USDA to launch loan guarantee initiative to create more and better market opportunities, promote competition and strengthen food supply chain
WASHINGTON – As part of the administration’s efforts to address food system challenges resulting from the pandemic as well as those stretching back decades, U.S. Department of Agriculture Secretary Tom Vilsack announced that the USDA provided $ 100 million in additional funding for the American Rescue Plan Act. The financing would leverage hundreds of millions more in loans through community and private lenders to expand meat and poultry processing capacity and finance other infrastructure in the food supply chain. These investments will help provide more opportunities and fairer prices for farmers and address food supply chain bottlenecks revealed and exacerbated by the pandemic.
The department plans to release specific details about the new program and how to apply for USDA’s Build Back Better initiative, a global $ 4 billion investment plan to build community resilience. American food supply chain while promoting competition. The announcement follows the announcement made earlier this month by the Biden-Harris administration of the measures it is taking to combat concentration in the meat processing industry, adding a new pledge of 100 million dollars for loan guarantees in addition to the previously announced investment of $ 500 million to develop meat and poultry processing capacity.
“Under the leadership of President Biden and Vice President Harris, USDA is restoring the balance of power to communities and small businesses in America by investing in ways to create more, better and fairer markets for farmers and families, ”Vilsack said. . “COVID-19 has exposed vulnerabilities in our food system. As we build back better, we must create more, better, and fairer markets that increase competition and create economic opportunity across America’s agriculture and food supply chains. This is another significant step in our efforts to learn from COVID-19 to build a fair, competitive, distributed and resilient food system where more of the food dollar goes to those who grow, harvest, process. and prepare our food. . “
The COVID-19 pandemic has created extreme disruptions in the US food supply chain, exposing vulnerabilities due to consolidated processing capacity. By expanding access to capital, USDA will help increase private investment to create a more resilient, distributed and fairer food supply chain.
Through this program, USDA will use $ 100 million in American Rescue Plan Act funding to catalyze millions of additional loans available for working capital, facilities, equipment and other investments. Loan guarantees will:
start or develop entities in our food supply chain that aggregate, process, manufacture, wholesale or distribute food.
address supply chain bottlenecks.
increase the resilience of the food supply chain.
As co-chair of the Biden-Harris Administration’s Supply Chain Disruption Task Force, Secretary Vilsack and the USDA brought together industry, workers and federal partners to address disruptions at short-term supply chain resulting from the administration’s strong economic recovery. This is one of many key steps USDA will take to build a more resilient supply chain and better food system and to increase competition in agricultural markets, in accordance with President Biden’s decree on promoting competition in the US economy and its America’s Supply Order. Chains. 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.
The USDA is preparing to issue a notice soon to announce the eligibility requirements and the application window. USDA encourages lenders and other interested stakeholders to sign up for email updates to receive the latest information on the program and related events. 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.
Earlier this year, the USDA announced more than $ 150 million for existing small and very small treatment facilities to help them overcome COVID, compete in the marketplace, and get the support they need to reach more customers.