The pandemic has exposed a number of weaknesses in the food supply chain, including a lack of additional cold storage and funding issues for entities looking to expand. As part of his continued use of the $ 4 billion in funds made available as part of the US bailout, Agriculture Secretary Tom Vilsack has unveiled plans to fund $ 100 million for guarantees. to mobilize hundreds of millions more in loans through community and private lenders to expand meat and poultry processing capacity and finance other food supply chain infrastructure.
Loan guarantees do not focus only on meat, but rather will help start or develop entities in the food supply chain that aggregate, process, manufacture, wholesale or distribute food; address supply chain bottlenecks; and increase the resilience of the food supply chain. This initiative will support key investments in supply chain infrastructure to expand and expand existing capacity, as well as long-term investments in new operations.
“We felt there was a need to establish another way to help and strengthen the supply chain and make sure we were doing everything we could to connect producers with customers as effectively as possible,” says Vilsack. .
As producer groups or cooperatives brand or market a product, bankers may sometimes be unwilling to extend credit for these loans if they are not so familiar with the risks associated with the facilities. “We are convinced that these 100 million dollars could be mobilized several times”, he adds, because the money repaid can again be recirculated for new loans which will be available to release the credit in order to allow the strengthening of this medium.
“This is another significant step in our efforts to leverage the lessons of COVID-19 to build a food system that is fair, competitive, distributed and resilient where more of the food dollar goes to those who grow crops. , harvest, process and prepare our food, ”Vilsack said in a statement.
This new commitment of $ 100 million for loan guarantees builds on the previously announced $ 500 million investment to increase meat and poultry processing capacity made earlier this summer. Updating the progress of this investment, over 500 comments offered insight into how best to target these funds. Vilsack expects USDA to release its framework at the end of the year, with grants and proposals submitted in the first quarter of 2022.
The USDA also recently announced $ 55 million in grants for small and very small treatment facilities and an additional $ 100 million for overtime costs incurred during the pandemic at these facilities.
“We will continue to move forward on all of these issues because we believe it will have an effect on improving farmers’ incomes, which is important, and also ensuring that consumers get a fair price at the checkout. That’s the goal, ”says Vilsack.
USDA is hosting a Lender Training Webinar on October 14 to educate rural lenders, community development finance institutions, food sector lenders, and community lenders on how they can be approved to participate in this program. In addition, USDA is planning a forum for funding entities aligned with the announcement of eligibility and application requirements.