USDA is announcing a plan that involves another $100 million in funding from the American Rescue Plan Act. The funding would be used to expand meat and poultry processing capacity and help finance other food supply chain infrastructure.
Under the plan, loan guarantees would be used the help start up or expand businesses in the supply chain that process, manufacture, or help distribute food.
USDA Secretary Tom Vilsack spoke to reporters on Tuesday about the additional aid. He said the pandemic exposed a number of weaknesses in the food supply chain. He says they have heard there is a need to assist the middle of the supply chain right now. He says there have been reports of issues with cold storage capacity and a need to retool existing plants to allow them to navigate the packaging requirements that can change from time to time. For that reason, he says the agency felt they needed to establish another way of helping and strengthening the supply chain.
Vilsack says the program would reduce the risk to bankers and to others who are providing the financing for such things as mobile processing facilities or cold storage capacity that needs to be expanded or help more producer groups establish a co-op to brand or market their product.
“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 to provide the credit. With our loan guarantee, we expect and anticipate that that risk to bankers and other financiers will come down significantly and open up credit opportunities for facilities that are pursuing expanded opportunities, " Vilsack said.
USDA plans to publish specific details on the new program and how to apply. The money for the program is part of USDA’s “Build Back Better Initiative”. It’s a comprehensive plan to invest $4 billion in the food supply and promote competition.
Click here to learn more about the program.
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