The Agricultural Enterprise Fund (AEF) is an incentive program that supports Governor Lee’s priority of job creation and economic development by facilitating agricultural development in Tennessee. It is administered by the Department of Agriculture in conjunction with the Department of Economic and Community Development.
The AEF awards grants to starting or expanding agricultural, food, and forestry businesses; nonprofits, local governments, and other entities in Tennessee, or those whose project will be located in Tennessee. The program focuses on value-added and processing projects that benefit other producers or forest landowners. Farming projects such as livestock, row crop, or horticulture production expansions will not be competitive, but may be supported through the Tennessee Agricultural Enhancement Program (TAEP).
Successful grant recipients must demonstrate a strong potential for impact on local farm income, access to markets, increased capacity or agricultural innovation. Priority will be given to businesses located in at-risk counties, distressed counties, and counties adjoining at-risk or distressed counties, and the AEF selection process is competitive.
The minimum project cost has been eliminated.
Maximum payout: $499,999
The next AEF application deadline will be January 10, 2026.
Projects funded by the Agricultural Enterprise Fund must match the description of at least one of the following four categories. Many projects will potentially match the description of more than one category and applicants should indicate so on their application.
- Increase in Farm Income - This category includes projects that will increase farm income by offering farmers higher commodity prices than other markets, processing value-added products for farmers, or allowing a single farmer to add value to their own farm products.
- Increased Access to Markets - This category includes projects that will create or expand a market for Tennessee farmers or forest landowners, including reducing miles that farmers must transport their products to market or creating a new market entirely.
- Increased Capacity - This category includes projects that will expand the capacity of an existing agricultural, food, or forestry business, including their production or processing capacity or the number of employees.
- Agricultural Innovation - This category is appropriate for entrepreneurs who wish to market a new technological innovation with the potential to impact Tennessee agriculture or the forestry industry by creating efficiencies in production, reducing costs, etc.
Applicant Requirements
- Applicants must be a Tennessee entity (i.e. agriculture, food, or forestry business, farmer, local government, or nonprofit in Tennessee) or have a project based in Tennessee.
- Applicants must demonstrate that their project will increase farm income for local farmers, enhance access to agricultural markets, increase capacity of their business, or contribute to the agriculture industry through innovation.
- Applicants must be making an investment into the project. AEF funds may not be more than 25% of the project’s total budget.
- Applicants must submit project updates to measure impact of the grant on the applicant as well as the local economy, and agree to work with the Department of Agriculture to track success of the project.
- Applicants must purchase at least 25% of any agricultural inputs from Tennessee producers. This requirement may be relaxed when compliance would be impracticable – i.e. in times of drought, disease, etc.
- Applicants must utilize equipment and structures reimbursed with cost share funds for the intended purpose of the program for a minimum of five (5) continuous years from date of purchase.
For more information, please email agriculture.enterprisefund@tn.gov or call (615) 837-5160.