beginning Farmer Tax Credit Program – Provides tax credits as an incentive for individuals who sell or rent agricultural assets to beginning farmers. An agricultural asset owner may qualify for a tax credit equal to 5% of the lesser of the sale price or fair market value of the agricultural asset, up to a maximum of $32,000; or 10% of the gross rental income up to the third year of the rental agreement, up to a maximum of $7,000 per year.
  • Beginning Farmer Realty Transfer Tax Exemption – Exempts qualified beginning farmers from paying realty transfer tax when purchasing preserved farmland. This exemption applies to transfers of real estate subject to an agricultural easement under the Agricultural Area Security Law.
  • Next Generation Farmer Loan Program – Offers federal tax-exempt financing to reduce a farmer’s interest rate for capital purchases such as the purchase of farmland or agricultural machinery and equipment. The maximum loan amount is $667,000 with no more than $62,500 being used toward the purchase of used equipment.

Farmers can apply for grants online through the Department of Community and Economic Development’s single electronic application. For additional planning resources, farmers can visit the Agricultural Business Development Center.

If you have any questions on discussing accounting and advisory services for your agribusiness, please contact the advisors at Brown Plus today!

Posted In: Agriculture | Insights

About the Author - Kim Yordy, CPA

Kim is an Audit Senior Manager at Brown Plus with over 13 years of public accounting experience. She specializes in providing audit and review services to a variety of industries, including nonprofit organizations, agricultural entities and construction companies. Kim is primarily responsible for the planning, fieldwork and wrap-up of the attestation services that she provides.

Kim received her Bachelor of Science degree in Accounting and Business Administration from Grace College.

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