At an event at Georgetown University on Wednesday, U.S. Secretary of Agriculture Tom Vilsack detailed the USDA’s new framework to make the food industry supply chain more resilient, level the playing field for smaller producers, make nutritious food affordable and boost underserved communities.
The announcement comes during a period of massive food inflation and supply chain bottlenecks, as the lingering effects of the pandemic and the Ukraine war continue to drive high prices and product shortages.
The framework’s $2 billion in funding is targeted at food production, processing, distribution and consumers. Highlights include up to $300 million to help transition farmers to organic production methods and up to $75 million to support urban agriculture. The administration is targeting new funding for workforce training, food safety certification and supply chain infrastructure. The framework also includes a $155 million increase in funding toward the Healthy Food Initiative, to improve access in food deserts.
The new framework continues the Biden administration’s focus on rebalancing power in the food industry. In January, President Biden detailed a $1 billion plan to support competition in the meat sector, with $375 million going toward supporting independent meat and poultry processors’ projects.
In a question and answer session, Vilsack said that the USDA’s role in increasing competition in the meat and poultry sector is to control capacity, and that it is strengthening the Packers and Stockyards Act to “balance the system on behalf of producers and processors.” The law, first passed by Congress in 1921, aims to ensure fair competition in the meat and poultry industry by preventing monopolies.
Vilsack said Biden’s investment in smaller meat plants earlier this year has increased competition because applicants were able to scale up their operations and sell across state lines. He added that over 250 companies have applied for the funding since Biden’s January announcement. Also previously announced was a $275 million investment, in partnership with lenders, to provide loans to independent meat processors.
“These loan funds will provide needed capital to address future plans these plants have to expand, improve or increase capacity,” Vilsack said in his address.
The USDA announced as part of the new framework $100 million in funding to support workforce training at processors, something Vilsack said extends from plant workers to the rest of the workforce. About $40 million will be given to training programs overseen by the National Institute of Food and Agriculture (NIFA) in risk management and sustainable agriculture research, and those focused on workforce development for meat and poultry processing.
“This is not just for the folks who are processing, it’s also the folks who inspect and are engaged in management,” Vilsack said. “What we hope to be able to do is make sure that we continue to train and encourage folks to participate in these jobs by making them aware of the industry.”
USDA will also invest to boost independent business owners, entrepreneurs, producers, and groups such as cooperatives and worker associations to help build capacity.
The aid within the new framework was not only focused on the meat industry. Part of the USDA’s investment includes $600 million in grants for non-meat and poultry food sectors to help them expand capacity and build upon existing infrastructure.
“While major strides are being made in efforts to create a more resilient food system, additional investments will be needed to expand cold storage, warehousing and other key components of the overall processing component of our food system,” Vilsack said.
In comments after his formal remarks, Vilsack said these non-meat investments are not directed at any specific industries and will be determined based on applicants.
“It is a message we’re sending to the industry that we recognize that a lot of attention has been placed on meat and poultry, and we recognize that there are other aspects of the supply chain to be addressed,” Vilsack said. “So we are going to open this up and I anticipate that we will see the same interest that we saw with meat processing opportunities, and that will help tell us where the need is the greatest. We’ll let the market tell us that.”
The funds could potentially help producers in other food segments that have faced severe supply chain issues this year, such as wheat, oils and cereal.
Other investments include $400 million to create regional food business centers in order to provide technical assistance to small and mid-size food businesses and farms, and targeted at underserved communities. The USDA said that existing support networks like those provided by the Small Business Association do not sufficiently meet the needs of the food industry.
The agriculture secretary also signaled sustainability as a key element of the framework, specifically the need to reduce carbon pollution. Over a third of the total U.S. food supply goes to waste, according to the USDA, resulting in unnecessary uses of energy and emissions of methane and carbon dioxide. Reducing food waste can help the country reach its goal to decrease greenhouse gas pollution by 50% to 52% compared to 2005 levels. Up to $90 million in funds will go toward preventing and reducing food loss and waste, including $30 million to the Community Compost and Food Waste Reduction Program. The money will also fund a feasibility study into a National Food Loss and Waste Strategy, the USDA said.
Vilsack said the administration’s actions to “smooth out” the supply chain, along with the USDA’s funds targeting specific sectors of the food industry, have the potential to improve the inflationary crisis by the end of the year.
“To the extent that you increase competition, increase capacity and increase supply, you are going to over time impact and affect prices,” Vilsack said. “Will this be done in the next month or two? No. Can It be done as we get into the tail end of 2022 into 2023? I think so. We should begin to see some moderation in that respect.”
House Agriculture Committee Chairman David Scott (D-Georgia) praised the USDA’s move in a statement. Following the USDA announcement, Scott said that his committee has advanced legislation pertaining to food supply issues, which it hopes to bring to the House floor in the coming weeks.
Meanwhile, the Republican leader of the House Agriculture Committee, Rep. Glenn Thompson of Pennsylvania, called the USDA framework “tone deaf” in a press release. In particular, he questioned the investments in organic farming and urban agriculture.
“Increasing spending on organic initiatives and rooftop gardens while placing misguided blame on corporations and agribusinesses will not increase domestic food production,” Thompson said. “If Secretary Vilsack were serious about solutions to help alleviate the emerging world food crisis, he would oppose President Biden’s progressive agenda and advocate for all farmers and ranchers, and the consumers who depend on them.”