USDA SBIR/STTR Phase II Funding for Agricultural Innovation

Program Overview

The USDA Small Business Innovation Research and Small Business Technology Transfer (SBIR/STTR) Phase II Programs provide federal research funding to help eligible small businesses advance innovative technologies addressing challenges in agriculture, food systems, natural resources, and rural communities.

Administered by USDA’s National Institute of Food and Agriculture (NIFA), these programs support scientific excellence, technological innovation, and the commercial application of federally supported research.

Phase II funding is intended for previous SBIR/STTR Phase I recipients. It provides an opportunity to build on earlier research results, advance technical development, and address the challenges that must be resolved before a technology can progress toward commercial use.

For FY 2026, USDA anticipates $19.5 million for SBIR and $5.25 million for STTR, with individual awards ranging from $600,000 to $650,000. The same funding levels are anticipated for FY 2027.

What the USDA SBIR/STTR Phase II Programs Support

The programs are designed to strengthen the role of small businesses in federally supported research and development while encouraging technologies that can ultimately contribute to agricultural productivity, economic development, and commercial innovation.

Program objectives include:

• Supporting scientific and technological innovation within small businesses
• Advancing technologies developed through earlier federally funded research
• Increasing the commercial application of research results
• Strengthening private-sector research and development capabilities
• Supporting technologies that address agricultural and rural challenges
• Encouraging research partnerships between small businesses and research institutions through STTR

For technology developers, Phase II is an important opportunity to address technical questions that remain after initial proof-of-concept work.

Understanding SBIR and STTR

Although SBIR and STTR share the objective of advancing small-business innovation, they emphasize different approaches to research and development.

Small Business Innovation Research (SBIR)

SBIR supports technological innovation led by small businesses. It is intended to strengthen private-sector research capabilities while increasing the potential for federally supported discoveries to move toward practical applications.

For agricultural technology companies, this may involve advancing a process, product, or technical system that has already demonstrated promising results during Phase I research.

Small Business Technology Transfer (STTR)

STTR places particular emphasis on formal research partnerships between small businesses and research institutions, including universities and federal laboratories.

These partnerships can help combine academic or institutional research capabilities with the development and commercialization experience of private-sector companies.

Applicants should evaluate the requirements of the applicable program before establishing their proposed research team and project structure.

USDA SBIR/STTR Phase II Research Areas

USDA NIFA is soliciting Phase II applications across ten research areas covering agricultural production, natural resources, food systems, rural development, and biobased technologies.

Forests and Related Resources

Research may address technologies and innovations relevant to forest resources, forestry systems, and related applications.

Plant Production and Protection – Biology

This area covers biological research and technologies related to plant production, protection, and agricultural productivity.

Animal Production and Protection

Projects may advance technologies addressing animal production, health, protection, or related agricultural challenges.

Management of Natural Resources

This area supports innovation associated with the management and use of natural resources.

Food Science and Nutrition

Research may address food science, food-related technologies, nutrition, and associated product or process innovation.

Rural and Community Development

This topic focuses on innovations relevant to rural communities and their economic development.

Aquaculture

Projects may address technology development associated with aquaculture systems and production.

Biofuels and Biobased Products

This research area is particularly relevant to developers of renewable fuels, biochemicals, biomaterials, and other products derived from biological resources.

Small and Mid-size Farms

Research may support innovations that address the operating and technology needs of smaller agricultural enterprises.

Plant Production and Protection – Engineering

This area covers engineering innovations related to plant production and protection.

Applicants should review the detailed USDA topic descriptions to confirm that their proposed Phase II research aligns with the appropriate research area.

Why Phase II Funding Matters for Technology Commercialization

Early-stage research can establish whether a technology has scientific or technical promise. However, initial results do not necessarily establish that the technology is ready for commercial use.

As development progresses, companies must address questions involving performance, reliability, repeatability, scale-up, manufacturing requirements, costs, and customer needs.

These challenges are particularly important in agricultural biotechnology, fermentation, biofuels, biobased products, and other process-intensive industries.

For example, a biological conversion process may perform well under controlled laboratory conditions but encounter different operating requirements when feedstock volumes increase, equipment configurations change, or continuous operation becomes necessary.

Phase II research can help developers produce stronger technical evidence and make more informed decisions about subsequent development.

Research-to-Commercialization Challenges

Moving an agricultural technology from successful early research toward a viable commercial product requires more than demonstrating that the underlying science works.

Important development questions may include:

• Can the technology consistently reproduce Phase I results?
• Which technical limitations must be addressed before further scale-up?
• What performance improvements are necessary?
• Are the required raw materials or feedstocks reliably available?
• What equipment and infrastructure will be needed?
• How will production costs change as the process develops?
• What regulatory or product qualification requirements may apply?
• Is there a defined customer need and credible market opportunity?
• What additional evidence will future investors or strategic partners require?

Addressing these questions during development can help reduce the risk of committing significant capital before the technology is sufficiently understood.

Opportunities for Biofuels and Biobased Products

The inclusion of Biofuels and Biobased Products as a USDA research area makes this funding opportunity relevant to companies developing technologies within the agricultural bioeconomy.

Depending on the proposed research and applicable topic requirements, technologies of interest to developers may involve:

• Biomass conversion processes
• Fermentation technologies
• Renewable chemicals
• Biobased materials and polymers
• Biological processing systems
• Renewable feedstock utilization
• Agricultural coproduct valorization
• Waste-to-value processes
• Process efficiency improvements

These examples illustrate potential industry relevance rather than guaranteed project eligibility. Each proposed technology must meet the requirements of the applicable USDA research topic and Phase II competition.

Eligible Applicants

The USDA SBIR/STTR Phase II opportunity identifies small businesses as eligible applicants.

Importantly, this is a Phase II competition. USDA NIFA requests applications from previous SBIR/STTR Phase I recipients rather than treating the opportunity as an unrestricted entry point for new research projects.

Businesses considering an application should confirm their Phase I eligibility, review the applicable Phase II requirements, and ensure that the proposed work builds appropriately on the earlier research effort.

Funding and Application Deadlines

USDA anticipates the following funding levels for the FY 2026 and FY 2027 Phase II competitions.

FY 2026 Funding

• SBIR: $19.5 million
• STTR: $5.25 million
• Application Deadline: November 17, 2026

FY 2027 Funding

• SBIR: $19.5 million
• STTR: $5.25 million
• Application Deadline: September 21, 2027

Individual awards are expected to range from $600,000 to $650,000. No matching funds are required.

Applicants should consult the complete funding announcement for detailed submission instructions, project requirements, and applicable award conditions.

Preparing a Strong Phase II Development Plan

For Phase II applicants, a practical development plan should connect previous research results with clearly defined technical objectives.

Project teams should be able to explain what was learned during Phase I, which uncertainties remain, and how the proposed Phase II work will address them.

Useful planning considerations include:

• Documenting Phase I technical results
• Identifying the most important remaining development risks
• Establishing measurable technical milestones
• Defining experimental and validation requirements
• Evaluating scale-up constraints
• Assessing preliminary production economics
• Understanding the target market and competitive alternatives
• Defining the pathway toward further development and commercialization

The objective should be to generate information that supports sound technical and commercial decisions, rather than simply extending research activities without a defined development purpose.

How LEC Partners Supports Agricultural Technology Development

LEC Partners works with agricultural technology companies, biotechnology developers, manufacturers, research organizations, investors, and project sponsors to evaluate emerging technologies and support practical commercialization planning.

Our network of more than 150 subject-matter experts includes experience across biofuels, fermentation, biochemicals, bioplastics, feedstocks, process development, scale-up, technical due diligence, and project implementation.

For companies advancing technologies beyond initial research, our capabilities include:

• Independent technology assessments
• Technical and commercial due diligence
• Technology readiness evaluation
• Fermentation and bioprocess assessment
• Feedstock and raw-material analysis
• Process scale-up planning
• Techno-economic assessment
• Market and competitive analysis
• Pilot and demonstration planning
• Commercialization strategy
• Project feasibility and development support

Our focus is on helping developers identify material risks, establish realistic development priorities, and prepare for the technical and commercial requirements of implementation.

Frequently Asked Questions

What are the USDA SBIR/STTR Phase II Programs?
The USDA SBIR/STTR Phase II Programs provide research funding to eligible small businesses advancing technologies developed through earlier Phase I awards, with the objective of supporting innovation and increasing the commercial application of federally supported research.

Who is eligible to apply for Phase II funding?
The opportunity is intended for eligible small businesses that previously received SBIR/STTR Phase I funding and meet the applicable USDA NIFA Phase II requirements.

How much funding is available for individual awards?
The anticipated individual award range is $600,000 to $650,000.

Is matching funding required?
No. The funding opportunity does not require matching funds.

Does the program support biofuels and biobased products?
Yes. Biofuels and Biobased Products is one of the ten research areas identified in the USDA NIFA Phase II funding opportunity.

What is the difference between SBIR and STTR?
Both programs support small-business innovation. STTR places additional emphasis on formal cooperative research partnerships between small businesses and research institutions.

When are applications due?
The FY 2026 application deadline is November 17, 2026. The FY 2027 application deadline is September 21, 2027.

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