By Jennifer Whitlock
Field Editor
The U.S. Department of Agriculture (USDA) announced it will invest another $100 million in funding from the American Rescue Plan Act to launch a loan guarantee initiative aimed at strengthening food supply chains.
“USDA is shifting the balance of power back to the communities and small businesses of America by investing in ways we can build more, better and fairer markets for farmers and families alike. COVID-19 revealed vulnerabilities in our food system. As we build back better, we must create more, better and fairer markets that enhance competition and create economic opportunity across America’s agriculture and food supply chains,” U.S. Secretary of Agriculture Tom Vilsack said in a statement. “This is another meaningful step in our efforts to act on lessons from COVID-19 to build a food system that is fair, competitive, distributed and resilient where a greater share of the food dollar goes to those growing, harvesting, processing and preparing our food.”
Through the program, the loan guarantees will help start-ups and existing businesses aggregate, process, manufacture, wholesale or distribute food, address supply chain bottlenecks and increase the resiliency of the food supply chain.
In a media briefing, Vilsack said the program reduces risk to bankers and other lenders to finance mobile processing facilities, cold storage capacity expansion and the creation of cooperatives for farmers and ranchers to brand or market their products, among others.
“These loan guarantees are important to bankers and those who provide the financing because they may not be as familiar with the risk associated, and there’s a little reluctance on the part of commercial lenders to establish and provide the credit,” he said.
More details on the program are expected to be announced soon.
USDA will host a lender training webinar on Oct. 14 for rural lenders, community development financial institutions, food sector lenders and community lenders on how they can become approved lenders for this and other USDA programs.
Through these programs, USDA hopes to improve outcomes for farmers, ranchers and consumers alike.
“Everything we do is going to provide help and assistance, and I think it’s going to create a sense of confidence in the supply chain, which hopefully over time and with the expanded processing capacity, will result in fairer returns for our producers and fairer prices at the checkout counter for our consumers,” Vilsack said.