Federal-State Marketing Improvement Program

Important Update:

Please note that the Grassroots Guide has not yet been updated to reflect changes made by the 2018 Farm Bill, which was passed and signed into law in December 2018. We are in the process of updating the Guide and expect to publish an updated version in the spring of 2019. In the meantime, please use this guide for basic information about programs and important resources and links for more information, but check with USDA for any relevant program changes made by the 2018 Farm Bill. Also, check out our blog series covering highlights from the new farm bill. 

Improving marketing opportunities for farms through state-based research and innovation

Like all businesses, farms depend on good marketing to help sell their products. Investment in marketing research can help farmers identify new marketing channels, improve marketing systems, and increase the competiveness of a state’s agricultural products. For instance, marketing research can help lay the groundwork for a statewide system of food coops, local food sales to in-state hospitals and schools, or the placement of new farmers markets or food hubs.

The Federal-State Marketing Improvement Program (FSMIP) is a small competitive grants program designed to assist states with exploring new market opportunities through research and innovation. While only state agencies and institutions are eligible for grant awards, FSMIP funds can be used to conduct research projects in collaboration with non-profit organizations, community, or producer groups that solve practical marketing problems, including those facing small and medium-scale farmers.

Learn More About FSMIP!

Program Basics

FSMIP has been investing in marketing research for over 65 years and was first established in the Agricultural Marketing Act of 1946. FSMIP funds marketing research for the following agricultural sectors:

  • Livestock and livestock products
  • Food and feed crops
  • Fish and shellfish
  • Horticulture, viticulture, and apiary
  • Nutraceuticals
  • Bioenergy
  • Compost
  • Agroforestry and forest products
  • Products made from agricultural residue
  • Processed or manufactured products derived from such commodities

FSMIP projects may deal with the barriers, challenges, or opportunities manifesting at any stage of the marketing chain including direct, wholesale, and retail markets. Some typical topic areas include:

  • Determining the best methods for processing, preparing for market, packing, handling, transporting, storing, distributing, and marketing agricultural products.
  • Determining the costs of marketing agricultural products in various forms and channels.
  • Developing more efficient marketing methods and facilities to bring about more orderly marketing and reduce the price spread between producers and consumers.
  • Developing and improving standards of quality, condition, quantity, grade and packaging in order to encourage uniformity and consistency in commercial practices.
  • Eliminating artificial barriers to the movement of products in commercial channels.
  • Fostering new/expanded domestic/foreign markets and new/expanded uses of agricultural products.
  • Collecting and disseminating marketing information to anticipate and meet consumer requirements, maintain farm income, and balance production and utilization.
  • Assessing challenges and developing practices that could assist local and regional producers in marketing agricultural products that meet the mandates of the Food and Drug Administration’s Food Safety Modernization Act.
  • Creating wealth and economic opportunity in rural communities through research on issues relating to marketing in local and regional food systems and value-added agriculture.

Proposals may involve small, medium, or large-scale agricultural entities but should benefit multiple producers or agribusinesses.  Proprietary proposals that benefit one business or individual will not be considered.  Smaller-scale projects may serve as pilot projects or case studies useful as models for other states. FSMIP awards average about $50,000, and typically fund one-year projects, but longer projects of up to two years in duration are also considered.


State departments of agriculture, state agricultural experiment stations, state universities, and other appropriate state agencies (such as state departments of forestry, natural resources, or energy) may apply for funding through FSMIP. State level applicants are encouraged to partner with industry groups, academics, community-based organizations, and other stakeholders in their proposed projects. Proposals should benefit multiple producers or businesses and multi-state proposals are eligible for funding.

Requests for FSMIP funds must be matched, dollar for dollar, from a non-federal source. The match funds may consist of cash or in-kind contributions, state appropriations, or resources contributed by the FSMIP project partners, such as nonprofits or farming organizations. Examples of matching resources commonly used in FSMIP projects include cash, state-appropriated funds, student tuition, partners’ in-kind time, meeting facilities if they would otherwise have to be rented, and travel expenses associated with the project. Program income cannot be contributed as a match.

The Program in Action

Since 1999, FSMIP has provided approximately $20 million to 382 marketing improvement projects all across the country.  FSMIP awards typically average about $60,000 each, and in recent years have ranged from $25,000 to $135,000.

FSMIP grants have been used to:

  • Create wealth in the rural Eastern Arkansas area through local and regional food systems and value-added agriculture, by training producers on marketing, packaging and processing vegetables; developing an Arkansas Grown brand; identifying direct marketing barriers; and conducting a pilot project;
  • Better understand the roles and opportunities for small-scale farmer marketing cooperatives in New York, such as food hubs, in addressing growing demands for local, source-identified food products through intermediated marketing channels; and
  • Develop a method and manual to train Oregon’s entrepreneurial food producers and processors in the basics of conducting product sensory and consumer tests.

A full list of FSMIP Awarded Grants for Fiscal Years 1999-2016 can be found on the USDA Agricultural Marketing Service (AMS) site.

How to Apply and Program Resources

Organizations interested in developing a FSMIP proposal should contact their state department of agriculture or another appropriate state agency. Funds are allocated through one competitive grant cycle per year. The deadline for submitting applications is usually between January and March.

Read more about the program on the USDA’s FSMIP webpage.

Program History, Funding, and Farm Bill Changes

FSMIP was first established and permanently authorized in the Agricultural Marketing Act of 1946. As a discretionary program, the funding level for FSMIP is determined each year by Congress in the annual agricultural appropriations bill. Since 1999, FSMIP has typically received approximately $1.2 million to $1.4 million per year. The chart below shows what the program has received in recent years. Future funding cannot be projected, as funding levels will be determined one year at a time by Congress.

Federal-State Marketing Improvement Program Funding 

Fiscal Year Total Funding Available (in millions)
2013 $1.3
2014 $1.4
2015 $1.2
2016 $1.2
2017 $1.2

Authorizing Language

Section 204(b) of the Agricultural Marketing Act of 1946, to be codified at 7 U.S.C. Section 1621-1627

Last updated in October 2016.