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Frequently Asked Questions 2501 Program

Outreach and Assistance for Socially Disadvantaged and Veteran Farmers and Ranchers Program (also known as “the 2501 Program”)


Q. Who is eligible to apply for grants under the 2501 Program?

Higher education institutions, nonprofit organizations, and non-governmental community-based associations or organizations that provide agricultural education or agriculturally related services to underserved or veteran farmers and ranchers in their region are eligible and may apply for a grant under the 2501 Program, as defined in 7 U.S.C. 2279. Individuals are not eligible.

Examples of eligible entities that may apply for a 2501 grant are:

  • 1890 Land-Grant Institutions, as defined in 7 U.S.C., section 7601
  • 1994 American Indian Tribal Community Colleges
  • Alaska Native Cooperative Colleges
  • Hispanic-serving post-secondary educational institutions
  • Other accredited post-secondary ag-related educational institutions
  • Community-based and nonprofit organizations (including tribal organizations)
  • Indian tribes providing agricultural education or other agricultural services to underserved or veteran farmers and ranchers in their region.

Q. How is funding awarded under the 2501 Program?

Funding will be awarded based on ranked scores comprised of the three categories described below. The OPPE has discretion to allocate funding among the three categories based upon the number and quality of applications received.

Category #1: Eligible entities described in Sections III.A.2, III.A.3, and III.A.4 (1890 Land-Grant colleges and universities, 1994 Tribal Land-Grant, Alaska Native and American Indian Tribal colleges and universities, and Hispanic-Serving Institutions of higher education).

Category #2: Eligible entities described in Sections III.A.1 and III.A.6 (i.e., nonprofit organizations, community-based organizations, including a network or a coalition of community-based organizations, Federally-recognized Indian Tribes (as defined in 25 U.S.C. §5131), and National Tribal organizations).

Category #3: Eligible entities described in Sections III.A.5 and III.A.7 (i.e., all other institutions of higher education including 1862 colleges, nonprofit organizations without a 501(c)(3) status certification from the IRS, and an organization or institution that received funding under this program before January 1, 1996).

Q. What groups are defined as socially disadvantaged (underserved) under the 2501 Program?

Under Section 2501 of the Food, Agriculture, Conservation and Trade Act of 1990 (FACT Act), also known as the 1990 Farm Bill, P.L. 101-624, a socially disadvantaged group is defined as: A farmer or rancher who is a member of one or more of the following groups whose members have been subjected to racial or ethnic prejudice because of their identity as members of a group without regard to their individual qualities, 7 U.S.C. § 2279(e). Groups include, but are not limited to:

  • African Americans
  • American Indians
  • Alaskan Natives
  • Asians
  • Hispanics
  • Pacific Islanders
  • Refugees and Immigrants belonging to any of the groups named above.

Under the 2501 Program definition of “socially disadvantaged,” women as an individual group are not considered an underserved group unless they fall into one of the groups identified above.

Organizations may either work with or have worked with underserved or veteran groups for at least 3 years. Applications do not need to address both groups in order to receive 2501 grant funding.

Q. What is the definition of veterans?

The term veteran farmer or rancher (VFR) means a person who served in the United States Army, Navy, Marine Corps, Air Force, and Coast Guard, including the reserve components thereof, and who was discharged or released under conditions other than dishonorable and who also meets the definition of beginning farmer or rancher (BFR). The VFR must: a) not have operated a farm or ranch; or b) not have operated a farm or ranch for more than 10 consecutive years. For a legal entity or joint operation to be considered a VFR entity, all members must meet the definition of VFR.

Q. What qualifications/credentials/documentation must eligible entities possess to be considered eligible to apply for grants under the 2501 Program?

Applicants must have the financial, legal, administrative, and operational capacity to carry out the objectives of the federal grant. They must have at least 3 years of documented evidence in providing agriculturally related education, training, or services to underserved or veteran farmers and ranchers.

Nonprofit organizations must provide a current 501(c)(3) of the Internal Revenue Code of 1986 certification in their application or applicants awaiting certification of nonprofit status by the IRS must submit documentation in their application. Nonprofit organizations that do not have 501(c)(3) certification from the IRS must compete in Category 3. Nonprofit organizations must also submit Articles of Incorporation dated at least three years prior to application and must not engage in activities prohibited under Section 501(c)(3) of the Internal Revenue Code of 1986.

Documentary evidence examples may include:

  • Dated Articles of Incorporation showing the purpose for which an organization is organized
  • Dated Business Plan (condensed version)
  • Dated Letters of Intent and Partnership Agreements with other nonprofit organizations, universities, or other non-Federal community-based organizations
  • Dated Grant awarding documents from state or federal agencies
  • Organizational Historical Documents or Performance Records
  • Curricula and/or brochures stating organizational Mission, Vision, and Value Statements in combination with organizational documents.
  • Curricula used in the past


Q. Can existing grantees apply for a subsequent 2501 grant year after year?

Beginning with the implementation of the 2018 Farm Bill, organizations that are currently 2501grant recipients must be in the final year of their existing project, make every effort to complete their current project, expend all funding, and be ready to close their existing grant before being eligible to reapply. Current 2501 grant recipients with a Period of Performance that extends beyond 90 days of the current fiscal year are not eligible to reapply (this is not applicable to grantees with a no-cost extension). For example, current 2501 Grant recipients must complete their projects by the end of the current calendar year to be eligible to reapply.

Q. How are 2501 applications evaluated and how many discretionary points may be given to applicants?

All applications that meet the initial eligibility screening criteria are reviewed and scored by at least two members of an external Review Panel. The panel members are not associated with OPPE staff members. The panel members award discretionary points for Secretarial initiatives as stated in the Funding Opportunity Announcement (FOA) currently posted.


All applicants that receive 2501 funding should familiarize themselves with the ezFedGrants system, USDA’s system for managing grants/awards. Learn more at:

Q. In terms of meeting the requirement to provide agricultural education or agriculturally related services to underserved or veteran farmers and ranchers, what types of education or services are considered acceptable activities?

Instructional and hands-on demonstration training on the farm, in classrooms, or in workshops are acceptable forms of activities. Assistance in USDA loan application processes, crop and livestock production, business and market planning, land acquisition or tenure, farmer-related legal assistance, establishment of local food systems, alternative enterprise opportunities, diversifying operations, and other value-added productions are just a few examples of acceptable forms of activities.

Q. Can projects include spending on farm infrastructure (i.e., incubators, buildings, irrigation and farm equipment, etc.) for educational purposes or used for construction costs?

Grant funds are to be used for non-construction costs, as stated in 7 USC 2279(c)(4)(H). Instructional processes, for example, how to build a hoop house, are acceptable. Recipients may have to request guidance on disposition of any type of equipment purchased and used for training purposes at the close of the grant. As expressed in the Cost Principles for Nonprofit Organizations (2 CFR 200.402-408), to be allowable, costs must meet the following general criteria:

Costs must be reasonable:

  • Recognized as ordinary and necessary.
  • Arms-length transactions.
  • Individuals concerned acted with prudence.
  • Not deviating from established practices of the organization.

Costs must be allocated to the grant, project, etc. in accordance with benefits received as follows:

  • Incurred specifically for the award.
  • Benefits both award and other work and can be reasonably distributed in proportion to benefits received.
  • Necessary to overall operation - must document direct relationship to award.
  • Learn more at the Electronic 2 Code of Federal Regulations 200 (e-CFR).

Q. Can organizations include overhead/administrative expenses in their budgets and what is the maximum indirect cost rate?

Yes. OPPE will work with all selected applicants to finalize budgets, statements of work, and project timelines prior to award issuance. The indirect cost rate may not exceed the 10 percent statutory limit for 2501 Program awards per the Farm Bill (PLAW-115pub1334).

Organizations that have a current NICRA agreement may apply their NICRA up to the statutory limit of 10 percent. In this case, the amount of indirect costs charged to the award would be based on Total Direct Cost (TDC). Your NICRA agreement must be included in your application and your budget proposal must indicate that you are applying your NICRA up to the 10 percent statutory limit based on TDC.

Organizations that do not have a NICRA agreement may claim the 10 percent de minimis indirect cost rate. The 10 percent de minimis indirect cost rate is based on Modified Total Direct Costs (MTDC). Your budget proposal must indicate that you are applying the 10 percent de minimis indirect cost rate which is based on MTDC.

2 CFR 200.1 defines MTDC which means all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $25,000 of each subaward (regardless of the period of performance of the subawards under the award). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs and the portion of each subaward in excess of $25,000. Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs, and with the approval of the cognizant agency for indirect costs.

Q. Is there a limit on the number of subawards that may be used to fund partnerships and on the number of contractors or subcontractors?

No more than three (3) subawards may be funded per project. Contractors are not subject to the same limitation. See 2 CFR 200.330 for Subrecipient (subawardee) and contractor determinations. In either case, OPPE will negotiate final statements of work, timelines, and budgets prior to award issuance to non-federal entities or recipients. At least 50 percent of grant funds must remain with the lead applicant/organization and cannot be reallocated.

Q. Can recipients from different organizations collaborate with and work together on their individual projects?

Yes, but with a qualification. Recipients may partner with subawardees from other organizations already receiving federal funding as long as grant funds are not applied or used for the same single transaction. Organizations/institutions must avoid "double dipping" as USDA cannot and will not pay twice for the same service, activity, personnel expense, etc. If applying jointly, the organization with the necessary experience must be established and will be considered the lead applicant/organization and will be held responsible for carrying out the provisions of the grant.

Q. Concerning subawards and partnerships, is it considered a subaward when recipients render payment to a partner to cover meeting/travel costs or similar expenses, for example when funding individual projects in other locations for training purposes?

Partnering means a joint effort among two or more eligible entities with the capacity to conduct projects intended and designed to accomplish the purpose of the project. Payments to partners for activities conducted under the grant, including meeting expenses, are subawards and recipients will have to limit the number of subawards to three.

Meetings and conferences generally are allowable; travel is conditionally allowable in accordance with your approved statement of work. Recipients must ensure that there is no "double-dipping” or duplication of efforts with grant funds.

Q. If grant recipients are conducting training, can they charge participants to attend training?

Participants are generally not charged to attend training. However, if charges are imposed, fees collected from participants are considered program income and must be deducted from the cost of training and must be included in your statement of work and reported on your semi-annual Federal Financial Reports (SF-425).

Q. In budgeting for the proposal, is the leasing and/or purchase of vehicles allowed?

Yes, the leasing of vehicles is allowed. Please see 2 CFR 200.465. However, the purchase of vehicles is not permitted. Purchases are limited to $5,000. Please see 2 CFR 200.439.

Q. Can an organization provide scholarships or stipends for growers while they are in training and can start-up supplies be provided to them?

Yes. A stipend can be provided to participants of training programs, conferences, or workshops to cover attendance costs as long as costs are reasonable, allowable, allocable, and necessary. Participant support costs are direct costs for items such as stipends or subsistence allowances, travel allowances, and registration fees paid to or on behalf of participants or trainees (but not employees) in connection with conferences, or training projects. 2 CFR 200.75.

Supplies provided to attendees may be covered as part of the costs of a training program or workshop, provided they are necessary for the conduct of the project. Purchased materials and supplies must be charged at their actual prices, net of applicable credits. See 2 CFR 200.453.

Scholarships are part of programs of student aid paid to students by Institutions of Higher Education. See 2 CFR 200.466.

Q. Is the purchasing of livestock allowable under the 2501 program?

Purchasing livestock is generally not allowable under the 2501 program unless used for demonstration purposes. Expenses for demonstration livestock cannot exceed $4,000.

Q. In terms of outcomes, how do organizations quantitatively measure the service(s) provided to farmers and ranchers?

Outcomes must be quantitative as it relates to the project goals and objectives. Some examples of quantitative measurement that organizations may utilize are:

  • Customer satisfaction surveys and face-to-face feedback sessions to determine the following:
    • the number of new farmers and/or ranchers your organization assisted as a result of funds made available under the program;
    • the number of underserved and/or veteran farmers or ranchers applying for USDA programs and services by program area compared to the number of USDA program applications approved for funding as a result of your activities;
    • the enhanced sustainability and retention of farming operations among underserved or veteran farmers or ranchers;
    • increase in profitability and economic stability among underserved or veteran farmers or ranchers resulting from increased access to marketing and enhanced sales opportunities for their products;
    • increase in the awareness, number, and types of USDA programs and services accessed as a result of your project.
  • Using benchmarks and tracking models to determine if farmer applications for USDA programs are increasing
  • Measuring the increase in access to land or land retention, production capacity, FSA farm number registration; utilization of marketing practices; business plan creation, etc.
  • Workshop attendance increases which can be supported by sign-in sheets
  • Repeat or returning farmers interested in seeking additional classroom or hands-on training from experts.

Unallowable use of 2501 Grant Program funds:

1. Funds may not be used for the planning, repair, rehabilitation, acquisition, or construction of a building or facility.

2. Funds may not be used to pay hourly wages as in a jobs creation program for individual farmers or ranchers.

3. Funds may not be used as small agricultural loans for individual farmers or ranchers or used to incentivize individuals to attend events, workshops, or training.

4. Funds may not be used to purchase farming supplies for individual farmers or ranchers or to enhance individual farmers’ or ranchers’ farms or production capabilities.

5. Funds may not be used to reward individual farmers or ranchers for outstanding effort or achievement in training.

6. Funds may not be used to pay for scholarships for individual farmers or ranchers to attend college courses, certificate courses, or other “for fee” based courses.

7. Funds may not be used for start-up or financing costs for businesses or for an organization’s capacity building, which is defined as the development of organizational competencies, strategies, or systems and structures in order to improve organizational efficiency and effectiveness.

8. Funds may not be used for large equipment purchases such as vehicles, semi-tractors, or refrigeration systems.


Q. Is there a page limit for appendices?

There is no page limit on the number of supporting documents that organizations may submit as appendices. However, please keep your application concise and submit only pertinent data.

Q. What types of supporting documents should be submitted as appendices?

Supporting documentation should include 501(c)(3) or other nonprofit certification from the IRS (if applicable), organizational documents indicating at least 3 years of experience assisting underserved and/or veteran farmers and ranchers, letters of support, letters of partnership with non-federal entities, resumes of key personnel, and any other supporting documents and certifications.


Q. Does USDA or each state/county have data on current populations of underserved and veteran farmers and ranchers presently living and working in each state?

Learn more about these populations at the following links:

Q. How does an applicant indicate that their project will serve individuals in rural areas or areas having persistent poverty?

The following hyperlinks contain information on rural and persistent poverty areas. Please refer to these links to see if your service territory qualifies:

Applicants can indicate this in their Project Narrative. It should be stated which areas and individuals you are servicing on the links provided. An applicant could also document other Census data on those areas: population density, geographic information, lack of support services and infrastructure, percentage data on reduced school lunch costs, state or community rankings on health, food access, unemployment data, household income data, lack of economic resources, etc.

Q. Do applicants have to secure bids and contracts from potential contractors prior to submitting their application for the 2501 grant?

No. Bids and contracts can be obtained after an organization is awarded the 2501 grant.

Q. Where can I get assistance with troubleshooting/technical difficulties in application submission?

Please visit if your organization is experiencing difficulties uploading its grant application. OPPE works closely with personnel to resolve issues as they occur. However, only can assist you with technical issues regarding its website.

Visit: and click the full application package link in the announcement. The posted Funding Opportunity Announcement explains how to submit documents and attachments.

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