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US invests over $4 billion to strengthen food system

11 June 2021
USDA

The USDA has earmarked more than $4 billion to shore up critical supply chains and make green investments in the US food system.

Citing lessons learned from the COVID-19 pandemic and recent supply chain disruptions, the USDA announced plans to invest more than $4 billion to strengthen critical supply chains through the Build Back Better initiative.

The new effort will strengthen the food system, create new market opportunities, tackle the climate crisis, help communities that have been left behind, and support good-paying jobs throughout the supply chain. This announcement supports the Biden Administration’s broader work on strengthening the resilience of critical supply chains as directed by Executive Order 14017 America's Supply Chains. Funding is provided by the American Rescue Plan Act and earlier pandemic assistance such as the Consolidated Appropriations Act of 2021.

Secretary Vilsack was also named co-chair of the Administration’s new Supply Chain Disruptions Task Force. The Task Force will provide a whole of government response to address near-term supply chain challenges to the economic recovery. The Task Force will convene stakeholders to diagnose problems and surface solutions—large and small, public or private—that could help alleviate bottlenecks and supply constraints related to the economy’s reopening after the Administration’s historic vaccination and economic relief efforts.

“The COVID-19 pandemic led to massive disruption for growers and food workers. It exposed a food system that was rigid, consolidated, and fragile. Meanwhile, those growing, processing and preparing our food are earning less each year in a system that rewards size over all else,” said Agriculture Secretary Tom Vilsack.

“The Build Back Better initiative will make meaningful investments to build a food system that is more resilient against shocks, delivers greater value to growers and workers, and offers consumers an affordable selection of healthy food produced and sourced locally and regionally by farmers and processors from diverse backgrounds. I am confident USDA’s investments will spur billions more in leveraged funding from the private sector and others as this initiative gains traction across the country.”

The Build Back Better Initiative will strengthen and transform critical parts of the US food system. As it makes investments through this initiative, USDA will also seek to increase transparency and competition with attention to how certain types of conduct in the livestock markets and the meat processing sector have resulted in thinly-traded markets and unfair treatment of some farmers, ranchers and small processors. Among other investments in the food system and food supply chain, Build Back Better will specifically address the shortage of small meat processing facilities across the country as well as the necessary local and regional food system infrastructure needed to support them.

Funding announcements under the Build Back Better initiative will include a mix of grants, loans, and innovative financing mechanisms for the following priorities, each of which includes mechanisms to tackle the climate crisis and help communities that have been left behind, including:

Food production

Food production relies on growers, including farmers and ranchers, workers, and critical inputs. But a diminishing share of the food dollar goes to these essential workers. USDA will invest in the current and future generation of food producers and workers throughout the food system with direct assistance, grants, training and technical assistance, and more.

Food processing

The pandemic highlighted challenges with consolidated processing capacity. It created supply bottlenecks, which led to a drop in effective plant and slaughter capacity. Small and midsize farmers often struggled to compete for processing access. USDA will make investments to support new and expanded regional processing capacity.

Food distribution and aggregation

Food aggregation and distribution relies on people working together throughout the food system and having the right infrastructure to gather, move and hold the food where and when it is needed. This system was stressed during the pandemic due to long shipping distances and lack of investment in local and regional capacity. USDA will make investments in food system infrastructure that can remain resilient, flexible and responsive.

Markets and consumers

The US spends more on health care and less on food than any other high-income nation; yet the US has higher rates of diet-related illness and a lower life expectancy than those nations. At the same time, many socially disadvantaged and small and mid-sized producers do not have equitable access to markets. USDA will support new and expanded access to markets for a diversity of growers while helping eaters access healthy foods.

USDA will continue to make announcements through the Build Back Better initiative in the months to come. This current announcement is in addition to the $1 billion announced last week to purchase healthy food for food insecure Americans and build food bank capacity, putting the total announced thus far at more than $5 billion.

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